JUDGMENT

Wendy Ooi Su Ghee J:

Introduction

[1] This involves an application by the defendant to stay proceedings in a civil suit and to refer parties to arbitration pursuant to s 10 of the Arbitration Act 2005 ("AA 2005") (encl 5).

Background

[2] On 20 November 2023, the plaintiff as Subcontractor and defendant as Main-Contractor entered into a Supply, Procurement and Construction Agreement (Onshore) ("the said Agreement").

[3] Under the said Agreement, the plaintiff is to provide to the defendant, on a turnkey basis, all professional design and engineering services, supervision, labor, materials, construction and installation of the Systems equipment, tools, manufacturing equipment and machinery, utilities, transportation and procurement of Permits for the Systems ("Works") for the several projects sites of MYDIN Mohamed Holdings Sdn Bhd.

[4] On 17 June 2025, the plaintiff commenced an action against the defendant for breach of the said Agreement and claimed for special damages in the sum of RM5,002,586.61 which includes the sum of RM2,015,241.77 being payments of Works carried out by the plaintiff.

[5] On 8 July 2025, the defendant filed a Memorandum of Appearance (encl 4).

[6] On 18 July 2025, the defendant filed the application (encl 5) herein.

Analysis and Findings

[7] In resisting encl 5, the plaintiff raised the following issues:

(i) the said Agreement contains jurisdiction clauses explicitly submitting disputes to civil courts suggesting a preference for litigation and

(ii) the defendant's conduct from outset did not indicate an intention to arbitrate.

[8] In order to deal with the issues at hand, let us first look at s 10 of the AA 2005 reproduced below, particularly s 10(1) which governs the stay of proceedings pending an arbitration:

Arbitration agreement and substantive claim before

10. (1) 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.

[9] A reading of s 10(1) of AA 2005 thus reveals two (2) prerequisites for the operation of the said section, namely,

(i) that there is in existence an arbitration agreement between the parties; and

(ii) that no step has been taken in the court proceedings.

[10] Thus, is there an arbitration agreement between the plaintiff and defendant?

[11] A perusal of the said Agreement provides an arbitration clause, particularly under cl 16.11 which states the following:

16.11 Arbitration. Any and all disputes, differences or claims arising out of or in connection with this Onshore Agreement, including any question regarding its existence, validity, breach, termination, interpretation or performance (a "Dispute"), shall be referred to and finally resolved by arbitration administered by the Asian International Arbitration Centre ("AIAC"). The arbitral tribunal shall consist of three arbitrators. The party instituting the arbitration shall appoint one arbitrator and the other party shall appoint another arbitrator, and the third arbitrator to act as the chairman. The place and seat of arbitration proceedings pursuant to this Onshore Agreement, unless otherwise agreed between the parties, shall be in Malaysia and proceedings shall be conducted in English language. The decision of majority of arbitral tribunal shall be final and binding upon the parties. The prevailing party of any arbitration, action or legal proceeding shall be entitled to receive from the other party, in addition to any other relief that may be granted, its reasonable attorneys' fees, costs, and expenses incurred.

[12] Clearly, the abovementioned cl 16.11 is an arbitration agreement within the meaning of s 9 of the AA 2005.

[13] However, it is the contention of the plaintiff that cl 16.11 contains conflicting clauses which leads us to t