Mohd Arief Emran Arifin J:

GROUNDS OF JUDGMENT

(APPLICATION TO SET ASIDE AWARD OF ARBITRATOR)

MADE ON 2-10-2024

A. Introduction

[1] The Plaintiff, a firm of solicitors, wishes to set aside the Award made by the learned Arbitrator on 2-10-2024.

[2] The dispute concerns the professional insurance indemnity policies coverage of the Plaintiff that was subscribed for the period from 2018 to 2022 with the Defendant.

[3] The Plaintiff claims that substantial sums in the stakeholder account of the firm was wrongly utilized by employees of the firm and should be subject to the insurance policy coverage. A claim was submitted to the Defendant for the sums that were wrongly siphoned out from the stakeholders’ account by the said employees. The Defendant denied coverage of the full sums.

[4] The Plaintiff, dissatisfied with the said decision, has filed a claim by way of arbitration before Nahendran Navaratnam. After hearing the witnesses and considering the submissions by counsels for the litigants, a written Award was delivered on 2-10-2024.

[5] Salient points of the decision of the learned Arbitrator were as follows: Tribunal’s Finding on One Claim Decision.

[6] Essentially, after considering the terms of the policies and the evidence put forth by the litigants, the Arbitrator agreed that the interpretation adopted by the Defendant is correct and decided not to allow the claims prayed by the Plaintiff. The limit imposed by the Defendant was found to be correctly applied and limited the Plaintiff’s claim under the terms of the policy limited to the sum of RM 350,000.00.

B. Applicable Law on Setting Aside Arbitration Award under section 37 of the Arbitration Act or non-recognition of Award under Section 39 of the Arbitration Act

[6] I reproduce sections 3739Arbitration Act

Section 37Arbitration Act

(1)An award may be set aside by the High Court only if-(a) The party making the application provides proof that-

(i)a party to the arbitration agreement was under any incapacity;

(ii)the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of Malaysia;

(iii)the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present that party’s case;

(iv)the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;

(v)subject to subsection (3), the award contains decisions on matters beyond the scope of the submission to arbitration; or

(vi)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Act; or

(2)The High Court finds that-

(i)the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

(ii)the award is in conflict with the public policy of Malaysia.

(3)Without limiting the generality of subparagraph (1)(b)(ii), an award is in conflict with the public policy of Malaysia where-

(a)the making of the award was induced or affected by fraud or corruption; or

(b)a breach of the rules of natural justice occurred-

(i)during the arbitral proceedings; or

(ii)in connection with the making of the award.

(4)Where the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside.

(5)An application for setting aside may not be made after the expiry of ninety days from the date on which the party making the application had received the award or, if a request has been made under section 35

(6)Subsection (4) does not apply to an application for setting aside on the ground that the award was induced or affected by fraud or corruption.

(7)On an app