JUDGMENT

Tengku Baharudin Shah JCA:

(1) This is an appeal against the decision of the learned judicial commissioner (JC) who dismissed the appellant/plaintiffs (the plaintiff) appeal against the decision of the learned Deputy Registrar of the High Court (the DR) in striking out the substantive part of the plaintiffs claim against the respondent/defendants (the defendants) under O. 18 r. 19(b) and/or (d) of the Rules of the High Court 1980 (RHC). We heard arguments of learned counsel for the respective parties and came to a unanimous conclusion that the said decision was wrong and contrary to law. We therefore allowed the plaintiffs appeal with costs here and below and set aside the order. Consequently, we also dismissed the striking out application of the defendants.

Background

(2) The plaintiff was served with an arbitration notice dated 20 August 2004 (the AN) to the Kuala Lumpur Regional Centre for Arbitration (KLRCA) pursuant to cl. 7 of a Carbon Dioxide Procurement Contract dated 14 June 2000 (the procurement contract) for alleged breach by the plaintiff.

(3) The plaintiff who disputed the validity of the procurement contract (including the arbitration clause therein contained) and the jurisdiction of any arbitrator over the dispute between them filed a writ of summons and statement of claim on 25 August 2004 in the High Court seeking for the following prayers:

(a) A declaration that the procurement contract was null and void and that consequently cl. 7 thereof was also null and void and hence there was no agreement to arbitrate;

(b) A declaration that no arbitrator had authority to act or jurisdiction to make any award pursuant to the AN;

(c) A declaration that the KLRCA Rules had no application to the dispute between the defendants and the plaintiff;

(d) An injunction to restrain the defendants from threatening, committing, inducing, procuring breaches of or unlawfully interfering in the supply agreement dated 17 July 1997 between the plaintiff and Petronas (the supply agreement);

(e) General damages, interest and costs.

(4) The defendants entered an unconditional appearance to the writ of summons on 2 September 2004.

(5) On 9 September 2004 KLRCA wrote to the solicitors of the defendants and plaintiff notifying them that notwithstanding the AN no action would be taken until appropriate measures were taken in the High Court Civil Suit. The arbitration clause in the contract was however taken note of.

(6) The defendants filed their statement of defence on 10 September 2004 and subsequently filed summons-in-chambers (encl. 20) to strike out the whole or part of the plaintiffs claim under O. 18 r. 19(b) and/or (d) of the RHC. The DR heard and allowed the defendants application in part in that prayers (a) to (c) and prayer (e) of the plaintiffs statement of claim were struck out. The plaintiffs appeal to the judge in chambers was dismissed by the learned JC, hence the appeal to this court.

The Plaintiffs Claim

(7) The plaintiffs case is that the validity of the procurement contract must be determined first, if it is declared to be void the purported agreement to arbitrate would also be void. In that event, neither the arbitrator nor KLRCA would have any jurisdiction.

(8) The procurement contract is alleged to be null and void for want of consideration, smacked of mala fides, was a sham document, and tantamount to corrupt practice. It was contended that documentary evidence showed that the purported agreement on procurement and commission had nothing to do with the defendants nor the plaintiff. The plaintiff did not and could not engage the defendants to procure any supply agreement because at the time of the execution of the supply agreement the plaintiff was not even formed and was not in existence. The defendants were also not the procurers of the supply agreement.

(9) The plaintiff saw no justification for paying the defendants a 300% commission without consideration. The defendants had no right to impo