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2017 MarsdenLR 657

HIGH COURT MALAYA KUALA LUMPUR
NR RUBBER INDUSTRIES SDN BHD – Appellant
Versus
SRITONG RUBBER LATEX COMPANY LIMITED – Respondent
[Originating Summons No: 24NCC(ARB)-23-06-2015]



Petitioner Advocates:Tan Hui Xian,Muhammad Azraai ,Respondent Advocate: Ooi Huey Miin

The existence of a valid arbitration agreement is essential for enforcing an arbitration award; without it, the award cannot be recognized or enforced.

Headnote:(1) This judgment concerns an appeal against a decision concerning the enforcement of an arbitration award under ss 38 and 39 of the Arbitration Act 2005. The court determined the arbitration agreement's existence between parties, concluding no valid agreement existed nor proper service was executed according to requirements of the law.(2) The primary issues revolved around the validity of the arbitration agreement and jurisdiction matters. The court noted, "...the existence of an arbitration agreement within the context of the AA 2005 would determine the validity of the arbitration proceedings"(para 36).(3) The court concluded, "...I allowed the defendant's application in terms of encl 10 with costs."

Table of Content
1. the binding nature of the arbitration award relies on the existence of a valid arbitration agreement. (Para 1 , 12 , 25)
2. appeal concerns enforcement of an international arbitration award. (Para 9 , 10)
3. arguments regarding the validity of the arbitration agreement. (Para 13 , 14 , 15)
4. lack of evidence for an arbitration agreement invalidates the enforcement of the arbitration award. (Para 35 , 41 , 50)
5. court determines absence of a valid arbitration agreement impacts enforcement. (Para 36)
Khadijah Idris JC:

Introduction

[1] This is an appeal against my decision allowing the defendant's application (encl 10) which sought, amongst others, for declaratory relief and setting aside the ex parte order dated 23 July 2015 (Ex-parte Order) made under s 38 of the Arbitration Act 2005 (the AA 2005) and O 69 of the Rules of 2012 (ROC 2012).

[2] The Ex-parte Order provides, amongst others, the following order:

(a) the Arbitration Award No 2/2014 dated 29 April 2014 made by Ng Kok Tee, Freddy Lee Thin Pin and Teo Soon Huat (Arbitration Award), the Arbitrators appointed pursuant to Rule 6, Part C of the Malaysian Rubber Exchange Bye-Law of the Malaysian Rubber Exchange (MRE) Arbitration Rules, in an Arbitration between the plaintiff and the defendant, be recognised as binding and be enforced against the defendant by entry as a judgment of the High Court in terms of the Arbitration Award;

(b) judgment be entered in favour of the plaintiff against the defendant in terms of the Arbitration Award; and

(c) leave be granted to the plaintiff to issue a Notice of Order to be Served Out of Jurisdiction and to serve the Notice of Order to be Served Out of Jurisdiction together with the sealed Order stated in para 2(a) above out of jurisdiction upon the defendant at 169, Moo 4, Tambol Lamtub, Amphur Lamtub, 81120 Krabi, Thailand, or elsewhere as it may be found in Thailand.

Factual Background

[3] The plaintiff, NR Rubber Industries Sdn Bhd is a private company incorporated under the Companies Act 1965. It carries on the business of buying and selling latex and rubber products on long term contract on the spot.

[4] The defendant, Sritong Rubber Latex Company Limited is a company incorporated in and operating out of the Kingdom of Thailand and is in the business of latex processing. The defendant does not have any representative offices or businesses in Malaysia.

[5] The plaintiff and the defendant entered into various sale and purchase contracts for NR Concentrated Latex 69% DRC (HA). The seven contracts which were considered by the Arbitral Tribunal are:

Copies of the above contracts are collectively marked exh "P-1" in the plaintiff's affidavit encl 2 in support of the Originating Summons. For ease of reference each of the contract will be referred to as "Purchase Contract" individually and "Purchase Contracts" collectively.

[6] The Purchase Contracts are a one-page document setting out the items pertinent to the contract. The items are description of goods, quantity, quality, price, packing, term of payment, delivery and destination. For ease of reference, a Purchase Contract is reproduced below:

PURCHASE CONTRACT

DATE : 05 MAY, 2012

SELLER NR RUBBER INDUSTRIES SDN. BHD.

NO. 24, JALAN KEMPAS 1,

TAMAN KEMPAS INDAH 2,

09000 KULIM KEDAH MALAYSIA

TEL: +604-4910653 FAX: +604-4910652

DESCRIPTION OF GOODS : NR CONCENTRATE LATEX 60% DRC HA)

QUANTITY : 1,540 METRIC TONS (WET)

QUALITY : MEET OUR SPECIFICATION

PRICE : USD 3,309.83 / MT DELIVERED

PACKING : BY TANKER

TERM OF PAYMENT : CASH AGAINST DELIVERY

DELIVERY : START FROM MAY 2012

DESTINATION : UP TO SELANGOR, MALAYSIA

REMARK : A. QUANTITY ALLOWANCE +/- 1%

B. DIFFERENCE IN WEIGHT : 50 KG OR LESS FOLLOW THE SELLER'S WEIGHT. 50-100 KG USE AVERAGE OF BUYER'S/ SELLER'S WEIGHT : ABOVE 100 KG REFER TO THE 3RD PARTY'S WEIGHT. THE LORRY'S HEADER UNIT IS REQUIRED TO DETACH-OFF BEFORE WEIGHING.

C. CONTRACT TERMS AND CONDITIONS ARE REFERRED TO THE TRA/MRE PRESERVED NR LATEX CONTRACT.

D. PLEASE SIGN ON THIS CONTRACT AND

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