The Arbitral Tribunal's jurisdiction can be challenged in the Enforcement Court, and allegations of fraud affecting the arbitration agreement must be independently assessed by the court.

JUDGMENT

Lee Swee Seng JCA:

[1] The plaintiffs in the High Court below had applied for registration of a judgment of a UK High Court under our Reciprocal Enforcement of Judgment Act 1958 ("REJA"). It is generally understood that, in such an application, the defendant against whom the UK judgment had been obtained cannot raise defence on the substantive merits of the plaintiffs' claim.

[2] However, the defendant argued that this particular case is different as the UK judgment had emanated from an Arbitral Award, supposedly with its seat in London, and that, under our Arbitration Act 2005 (" AA 2005"), any recognition and enforcement of the Arbitral Award in Malaysia may be objected to under s 38 2005 on the grounds allowed under s 39 2005, often referred to as the passive remedy.

[3] The objection in this case is that there was no arbitration agreement at all, as the alleged arbitration agreement was contained in two Invoices which the defendant argued before the Arbitral Tribunal to have been issued by the 2nd plaintiff fraudulently. Moreover, the relevant arbitration agreement is to be found in a set-off agreement between the parties, wherein the seat of arbitration is not in London under the London International Maritime Arbitration Association ("LIMAA") Rules, but in Kuala Lumpur under the KLRCA Arbitration Rules.

[4] The defendant contended that, as the challenge goes towards the very jurisdiction of the Arbitral Tribunal, that challenge may be raised even at the Enforcement Court at Kuala Lumpur without an application being made to set aside the Arbitral Award at the Court where the seat of the Arbitration is said to be, in London.

[5] The defendant further contended that its failure to oppose the recognition and enforcement of the Arbitral Award in the UK Court does not bar them from objecting to the recognition and enforcement of the Award at Kuala Lumpur. The defendant's stand is that the plaintiffs cannot deprive it of the passive remedy available under s 38 AA 2005, even though the plaintiffs had chosen not to have the Award recognised and enforced under the 2005, but instead, under what the plaintiffs perceived to be a more advantageous mode of enforcement under the REJA, where the Enforcement Court would ordinarily not be allowed to go behind the foreign judgment in the defendant's attempt to set aside the registration of the foreign judgment.

At The High Court

[6] The plaintiffs obtained an ex-parte order on 22 March 2021 for the foreign judgment to be registered in the High Court of Malaya. The defendant duly applied to the High Court on 27 April 2021, in encl 17, for the registration to be set aside under ss 5(1)(a)(i), 5(1)(a)(ii), 5(1)(a)(iii), 5(1)(a)(iv), 5(1)(a)(v), and 5(3)(b) of the REJA ("the Setting Aside REJA Application").

[7] The 1st and 2nd plaintiffs are ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd, respectively, and shall be referred to collectively as the Judgment Creditors ("JCs") or sometime as the 1st JC or the 2nd JC where the context requires, and the defendant, Tumpuan Megah Development Sdn Bhd, as the Judgment Debtor ("JD").

[8] Pending the hearing of the application to set aside the ex-parte order, the defendant applied, in encl 24, on 3 June 2021, under O 67 r 9(2) and/or O 92 r 4 of the Rules of 2012 ("ROC") for the following orders:

(a) that the issues between the JCs and the JD be tried in any manner in which an action may be ordered to be tried under O 67 r 9(2) of the ROC, where oral and documentary evidence may be adduced as follows:

(i) whether there was a contract between the parties which incorporates the OW Bunker Group Terms and Conditions (OWB Terms) and the arbitration agreement contained therein;

(ii) whether the 2nd JC was engaging in a money lending transaction with a third party, Straits Energy Ltd, that was being disguised as a purchase of marine bunker fuels by the 2nd JC from Straits Energy Ltd for delivery to the JD;

(iii) whether there was an actual sale