The court ruled that arbitral awards can only be set aside under exceptional circumstances, emphasizing minimal judicial intervention.

[1] The present appeal (Civil Appeal No: 02(f)-7-02-2018(W)) by the appellants, Jan De Nul (Malaysia) Sdn Bhd (JDN) and Jan De Nul Group (Sofidra SA) (Sofidra) is against the decision of the Court of Appeal dated 24 October 2017 dismissing their appeal relating to their application to set aside an arbitral award pursuant to s 37 of the Arbitration Act 2005 ( AA 2005).

[2] There is another related appeal ie Civil Appeal No: 2(f)-8-02-2018(W) where the appellants are Tan Sri Dato' Sri Vincent Tan Chee Yioun (Vincent Tan) and Central Malaysian Properties Sdn Bhd (CMP).

[3] Both the appeals were heard together, but we will prepare separate judgment for each of them. The present judgment is only in respect of Civil Appeal No: 02(f)-7-02-2018(W) in relation to the setting-aside application under s 37 of the AA 2005 by JDN and Sofidra.

The Parties

[4] JDN, at all material time, was a private company limited by share, incorporated in Malaysia; and Sofidra, was the ultimate holding company of JDN, incorporated in Luxembourg.

[5] CMP, at all material time, was a private company limited by share, incorporated in Malaysia; and Vincent Tan, was a substantial shareholder having a controlling stake in CMP.

Background Facts

[6] CMP was the developer of a project for reclamation of land comprising a plot of land measuring 38.11 hectares, along about a 2km stretch of existing shoreline bordering Jalan Abu Bakar and Jalan Skudai in Johor Bahru (the Project).

[7] CMP by a letter of award, awarded the Project to JDN for its construction. Sofidra was the guarantor guaranteeing the due performance by JDN of its obligations. The relevant contract was executed by the parties on 23 March 2010. It was based on the Construction Industry Development Board (CIDB) Standard Form of Contract for Building Works - 2000 Edition.

[8] Works could not start as planned due to CMP's delay in meeting its initial financial and payment security obligation. Works only started on 8 October 2010 after Vincent Tan executed a guarantee agreement in his personal capacity, guaranteeing the due and functual performance by CMP of its obligations under the contract.

[9] By the end of October 2010, CMP was again in default of payment under the contract for progress claim certificates No 5 and No 6.

[10] Unfortunately, something disastrous happened at the site on 12 November 2010 where much of the reclaimed platform gave way and moved southwards resulting among other, in the loss of one life (the RFI disaster).

[11] On 16 November 2010, JDN issued a notice notifying CMP that it had defaulted in its payment progress. CMP failed to remedy the default. On 2 December 2010, JDN terminated the contract.

[12] On 12 August 2011, JDN and Sofidra proceeded to refer the dispute to arbitration. An arbitral tribunal was constituted on 31 January 2012 (the Tribunal) and the parties proceeded with the arbitral proceedings. CMP and Vincent Tan filed their counterclaim against JDN in the arbitral proceedings.

[13] On 3 September 2015, after hearing the parties, the Tribunal delivered an award (the Award), and held, inter alia, that:

(i) JDN validly terminated the contract;

(ii) JDN was responsible for the RFI disaster;

(iii) JDN and Sofidra were ordered jointly and severally to pay CMP the sum of RM2,789,383.57 in respect of CMP's counterclaim with 5% i