Back
2025 MarsdenLR 3836
COURT OF APPEAL PUTRAJAYA
PT WIJAYA KARYA (PERSERO) TBK & ANOR – Appellant
Versus
ZECON BERHAD & ANOR – Respondent
[Civil Appeal No: Q-02(C)(A)-1971-10-2021]
The court reaffirmed the validity of arbitrations where parties' consent and contractual obligations were established, ruling that previous agreements remain enforceable and arbitral decisions must be upheld unless substantial injustices are proven.
Headnote:(A) Arbitration Act 2005 - Section 9(1) - Setting aside of arbitration award - High Court wrongly set aside award due to alleged lack of valid arbitration agreement - The arbitrator's findings of underlying agency principles between parties held valid - It was confirmed that existing contracts were properly honored and acknowledged within the arbitration context - Emphasis placed on parties' consent to arbitration and minimal intervention - Award of RM4,617,471.70 in favor of Claimants upheld. (Paras 1, 20, 30, 43)
(B) Dispute Resolution - Validity of arbitration agreement - For an arbitration to be enforceable, all parties must consent and agree to terms - Previous contracts acknowledged alongside supplementary agreements - The necessary scope of engagement established between originating contract parties. (Paras 4, 33)
(C) Natural Justice - Allegations of unfairness during the arbitration proceedings must be substantiated - No significant evidence demonstrated that breach of rules negatively impacted case outcome - Courts emphasize upholding arbitral awards unless serious injustice can be shown. (Paras 38, 41)
(D) Judicial Authority - Courts do not possess the authority to re-evaluate factual findings or merits determined by the arbitral tribunal. (Paras 36, 40)
| Table of Content |
|---|
| 1. overview of the parties and agreements (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. claims and counterclaims in arbitration (Para 15 , 16) |
| 3. challenges to the arbitration award (Para 19 , 20) |
| 4. findings of the arbitrator (Para 21 , 22) |
| 5. court's analysis of the arbitration agreement (Para 33 , 34) |
| 6. breach of natural justice in arbitral proceedings (Para 38 , 39 , 41) |
| 7. final judgment and costs awarded (Para 43) |
[1] This appeal arises from the High Court's decision on 1 October 2021 setting aside the Final Arbitration Award dated 25 January 2021 ("the Award") which was in favour of the Appellants. The Appellants were the "Claimants" and the Respondents as "Respondents" in the International Arbitration No AIAC/ INT/ADM-610-2018C of which the seat was in Kuching Sarawak, Malaysia. The Award was delivered by a sole Arbitrator, Ms Tan Swee Im.
Brief Facts
[2] The 1st Respondent, Zecon Berhad, is a public company incorporated under the laws of Malaysia.
[3] The 2nd Respondent, Zecon Construction (Sarawak) Sdn Bhd, is incorporated under the laws of Malaysia and is a subsidiary of the 1st Respondent.
[4] The 1st Appellant, PT Wijaya Karya (Persero) TBK, is a company incorporated under the laws of Republic of Indonesia.
[5] The 2nd Appellant, Wijaya Karya Perseron Sdn Bhd is a private limited company incorporated under the laws of Malaysia.
[6] The 1st Respondent wholly owned subsidiaries, Zecon Land Sdn Bhd and Zecon Petrajaya Sdn Bhd were awarded a design and build contract for the development of Mydin-Retail Mall in Kuching ("the project").
[7] For the implementation of the project, the 1st Respondent engaged the 1st Appellant for the scope of project management services and manpower supply for the superstructure works.
[8] On 13 August 2014, the 1st Respondent and the 1st Appellant had entered into a Project Management Services Agreement Contract No MY- 1/14/W ("PMSA-1") for the provision of the services for the contract sum of RM13,830,591.00
[9] On 12 November 2014, the nominee and agent of both 1st Respondent and 1st Appellant, namely the 2nd Respondent and 2nd Appellant, entered into a Project Management Service Agreement Contract No MY-1/14/W-AMD ("PMSA-2") for the contract sum of RM11,485,397.00.
[10] Each of the two Agreements contained a dispute resolution clause stated in cl 13 respectively as follows:
"Clause 13-Dispute Resolution
All disputes between the Parties in relation to this agreement shall be principally settled amicably by the PARTIES. In cases where the PARTIES could not settle their dispute amicably, such dispute shall be taken into Arbitration for the final and binding settlement. Such arbitration shall take place in Kuala Lumpur, pursuant to KLRCA (Kuala Lumpur Regional Centre for Arbitration) rules and shall be conducted in English."
[11] On 20 June 2018, the Appellants issued Notice of Arbitration against the Respondents through their solicitors, Messrs. Arthur Lee, Lin and Co Advocates.
[12] Ms Tan Swee Im was appointed as the Sole Arbitrator for the aforesaid International Arbitration by the Director of the AIAC, and the acceptance of Ms Tan Swee Im was confirmed on 18 April 2019, and at all material times her appointment received no challenge by the parties herein.
[13] During the course of Arbitration and pursuant to Procedural Order No 1 dated 24 May 2019 and the subsequent updated Procedural Order No 1A dated 3 September 2019, the parties to the arbitration amongst others agreed that the seat of arbitration was to be amended from Kuala Lumpur to Kuching, Sarawak and the Arbitration is governed by the Arbitration Act 2005 and the AIAC Arbitration Rules 2018.
[14] In essence, the disputes between the Appellants and the Respondents arose on:
(a) The non-payment by the Respondents that eventually led to the termination/suspension of PMSA-1 and PMSA-2 of the Appellants; and
(b) The alleged non-performance issued in relation the Appellants extension of time application dated 19
