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2019 MarsdenLR 3713
HIGH COURT (KUALA LUMPUR)
KHADIJAH IDRIS, J
Koperasi Permodalan Felda Malaysia Berhad – Plaintiff
Versus
Alrawda Investment For Real Estate Development & Projects Management Co Ltd & Anor – Defendant
SUIT NO WA-22M-96-02/2019
The court underscored the importance of disclosing arbitration clauses in service applications, ruling that non-disclosure undermines jurisdiction, necessitating arbitration as per the agreements made.
Headnote:(A) Rules of Court 2012 - Order 11 - Arbitration Act 2005 - The court set aside the Ex Parte Order allowing service of the writ out of jurisdiction, citing non-disclosure of the arbitration agreement clause which deprived the court of jurisdiction in this case. The service of process was deemed invalid as there was no evidence that it complied with the law of Saudi Arabia. The dispute was to be referred to arbitration as stipulated by the governing agreements. (Paras 10, 22, 30, 34, 69)
(B) Jurisdiction - The issue of jurisdiction was central, with the court emphasizing the need for full disclosure of relevant facts in applications for service out of jurisdiction. The court ruled that an arbitration clause must be honored unless proven null or ineffective, aligning with the provisions of the Arbitration Act 2005. (Paras 22, 35)
Facts of the case:
The Plaintiff sought to sue the Defendants for breach of contractual obligations related to a financing agreement. The Defendants challenged the jurisdiction, highlighting an arbitration clause that necessitated arbitration before any court actions. (Paras 5-14)
Findings of Court:
The court found that the Plaintiff failed to disclose the arbitration clause during the application for leave to serve the writ outside the jurisdiction, thus deeming the service invalid. The matter was referred to arbitration. (Paras 30, 34, 69)
Issues: The main issues included whether the court had jurisdiction considering the non-disclosure of the arbitration clause and the validity of service of the writ. (Paras 22, 34)
Ratio Decidendi: The court determined that honoring arbitration agreements is paramount under the Arbitration Act, and the failure to disclose the arbitration clause during the ex parte application led to the setting aside of the order. The court must ensure that service conforms to local law when issuing writs outside its jurisdiction. (Paras 22, 35)
Result: Ex Parte Order set aside and the matter referred to arbitration.
| Table of Content |
|---|
| 1. ex parte order allowed (Para 1) |
| 2. defendant's requested orders (Para 2) |
| 3. parties identified (Para 4 , 5) |
| 4. details of agreements and obligations (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 5. defendant's arguments summary (Para 16 , 17) |
| 6. preliminary objection details (Para 19 , 20) |
| 7. judicial findings on agreement terms (Para 21 , 22 , 23 , 24) |
| 8. service of writ details (Para 28 , 30 , 33) |
| 9. court's jurisdiction analysis (Para 35 , 49 , 50) |
| 10. arbitration agreement effectiveness (Para 58 , 64) |
| 11. final orders made by court (Para 69) |
[1]On 29 March 2019 the Plaintiff’s ex parte application for leave (“Application for Leave”) to serve Notice of Writ To be Served Out of Jurisdiction, Writ Summons and Statement of Claim was allowed by the Deputy Registrar (“Ex Parte Order”).
[2]Vide enclosure 16 (“Setting Aside Application”) the Defendants sought for the following orders –
1.bahawa Perintah Ex-Parte Mahkamah Yang Mulia ini bertarikh 29 Mac 2019 diketepikan;
2.bahawa penyampaian Notis Writ Untuk Disampaikan Di luar Bidang Kuasa bertarikh 12 April 2019 dan penyampaian Writ Saman dan Pernyataan Tuntutan dalam tindakan ini ke atas Defendan-Defendan diketepikan;
3.satu deklarasi bahawa Notis Writ Untuk Disampaikan Di luar Bidang Kuasa bertarikh 12 April 2019 dan Writ Saman dan Pernyataan Tuntutan tidak diserahkan ke atas Defendan-Defendan;
SECARA ALTERNATIF
4.bahawa prosiding-prosiding yang difailkan di sini digantung;
5.bahawa semua pertikaian yang timbul dalam guaman di sini dirujuk kepada prosiding timbangtara mengikut kontrak-kontrak di antara pihak-pihak;
6.satu deklarasi bahawa Mahkamah Yang Mulia ini dan mana-mana Mahkamah Tinggi Malaya tidak mempunyai bidang kuasa ke atas subjek perkara tuntutan Plaintif dalam tindakan ini
[3]After considering the affidavit evidence and submission of both parties, this court granted order in terms of prayer 1, 2, 3, 5 and 6. The Plaintiff appealed. My reasons are set out below.
Parties
[4]The Plaintiff is Koperasi Permodalan Felda Malaysia Berhad is a co-operative society established in Malaysia under the Co-operative Societies Act 1993.
[5]The defendants are –
(a)Alrawda Investment For Real Estate Development & Project Management Co Ltd (“1st Defendant”) is a foreign limited liability company incorporated in the Kingdom of Saudi Arabia and having its registered address at No. 27, Beautat Business Park, Al-Shatei District, Kingdom of Saudi Arabia; and
(b)Dr. Mashhoor Ali Al-Madodi (“2nd Defendant”) is an individual and a citizen of the Kingdom of Saudi Arabia and the Chairman and chief Executive Officer of the 1st Defendant company with address at No. 27, Beautat Business Park, Al-Shatei District, P.O Box No. 11193 Kingdom of Saudi Arabia.
Plaintiff’s pleaded case
[6]The 1st Defendant and 2nd Defendant represented to the Plaintiff that the 1st Defendant is the lessee of a 4 star hotel building hotel known as Hotel Umm Al-Qura (“Hotel”) located at Makkah Gumaiza Quarter approximately 950 meters from Al Haram comprising 307 fully furnished rooms, a restaurant, private car parks and other related hotel facilities. The 1st Defendant was represented to be a real estate and hotel management company established in the Kingdom of Saudi Arabia.
[7]At the request of the 1st Defendant, the Plaintiff granted to the 1st Defendant a Commodity Murabahah facility (“Facility”) based on the shariah concept of tawarruq a sum of Saudi Riyal One Hundred Sixty Million (SR 160,000,000.00). Pursuant thereto the parties entered into a Commodity Murabahah Facility Agreement dated 28 June 2014 (“Murabahah Facility Agreement”). The Facility is for the purpose of the 1st Defendant’s working capital requirements for a tenure of nine (9) hajiri years and four and half months from 28 June 2014 to 1 August 2023 subject to terms and conditions of the Murabahah Facility Agreement.
[8]At the same time the Plaintiff and the 2nd Defendant entered into a Personal Guarantee and Indemnity Agreement dated 28 June 2014 (“Perso
