An arbitrator's failure to consider relevant legal provisions regarding fee payment can result in an award being set aside, affirming the principle that payment for completed professional services is not contingent on client acceptance.

[1] This was a relatively short application by originating summons by an architect claiming for unpaid professional fees who had an arbitration award dismissing her claim for her total professional fees, amounting to RM311,850, damages for wrongful/premature termination, interest and costs. In a brief final award, the learned arbitrator found that her claims failed completely. See para 4.0 of the final award:-

I NOW having considered the evidence and the submissions of Counsel and for the reasons set out hereafter FIND AND Award That The Claimant's Claim Fail COMPLETELY

[2] The material facts can be stated very briefly. The plaintiff was appointed as a consultant architect by the defendant, Majlis Perbandaran Kemaman, in relation to the construction of a floating restaurant and activity centre for the defendant. By the Memorandum of Agreement for Architectural Services executed between the parties, the plaintiff was to provide professional services in the form of schematic design, design development, contract documentation, and contract administration and supervision, in phases. It was agreed that the plaintiff would bill for professional services based on a scale stipulated in the Memorandum of Agreement. See cl 11 of the Memorandum of Agreement and the Schedule of Fees appended thereto. The plaintiff's professional fees, as stated in the letter of appointment, was 11% of total construction costs on the basis of an estimated total project cost of RM6,000,000.

[3] The agreement provided that either party could terminate the agreement by giving a 30 days' notice. On the facts, the plaintiff had commenced work and, according to her, had completed the works up to the schematic design and design development phases. According to the plaintiff, the sketches and architectural drawings were handed over to the respondent.

[4] In a letter dated 10 December 2006, the defendant terminated the services of the plaintiff, whereupon the plaintiff tendered the statement of account and bills to the defendant with supporting documents, in which she claimed the sum of RM311,850 inclusive of service tax of 5% for outstanding professional fees.

[5] The defendant made an offer of RM41,250, which was rejected by the plaintiff.

[6] The dispute was then referred to arbitration, and as has been noted earlier, the award was not in her favour.

[7] According to the plaintiff, she had completed the professional services for first two phases, namely the schematic design phase and the design development case. When the services were terminated she had put in a claim for her professional fees based on the agreed scale fees. She had relied on cl 3(a), 3(b) and 11 of the Schedule of Fees in the Memorandum of Agreement. It was also argued that these provisions in the Memorandum of Agreement, in essence, mirrored the rules in the Architects (Scale of Minimum Fees) Rules 1986 and the Architects Rules 1996 .

[8] Clause 3 of the Schedule, headed "Basic Services", read as follows:-

3. Basic Services

The basic services to be rendered by the consulting architect shall be as follows:-

(a) schematic design stage

This phase comprises the following:-

(i) Taking instructions from the Government to ascertain the requirements and constraints of the works;

(ii) Preparing preliminary sketch designs to interpret the design brief;

(iii) Developing the sketch designs to a state sufficient to enable applications to be made for planning approval or approval in principle in connection with any specific bylaw;

(iv) Preparing preliminary estimates of the probable const