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2012 MarsdenLR 730
HIGH COURT (SHAH ALAM)
HASHIM HAMZAH, J
Embassy Courts Sdn Bhd & Anor – Plaintiff
Versus
Bauer (M) Sdn Bhd – Defendant
ORIGINATING MOTION NO 25–73–04 OF 2012
Mohd Ashri Rais (Shahruddin Haji Osman with him) (Hanif & Co) for the applicant.
Sanjay Mohanasundram (Mohd Raihan Abdul Khalip with him) (Kadir Andri & Partners) for the respondent.
Non-parties to arbitration agreements lack standing to challenge awards, and registered awards are binding unless proven null due to illegality or lack of jurisdiction.
Headnote:(A) Arbitration Act 2005 - Sections 37 and 50 - The court upheld the validity of the Second Agreement and the enforceability of the Final Award, determining that the 2nd Applicant, not part of the arbitration, lacked standing to apply for setting aside the award. (Paras 18-20, 25-26, 32-35)
(B) Non-compliance with statutory provisions - The application to set aside the award was found to be made within the stipulated time, as the Final Award was indeed binding and issued in compliance with the Arbitration Act. (Paras 37-39)
(C) High Court jurisdiction - A High Court cannot set aside another High Court's perfected judgment unless proved null and void due to lack of jurisdiction. (Paras 43-44)
Facts of the case:
The Respondent entered a First Agreement with the 1st Applicant for construction work, which led to arbitration over alleged breaches and resultant awards. The Final Award was registered as a judgment by the High Court. (Paras 1-11)
Findings of Court:
The application to set aside the award was dismissed as the Applicants failed to prove their standing and the award was properly registered. (Para 54)
Issues: The court addressed whether a non-party to the arbitration can challenge the award, compliance with statutory requirements, and jurisdiction issues over concurrent High Court judgments. (Paras 17, 33)
Ratio Decidendi: The court reiterated that non-parties to arbitration agreements cannot seek to set aside awards, emphasizing the binding nature of registered awards and reaffirming that jurisdictional disputes require proof of illegality for review. (Paras 20, 43)
Result: The application is dismissed with costs.
| Table of Content |
|---|
| 1. factual background of the case (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. status of the arbitration awards (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 3. issues raised by the applicants (Para 14 , 15 , 16) |
| 4. procedural issues in legal challenge (Para 17 , 18 , 21 , 22 , 24 , 29) |
| 5. timeliness of setting aside applications (Para 26 , 27 , 28 , 30 , 31 , 32) |
| 6. concurrent jurisdiction and setting aside (Para 33 , 34 , 35 , 36 , 39 , 40) |
| 7. ruling on frivolous and vexatious applications (Para 47 , 48 , 49 , 50) |
[1]This is the brief facts of this case. There was an agreement entered into between Bauer (Malaysia) Sdn. Bhd. (the Respondent) and Embassy Court Sdn. Bhd. (the 1st Applicant) on 6.10.2005 (hereinafter referred to as the “First Agreement”). The Respondent was appointed by the 1st Applicant to carry out piling and substructure works for the development of a 41 storey luxury condominium on a piece of land held under Lot 305, Section 63, Lorong Kuda, Off Jalan Tun Razak, Wilayah Persekutuan Kuala Lumpur.
[2]The Respondent commenced work in pursuant of the First Agreement. According to the terms of the First Agreement, the Respondent was to receive payment from the 1s t Applicant within 30 days from the date of each and every interim certificate issued by the architect.
[3]The 1st Applicant failed to make payments on various interim certificates. As a result, the Respondent issued notices of default and their intention to determine its employment under the First Agreement.
[4]On 12.9.2006, a meeting was held between the Respondent, the 1st Applicant and Magna Prima Berhad (the 2nd Applicant) in order to avoid the determination of the First Agreement. (hereinafter referred to as “the said meeting”)
[5]The said meeting ended with the parties agreeing to several terms and conditions which were supplemental to the First Agreement. The Respondent then issued a letter dated 12.9.2006 (hereinafter referred to as the “Second Agreement”) to the 1st Applicant to record in writing the terms agreed upon in the said meeting.
[6]However, the Respondent claimed that there was a constant breach on the part of the 1st Applicant in refusing to comply with the terms of the Second Agreement. The 1st Applicant failed to pay all due or overdue amounts to the Respondent. As a result, the Respondent determined its employment on 19.1.2007.
[7]The matter was then referred to an Arbitration Tribunal presided by Ir. P.E. Chong.
[8]The preliminary issue raised by the parties in the Arbitration Proceeding was regarding the existence and the validity of the Second Agreement. The Arbitrator made a finding that the Second Agreement was in fact in existence and thus enforceable. This finding is found in the Interim Award dated 14.1.2010 (hereinafter referred to as “the Interim Award).
[9]On 26.8.2010, the Interim Award was registered as the judgment of the High Court of Malaya at Kuala Lumpur in pursuant to Section 38Arbitration Act 2005
[10]The 1st Applicant’s appealed against this decision by the High Court dated 26.8.2010. It was dismissed with costs by the Court of Appeal on 8.2.2011.
[11]The Respondent filed a suit against the 1st Applicant at Kuala Lumpur High Court on the 4.3.2011 to enforce the awards which has been registered. The Respondent in that suit claims for specific performance against the 1st Applicant with regard to the Second Agreement. The case is still pending.
[12]After dealing with the issue on the Second Agreement, the parties proceeded with the arbitration to deal with other issues regarding the liability and quantum of damages. This led to the issuance of the Final Award (save as to costs) dated 3.2.2012 (hereinafter referred to as “the Final Award”).
[13]On 2.4.2012, the Final Award was registered as the Judgment of the High Court of Malaya in pursuant to section 38Arbitration Act 2005
[14]On 23.4.2012, the Applicants filed an Originating Motion (hereinafter referred to as Enclosure 1) to this Court and prayed as follows:-
1)To wholly set aside the A
