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2020 MarsdenLR 69
HIGH COURT MALAYA SHAH ALAM
RAGAWANG CORPORATION SDN BHD – Appellant
Versus
ONE AMERIN RESIDENCE SDN BHD (ENCLS 1 7 & 34) – Respondent
[Originating Summons No: BA-24C(ARB)-5-05/2020]
The court lacks jurisdiction to set aside preliminary rulings on jurisdiction made by arbitral tribunals, affirming arbitration's autonomous nature under applicable statutes.
Headnote:(A) Arbitration Act 2005 – Section 37 – Preliminary ruling on jurisdiction from arbitral tribunal – Court's power to set aside the ruling is limited and does not extend to jurisdictional matters – The court cannot compel an arbitrator to hear claims where jurisdiction was denied – Claims dismissed with costs to be borne by the Plaintiff. (Paras 19, 26, 31, 62)
(B) Arbitration – Process and Procedures – Parties are bound by their arbitration agreement and the arbitrator is the master of his own procedure – Court cannot intervene in the arbitration process without a breach of the law. (Paras 24, 50)
Facts of the case: The Plaintiff sought to set aside a preliminary ruling from an arbitral tribunal which denied jurisdiction over several claims, leading to court applications for various declarations and injunctions regarding subsequent arbitration notices by both parties.
Findings of Court: The court concluded it lacks power to interfere in the arbitral tribunal's decision regarding jurisdiction and affirmed the principles of limited intervention outlined in the Arbitration Act.
Issues: The main issues included whether the court had authority to set aside the ruling by the arbitral tribunal and whether it could impede arbitration procedures pending appeal.
Ratio Decidendi: The court ruled that under the applicable arbitration statutes, it cannot set aside preliminary jurisdictional rulings nor compel arbitration under those circumstances, supporting a minimalist judicial approach to arbitration.
Result: All applications dismissed with costs to be borne by the Plaintiff.
Wong Kian Kheong J:
A. Background
[1] By way of a letter of award dated 8 December 2012 (LA) from Messrs PI Architect (Architect) to the plaintiff company (Plaintiff), the defendant company (Defendant) had appointed the Plaintiff for certain construction works (Works).
[2] According to the LA, among others:-
(1) the LA was sent by the Architect on behalf of the Defendant; and
(2) the "Agreement and Conditions of PAM Contract 2006 (Without Quantities)" (PAM Contract 2006) shall apply. The PAM Contract 2006 contains an arbitration agreement.
[3] The Defendant's solicitors sent a letter dated 14 September 2018 to the Plaintiff's solicitors (1st Arbitration Notice) which gave notice of arbitration regarding the Defendant's claim from the Plaintiff for RM14,934,000.00 as liquidated damages due to the Plaintiff's delay in completing the Works (Defendant's Claim).
[4] Pursuant to the PAM Contract 2006, by way of a letter dated 9 November 2018, the President of "Pertubuhan Arkitek Malaysia" (PAM) had appointed Ir. Chong Pick Eng (Ir. Chong) to be the sole arbitrator for the Defendant's Claim (Arbitral Tribunal).
[5] In the arbitral proceedings before the Arbitral Tribunal (1st Arbitration), the Plaintiff filed a defence and counterclaim dated 30 March 2019 whereby the Plaintiff counterclaimed from the Defendant as follows, among others:
(1) a total sum of RM7,600,175.19 for the balance of sums certified by the Architect's Progress Certificate Nos. 32 and 33 (Plaintiff's Certified Works Claim);
(2) an amount of RM6,057,532.32 for Works completed by the Plaintiff but had not been certified by the Architect (Plaintiff's Uncertified Works Claim);
(3) a sum of RM1,822,110.51 as loss and expense incurred by the Plaintiff during the periods of time when the Plaintiff had made five applications for extension of time to complete the Works [Plaintiff's Loss (EOT's)];
(4) release of retention funds totaling RM4,452,000.00 (Plaintiff's Claim for Retention Funds); and
(5) a refund of RM50,000.00 regarding advertisement charges contributed by the Plaintiff at the Defendant's request (Plaintiff's Claim for Advertisement Charges).
[6] The Plaintiff's solicitors sent a letter dated 29 July 2019 to the Defendant's solicitors (2nd Arbitration Notice) which gave notice that the Plaintiff intended to arbitrate the following claims by the Plaintiff against the Defendant:
(1) Plaintiff's Certified Works Claim;
(2) Plaintiff's Uncertified Works Claim;
(3) Plaintiff's Loss (EOT's); and
(4) Plaintiff's Claim for Advertisement Charges.
[7] In the 1st Arbitration, by way of a letter dated 18 October 2019, the Defendant objected to the jurisdiction of the Arbitral Tribunal to decide on the following counterclaims of the Plaintiff (Defendant's Jurisdictional Challenge):
(1) Plaintiff's Uncertified Works Claim;
(2) Plaintiff's Loss (EOT's);
(3) Plaintiff's Claim for Retention Funds; and
(4) Plaintiff's Claim for Advertisement Charges.
[8] After considering submission filed by the Plaintiff and Defendant in respect of the Defendant's Jurisdictional Challenge, the Arbitral Tribunal issued the following "Amended Interim Award" dated 28 February 2020 [Preliminary Ruling (Jurisdiction)]:
(1) the Arbitral Tribunal had no jurisdiction to decide the Plaintiff's Certified Works Claim, Plaintiff's Uncertified Works Claim, Plaintiff's Claim for Retention Funds and Plaintiff's Claim for Advertisement Charges; and
(2) the Arbitral Tribunal had jurisdiction to decide Plaintiff's Loss (EOT's).
[9] Following the Preliminary Ruling (Jurisdiction), among others, the parties amended their pleadings (Amended Pleadings) and hearing dates of the 1st Arbitration had been fixed [Hearing Dates (1st Arbitration)].
[10] By way of a letter dated 17 March 2020, the Plaintiff's solicitors served a notice of arbitration on the Defendant's solicitors regarding the Plaintiff's Claim for Retention Funds (3rd Arbitration Notice).
B. Legal Proceedings
[11] In this originating summons in court enclosure no. 1 (Encl 1), the
