Denis Ong JCA:

This is an appeal from the judgment of Hj. Muhammad Kamil bin Awang J dismissing a summons in chambers application made by the defendant (the appellant) under s. 6 of the Arbitration Act 1952(Act 93) for a stay of all further proceedings in suit no: 22-108-97-III (II) commenced by the plaintiff (the respondent) in Kuching High Court II. We heard this appeal on 9 November 1998 at the conclusion of which both learned counsel were orally informed of our unanimous decision that it was dismissed with costs and that the deposit be paid to the respondent towards the account of taxed costs.

By an agreement in writing dated 18 July 1996 (the agreement) made between the appellant as employer and the respondent as contractor, the latter contracted to carry out and complete the construction of 20 units of detached factory buildings on lots 996 to 1015, Block 7, Muara Tebas Land District (the Works) located at the Demak Laut Industrial Park Kuching Sarawak for a contract sum of RM15,250,000.

The agreement was in the format of the Sarawak Public Works Department Form of Agreement. By art. 2 thereof, the PWD General Conditions of Contract for use where bills of quantities do not form part of the contract (the GCC) and the PWD Specifications of contract were, amongst others, deemed to form and to be read and construed as part of the agreement. Of these, only the Form of Agreement and the GCC were included in the appeal record. The GCC defined "Government" or "Employer" to mean Oriental Wealth (M) Sdn. Bhd; "Engineer" or "Divisional Engineer" to mean the Managing Director of Oriental Wealth (M) Sdn Bhd. or any other person duly authorised and appointed in writing by him for the purpose of the contract; and, "Director of Public Works" to mean the Managing Director of Oriental Wealth (M) Sdn. Bhd. These definitions must be taken to have been made in substitution for the definitions of the same terms contained in cl. 1 of the GCC, although not expressly deleted. In addition, cls. 29(vii), 37 and 38 of the GCC were expressly deleted.

The respondent carried out the works. Interim certificate nos. 1 to 7 were issued by the appellant's architect namely, Architect Design Practice (ADP) on diverse dates and payment made belatedly by the appellant were received by the respondent. However, despite repeated reminders, no payment was made by the appellant to the respondent under interim certificate nos. 8 and 9 issued on 9 November 1996 and 19 January 1997 respectively for an aggregate sum of RM2,754,659.27.

On 28 January 1997 the keys to six units on lots 1010 to 1015 were handed over by the respondent to the appellant who acknowledged receipt by its authorised personnel.

On 2 April 1997 the certificate of practical completion was issued and it certified that practical completion of the works was achieved on 4 February 1997.

On 4 April 1997 the keys to the remaining 14 units on lots 996 to 1009 were handed over by the respondent to ADP who acknowledged receipt.

On 2 June 1997 the respondent by its solicitors Messrs. Azman, Davidson & Co. wrote a letter of demand to the appellant for the payment of the aggregate sum overdue under interim certificate nos. 8 and 9. The letter also gave final notice that unless payment was received within 14 days legal proceedings would be commenced against the appellant.

On 17 June 1997 interim certificate no. 10 was issued by ADP for the payment of a sum of RM1,450,800.51 to the respondent.

There was no response from the appellant to the letter of demand and no payment whatever was received by the respondent under interim certificate nos. 8, 9 and 10 which altogether added up to RM4,205,459.78.

On 2 December 1997 the respondent instituted suit no: 22-108-97-III (II) in the Kuching High Court to recover the payments due under interim certificate nos. 8, 9 and 10; alternatively, for damages for breach of contract, and for interest and costs.

On 20 December 1997 the appellant by its advocates Messrs. Jo