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2023 MarsdenLR 3046
HIGH COURT (SHAH ALAM)
WONG KIAN KHEONG, J
SQA Builders Sdn Bhd – Plaintiff
Versus
Luxor Holdings Sdn Bhd & Anor and other cases – Defendant
ORIGINATING SUMMONS NOS BA-24C(ARB)-8-08 OF 2021, BA-24C(ARB)-9-09 OF 2021, BA-24C(ARB)-10-09 OF 2021 AND BA-24C(ARB)-14-12 OF 2021
The enforceability of arbitration awards under the Arbitration Act is upheld unless substantial injustice or clear legal grounds to challenge are proven, prioritizing the authority of the arbitrator.
Headnote:(A) Arbitration Act 2005 - Sections 38(1), 39, 42(1), and 37(1) - Dispute over enforceability of arbitration awards - Applications for recognition of arbitral awards and payments of adjudicated amounts - Contracts and adjudication decisions examined under CIPAA - Court confirmed High Court findings and dismissed appeals regarding interpretation and enforceability of awards. (Paras 71, 105)
(B) Contractual Interpretation - Clarity of obligations and requirements under construction contracts - Statutory interpretation concerning the basis of taxation and award enforcement was central - Courts must exercise caution in overriding arbitrator’s decisions unless substantial injustice is proven. (Paras 82, 105)
Facts of the case:
The case revolved around disputes between parties concerning construction contracts and their respective adjudication decisions under the CIPAA, leading to applications both for the enforcement of arbitral awards and for judicial review of said awards regarding their interpretation. Disputes arose over the interpretation of applicable legislation, questions of law presented to the court, and claims for costs associated with arbitration proceedings.
Findings of Court:
The court upheld the arbitral award's enforceability, determining that statutory provisions allowed for such recognition, notwithstanding the challenges posed by one party. The court clarified that the parties maintained rights to challenge the enforceability based on certain legal grounds, leading to a dismissive ruling on multiple applications.
Issues: The core issues included the enforceability of the arbitral award, the jurisdiction of the court concerning statutory provisions within the Arbitration Act, and the rights of parties regarding taxation of arbitration costs.
Ratio Decidendi: The court determined that the Arbitration Act provided clear guidelines for recognizing and enforcing arbitration awards. It emphasized that unless there were clear grounds to challenge such awards based on law, the courts should respect the arbitral tribunal's authority and decisions. Judicial resources should not be used to revisit merits unless substantial legal issues or injustices arose.
Result: The court primarily ruled in favor of enforcing the final arbitral award, whilst dismissing objections raised by the opposing parties regarding its enforceability.
JUDGMENT
(Four originating summonses)
A. Introduction
[1]This judgment concerns the following four originating summonses (4 OS):
(1)in Amended OS no. BA-24C(Arb)-8-08/2021 (OS No. 8), SQA Builders Sdn. Bhd. (SQA) has applied for, among others, the following orders against Luxor Holdings Sdn. Bhd. (LH) and Luxor YRM Sdn. Bhd. (LY) -
(a)an order under s 38(1)Arbitration Act 2005AA) to recognize a final arbitral award dated 30.7.2021 (Award) made by an arbitrator, Dato’ Ar. Kevin Woo Thin Fook (Arbitrator), to be binding and be enforced by entry as a judgment in terms of the Award;
(b)a declaration that SQA is entitled to the following two amounts which had been adjudicated under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) as follows -
This judgment shall refer to the Adjudicated Amount (SQA-LH) and Adjudicated Amount (SQA-LY) collectively as the “2 Adjudicated Amounts”;
(i)a sum of RM1,884,254.34 [Adjudicated Amount (SQA-LH)] which had been adjudicated in an adjudication decision dated 5.9.2017 by Ms. Savithiri A/P Ganesan to be paid by LH to SQA [Adjudication Decision (SQA-LH)]; and
(ii)a sum of RM474,726.73 [Adjudicated Amount (SQA-LY)] which had been adjudicated in an adjudication decision dated 25.8.2017 by Encik Md. Lotefi Bin Abd. Latif to be paid by LY to SQA [Adjudication Decision (SQA-LY)].
(c)an order that LH shall refund the Adjudicated Amount (SQA-LH) to SQA; and
(d)an order that LY shall refund the Adjudicated Amount (SQA-LY) to SQA;
(2)OS no. BA-24C(Arb)-9-09/2021 has been filed by LH and LY against SQA (OS No. 9). OS No. 9 refers ten questions of law [10 Questions (OS No. 9)] to this court pursuant to s 42(1) AA
(3)LH and LY have also filed OS no. BA-24C(Arb)-10-09/2021 against SQA to set aside the Award under s 37(1)(a)(iv), (v), (b)(ii), (2)(b)(i) and/or (ii)AAOS No. 10); and
(4)OS no. BA-24C(Arb)-14-12/2021 has been filed by SQA against LH and LY (OS No. 14) for, among others, an order to tax the costs [Costs (Arbitration)] of the arbitral proceedings (Arbitration) pursuant to the Award.
B. Background
[2]SQA was appointed by way of two contracts (2 Contracts) to perform certain construction works (Works) in a project known as “Building Works for the Proposed Industrial/Office Development on Lot PT9922, Jalan Teknologi, Kota Damansara, PJU 5, Daerah Petaling, Selangor Darul Ehsan” (Project). The 2 Contracts are as follows:
(1)in a “Letter of Award” (LA) dated 27.11.2012, LH appointed SQA to perform the Works regarding Lot 1 in the Project (1st Contract). The value of the 1st Contract was RM28,781,205.48; and
(2)in LA dated 27.11.2012, LY appointed SQA to perform the Works on Lots 2 and 3 in the Project for a sum of RM10,718,794.52 (2nd Contract).
[3]The 2 Contracts provided for the application of the “Agreement and Conditions of PAM Contract 2006 (Without Quantities)” (PAM Contract 2006). The PAM Contract 2006 had provided for “The Conditions of Contract” (COC). There were arbitration agreements in clause 34 COC in the 2 Contracts.
[4]Disputes regarding the 2 Contracts arose between SQA on the one part and LH and LY on the other part [Disputes (2 Contracts)]. B(1). Adjudication proceedings
[5]SQA commenced the following two adjudication proceedings under CIPAA (2 Adjudication Proceedings):
(1)SQA claimed for payment for Works done in the Project under the 1st Contract which had not been paid by LH (1st Adjudication Proceedings). In the 1st Adjudication Proceedings, the Adjudication Decision (SQA-LH) was made wherein LH was adjudicated to pay the Adjudicated Amount (SQA-LH) to SQA; and
(2)in the second adjudication proceedings, SQA claimed that LY had not paid for Works performed by SQA in the Project pursuant to the 2nd Contract (2nd Adjudication Proceedings). The Adjudication Decision (SQA-LY) was delivered in the 2nd Adjudication Proceedings, namely, LY was adjudicated to pay the Adjudicated Amount (SQA-LY) to SQA.
[6]With regard to the Adjudication Decision (SQA-LH) and Adjudication Decision (SQA-LY) (coll
