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1999 MarsdenLR 1650

HIGH COURT MALAYA, KUALA LUMPUR

NIK HASHIM J


DAEWOO CORPORATION
versus
BAUER (MALAYSIA) SDN BHD (NO 2)

ORIGINATING SUMMONS NO: R3-24-86-98

Decided On : 05-23-99

Advocates:
For the plaintiff - MK Chen; M/s Azman, Davidson & Co For the defendant - RR Sethu (Swee Im Tan with him); M/s David Chong & CoReported by Usha Thiagarajah

JUDGMENT

Nik Hashim J:

The plaintiff, Daewoo Corporation, applied by way of this Originating Summons (the 2nd OS) for the following:

(a) a declaration that Mr. John L. Lim, the Arbitrator, in the arbitration between the plaintiff and the defendant (Bauer (Malaysia) Sdn. Bhd.) does not possess the jurisdiction to adjudicate the disputes between the plaintiff and the defendant in respect of the four (4) work orders: PRP-A-005, PRP- A022, PRP-A-026 and PRP-A-037 (the 4 work orders);

(b) an order that Mr. John L. Lim and the defendant be restrained and that an injunction be granted restraining them from proceeding further with the arbitration in respect of the 4 work orders;

(c) that the defendant shall pay the plaintiff the costs of and occasioned by this application.

The grounds of this application that Mr. John L. Lim does not have jurisdiction or power to adjudicate on the dispute between the plaintiff and the defendant in relation to the above-mentioned work orders are explained in the affidavit of Ng Ho Fatt, the general manager of the plaintiff.

The plaintiff is the main contractor and the defendant is the subcontractor in respect of the 13 work orders. Disputes and differences had arisen between the parties on the 13 work orders and these were referred to arbitration under cl. 34 of PAM Conditions of Contract. The defendant called for arbitration over all the work orders in one single notice. The President of PAM had appointed Mr. John Lim as the arbitrator. It was a single appointment and covered all the 13 work orders. The plaintiff had challenged the jurisdiction of the arbitrator in respect of the 8 work orders on ground of want of an arbitration agreement and on the ground that the appointment of the arbitrator did not extend to the 8 work orders. The court on 26 December 1998 in O.S. No. R3-24-36-98 (the 1st O.S.), after noting the application of the arbitration cl. 34 to the work order PRP-A-008, gave judgment to the plaintiff and ruled that the arbitrator has no jurisdiction to arbitrate the 8 work orders. It is to be noted however, that in the 1st O.S. the plaintiff applied for and obtained a single injunction for all the 8 work orders. The application was limited to the 8 work orders and did not include the remaining 4 work orders, even although the 4 work orders had emerged in the course of hearing of the 1st O.S.

Mr. R.R. Sethu, learned counsel for the defendant, in his preliminary objection to the 2nd O.S. contends that the plaintiff is barred by res judicata or issue estoppel in the wider sense from bringing the present 2nd O.S. in respect of the 4 work orders when the plaintiff could have included these 4 work orders in the 1st O.S. on the ground that the present 4 work orders form the subject matter of the same arbitration as the 8 work orders which were the subject matter of the 1st O.S. Counsel submitted that the 2nd O.S. is an abuse of process and ought to be dismissed in limine and cited the rule in Henderson v. Henderson [1843] 3 Hare 100 in support.

In reply, Mr. M.K. Chen, learned counsel for the plaintiff submitted that the defendant cannot raise the plea as the defendant has taken another step in that:

(i) the defendant had filed unconditional appearance;

(ii) the defendant had filed a notice of counterclaim; and

(iii) the defendant had filed an affidavit on merits before filing the affidavit raising the plea of res judicata in the wider sense.

In my view, the above three matters filed by the defendant do not constitute a fresh step in the proceedings that debars the defendant from challenging the validity of the plaintiff's 2nd O.S (see Eagle Star Insurance Co. Ltd. v. Yuval Insurance Co. Ltd. [1978] Vol. 1. Part 4, 357). The defendant, by filing, did not waive its right to challenge the plaintiff's 2nd O.S. as the basis of the defendant's preliminary objection is grounded on the plaintiff's abuse of process by filing the 2nd O.S. and this abuse is founded on public policy in preventing

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