JUDGMENT

Azlan Sulaiman J:

Introduction

[1] The main issue here is, where an arbitration agreement between the parties requires as a first step for the dispute between them to be referred to a particular individual in the contract whether the omission to name or identify that individual renders the arbitration agreement from being incapable of being performed.

Salient Facts

[2] By a Letter of Award dated 14 September 2021 ("LOA") and the PWD Standard Format Design and Build Contract [PWD Form DB (Rev 1/2010)] with Addendum to the Conditions of Contract (collectively, "PWD Standard Form Contract"), the plaintiff as employer had appointed the defendant as the main contractor for a project known as "Design and Build for Two Unit of Fast Moving Consumer Goods Warehouse at Phase 3B on PT10562, Eco Perindustrian 5, Mukim Ijok, Daerah Kuala Selangor, Selangor Darul Ehsan" ("Project").

[3] According to the Statement of Claim, the defendant had completed its works on the Project on 12 September 2023 with the Certificate of Completion issued on the same date. However, the defendant had thereafter failed to remedy the defects during the defect liability period of 12 September 2023 to 11 February 2024 despite the plaintiff's multiple (44) Site Memos to it. The Plaintiff alleges that the sum of RM1,832,124.00 is due and payable to it for those rectification works.

[4] On 30 April 2025, the plaintiff filed this action against the defendant for the following relief:

"a. a declaration that the defendant is in breach of the Construction Contract;

b. general damages and/or any costs for breaches of contract to be assessed including but not limited to inspections, rectification of all defects, imperfections and/or non-compliance in the Defendant's works;

c. an Order that the defendant is to pay the plaintiff a sum of RM1,832,124.00 or any such sum so determined by the Honourable Court , being the sum due and payable from the Defendant to the Plaintiff within fourteen (14) days from the judgment herein;

d. an Order that the defendant fully indemnify the plaintiff for any loss, costs and/or damages in respect of the defects, imperfections, shrinkages and/or any other faults due to design, materials and/or workmanship at the Project;

e. general damages to be assessed;

f. exemplary damages to be assessed;

g. damages for loss of reputation to be assessed;

h. interest on all amounts ordered by this Court at the rate of 5% per annum from the date of the suit herein until full and final payment of the sums ordered.

i. costs; and

j. such further or other reliefs as this Honourable Court deems fit and proper. "

[5] On 18 May 2025, the defendant entered an appearance to this action and, without taking any further step in the proceedings, on 5 June 2025 filed an application in encl 5 ("Stay Application"), inter alia, for an order pursuant to s 10 of the Arbitration Act, 2005 to stay the proceedings in the action on the ground that there is an arbitration agreement between them requiring the disputes between them to be referred to arbitration.

[6] The Plaintiff opposes the Stay Application, principally on the contention that the arbitration agreement is inoperative and incapable of being performed.

Analysis and Decision

[7] The starting point of the analysis is s 10(1) of the Act, which provides:

"A Court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. "

[8] In paras [32] and [33] of the Judgment of the Federal Court in Press Metal Sarawak Sdn Bhd v. Etiqa Takaful Berhad; [2016] 5 MLJ 417; [2016] 9 CLJ 1; [2016] 5 AMR 635, Ramli Ali FCJ said:

"The clear effect of the present s 10(1) of the 2005 Act is to render a stay mandatory if the Court finds that all the releva