A non-party to arbitration proceedings may seek an injunction to preserve proprietary rights when no arbitration agreement binds them.

[1] The appeal by Jaya Sudhir Jayaram (the appellant) is directed against the order of the Court of Appeal on 24 July 2018 by which the 1st respondents appeal was allowed and the inter partes injunction order (the injunction order) against the 1st, 2nd and 3rd respondents granted by the High Court on 6 November 2017 was consequently set aside.

[2] The present action which preceded the injunction application and order was commenced by the appellant on 8 May 2017 in the Kuala Lumpur High Court against the 1st to 3rd respondents in this appeal and Dato Seri Timor Shah Rafiq, qua the 1st defendant in the said High Court, who is not a party in this appeal. The appellants claim is basically of a proprietary nature in the form of shares in the 3rd respondent. The subject matter of the claim includes the 10% shares in the 3rd respondent registered in the 2nd respondents name but subsequently transferred to the appellant.

[3] On 29 August 2017, the appellant moved an injunction application and on 6 November 2017 obtained the injunction order against the 1st to 3rd respondents in the Court of the first instance. Essentially, the said injunction application sought to restrain these respondents from proceeding and continuing with an on-going and parallel arbitration commenced by the 1st respondent against the 2nd and 3rd respondents and the KLHC Originating Summons No: WA-24NCC (ARB)-9-02-2016 (OS 9 Suit).

Leave To Appeal

[4] The leave to appeal was granted by this Court upon two questions of law on 12 September 2018 and these are:

a. whether the requirements of s 10 of the Arbitration Act 2005 must be met by a party litigant seeking an injunction to restrain the prosecution of an arbitration to which he is not a party but which would affect his proprietary rights; and

b. whether s 8 of the Arbitration Act 2005 applies to a party litigant who is not a party to an arbitration agreement and/or arbitration proceedings.

Upon hearing all learned counsel submitting on behalf of the respective parties, we adjourned for deliberation and intimated that the grounds of our decision in writing would be given later. This is our unanimous decision. It is certainly noteworthy that the 2nd and 3rd respondents in the course of their oral submissions supported the submission of learned counsel for the appellant.

The Background

[5] The salient facts central to this appeal are taken and summarised from the Statements of Claim and Defence as well as the various affidavits filed by the parties in the injunction application. To begin with, the appellants pleaded position is that the 3rd respondent is a joint venture company with the 1st and 2nd respondents as the initial shareholders each holding 20% and 80% shares respectively in the 3rd respondent.

[6] Prior to the formation of the 3rd respondent, a joint venture company known as Nautilus Perak Marine Services Sdn Bhd (NPMS) was incorporated on 24 June 2011 for the purpose of amongst others, bidding for the harbour tugs services and other port and maritime related services for a project by Vale Malaysia Minerals Sdn Bhd (the Vale Project). The 1st respondent is a wholly owned subsidiary of Dwitasik Marine Sdn Bhd (Dwitasik). Dwitasik in turn is wholly owned by Dwitasik Sdn Bhd (DSB). The 1st defendant is a director of Dwitasik. The 2nd respondent, which is beneficially owned by Captain Suresh Emmanuel Abishegam (Captain Suresh), is the shareholder of the 3rd respondent holding 700,000 ordinary shares representing 70% of the issued and paid u