Back
2012 MarsdenLR 260
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
A non-party cannot challenge an arbitration award; compliance with statutory timelines is mandatory under the Arbitration Act.
Headnote:(A) Arbitration Act 2005 - Sections 37(1)(a), 38, 50 - Dispute concerning an agreement between parties for construction works - Respondent was appointed to execute works, but Applicants failed to pay, leading to dispute - The Arbitrator ruled the Second Agreement enforceable - Application to set aside was dismissed due to lack of jurisdiction to challenge perfected judgments of a concurrent High Court. (Paras 10, 14, 33, 46)
(B) Non-party application - A non-party to arbitration cannot challenge an award as per definition of 'party' in the Arbitration Act. (Paras 17-20)
(C) Compliance and timelines - Applications to set aside awards must be within stipulated timelines as per section 37(4). (Paras 25-31)
(D) Nature of finality in arbitration - Awards are final and binding, and challenges must be made timely and properly to another jurisdiction. (Paras 42-45) (E) Striking out applications - Applications can be struck out if deemed scandalous, frivolous, or vexatious. (Paras 47-50)
Facts of the case:
The Respondent was appointed by the 1st Applicant for piling works but faced non-payment issues leading to arbitration over the validity of a Second Agreement and subsequent applications to set aside the final award.
Findings of Court:
The court affirmed that the Interim and Final Awards were properly registered and could not be set aside by a concurrent jurisdiction court; thus, the application was dismissed.
Issues: The main issues addressed included the ability of a non-party to arbitration to challenge an award, compliance with statutory timelines, and the nature of judicial authority over perfected judgments.
Ratio Decidendi: The court concluded that a non-party lacks standing to apply for setting aside an award and highlighted the jurisdictional limits of courts on enforcing arbitration decisions.
Result: The application to strike out was allowed with costs.
| Table of Content |
|---|
| 1. background and escalation of the contractual conflict (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. arbitration proceedings and awards (Para 8 , 9 , 10 , 11 , 12 , 14 , 15) |
| 3. issues concerning the applicability of the arbitration act (Para 17 , 18 , 19) |
| 4. timing of the application to set aside the award (Para 27 , 28 , 32) |
| 5. jurisdictional limitations in setting aside judgments (Para 33 , 36 , 43) |
| 6. striking out application as an abuse of process (Para 45 , 46) |
[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 Award dated 3/2/2012 under section 37
