Arbitration proceedings' preconditions, including amicable discussions, must be strictly adhered to before progressing to arbitration.

[1] This is the Plaintiffs application pursuant to ss 11 and 50 of the Arbitration Act 2005 ( ) on the basis that the Defendant has not complied with certain dispute resolution clauses in bringing arbitration proceedings against each of the Plaintiffs.

[2] The Originating Summons dated 22 May 2017(encl 1) was dismissed on 29 September 2017 after the Court had considered the written cum oral submissions of the parties. The Plaintiffs appealed. Herein set out below are the reasons for the said decision.

Brief Facts

[3] The relevant facts have been gleaned from the Plaintiffs Submission with some modifications are as follows. On 13 April 2017 the Defendant submitted 2 Requests for Arbitration to the International Chamber of Commerce International Court of arbitration (ICC) (the Arbitration Proceedings). Summarily, the Arbitration Proceedings both relate to the Defendants acquisition of 100% of the shareholding of Toshiba Transmission and Distribution Systems Asia Sdn Bhd (formerly known as TopRank Corporation Sdn Bhd) (TTDA) from the Plaintiffs.

[4] The Plaintiffs were previously shareholders of TTDA. The 1st Plaintiff held 75% of the shares in TTDA while the 2nd Plaintiff held the remaining 25% shares in TTDA.

[5] The Defendant entered into 2 separate agreements with the Plaintiffs respectively. First, the Share Sale Agreement dated 18 April 2011 with the 1st Plaintiff (the SSA) for the purchase of the 1st Plaintiffs shares in TTDA for a consideration of RM40 million (the Purchase Consideration). Second, the Shareholders Agreement dated 7 June 2011 with the 2nd Plaintiff (the SHA) to regulate and conduct their business affairs as shareholders in TTDA.

[6] The dispute between the Parties results from and is in connection with the SSA and the SHA. The underlying basis for the claims and cross claims are as follows:

[6.1] The 1st Plaintiffs claim against the Defendant is for, inter alia, the release of part of the Purchase Consideration in the sum of RM6 million (Escrow Monies), which has been deposited in an Escrow Account managed by HSBC Malaysia Berhad (HSBC). According to the Plaintiff, under the terms of the SSA, the Escrow Monies were to be released to the 1st Plaintiff on or about 30 May 2013.

[6.2] The Defendants claim against the Plaintiffs is for alleged breach of warranties and representations under the SSA and SHA respectively, on the recoverability of certain Receivables due to TTDA (the Receivables) based on TTDAs accounts as at 31 May 2010. The Defendant also alleged that the Receivables due to TTDA in the sum of RM3.3 million is irrecoverable, and is claiming for damages in the sum of RM26.8 million or alternatively the sum of RM3.3million.