Mohtar Abdullah FCJ:

In the present appeal, the question posed to this court is "whether the function to be served by an entry of appearance in one statute ie, the Rules of the High Court 1980 is the same as the function to be served by the words 'steps in the proceedings' in s. 6 of the Arbitration Act."

In Sime Axa Assurance Berhad v. Interscope Versicherung Sdn Bhd, Federal Court Civil Appeal No. 02-08-2000(W) (hereinafter "Sime Axa Assurance"), a similar question was posed before a different panel of this court, viz, "whether an entry of an unconditional appearance constitutes a step in the proceedings within the meaning of s. 6 of the Arbitration Act 1952". That question was answered in the negative. Unfortunately, there is no written judgment delivered.

The factual background of the present appeal can be briefly narrated. The dispute between the appellant and the 1st respondent centred upon an Earthworks Contract dated 30 October 1996 which contained an arbitration clause as follows:

Arbitration

(a) If any dispute or differences shall arise between the client and the Earthworks Contractor, either during the progress or after completion of the works, or after the termination of the Earthworks Contractor's employment, or breach of this contract, as to:

(i) the construction of this Contract, or

(ii) any matter or thing of whatsoever nature arising under this Contract ...

then such dispute or difference shall be referred to the Regional Centre for Arbitration at Kuala Lumpur (the "Arbitrator") for a decision ...

The terms 'client' and 'Earthworks Contractor' abovementioned refer to the appellant and the 1st respondent respectively. The 1st respondent sued the appellant for a sum of RM17,459,445.69 allegedly owed by the appellant for earthworks performed under the Earthworks Contract. The appellant disputed the claim. The appellant entered an unconditional appearance in the action on 22 May 1998. Thereafter on 22 July 1998, the appellant filed an application for stay of proceedings in the High Court pursuant to s. 6 of the Arbitration Act 1952 (hereinafter "the Act"). The Act, modelled on the English Arbitration Act 1950, was enacted in 1952 as the Sarawak Arbitration Ordinance. In 1965, by the Modification of Laws (Declaration of Federal Present Laws) (Sarawak) Order 1969, which was deemed to have come into force on Malaysia Day, the Sarawak Arbitration Ordinance was declared to be federal law. Subsequently, it was modified and extended to apply throughout Malaysia by the Arbitration Ordinance (Extension) Order 1972 which came into force on 1 November 1972. The Arbitration Ordinance 1950 of the Federation of Malaya and the Arbitration Ordinance of Sabah were thereby repealed.

Section 6 of the Act provides:

6. If any party to an arbitration agreement or any person claiming through or under him commences any legal proceedings against any other party to the arbitration or any person claiming through or under him in respect of any matter agreed to be referred to arbitration, any party to the legal proceedings may, before taking any other steps in the proceedingsapply to the court to stay the proceedings, and the court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, and that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings. (emphasis added).

In the High Court, (see Trans Resources Corporation Sdn Bhd v. Sanwell Corporation & Anor[1999] 3 CLJ 215), RK Nathan J (the learned judge) allowed the appellant's (ie, the 1st defendant's) application for a stay of the court proceedings. In coming to his conclusion, the learned judge correctly analysed the four requirements to be satisfied under s. 6 of the Act before a stay could be granted, ie,:

(a) that the legal proceedings must have