An arbitral tribunal must strictly adhere to the limits of its jurisdiction as defined by the parties' arbitration agreement and the applicable law.

[1] This is an appeal against the setting aside, by the High Court, of an international arbitral award (award) of US56.21m obtained by the appellants (hereinafter referred to as appellants). The appellants appealed but were unsuccessful at the Court of Appeal. The appellants applied and were granted leave to raise the following questions of law before this Court:

(i) Where the governing law of the contract is foreign law and the seat of arbitration (seat) is Malaysia, does the parties stipulation of Malaysia as the seat constitute an express agreement that the law governing the arbitration agreement is Malaysian law?

(ii) Whether a party to an arbitration can properly obtain an order to set aside the award on the ground that the arbitral tribunal had no jurisdiction when that party has brought a counterclaim in that arbitration seeking positive relief against a non-signatory to the arbitration agreement?

(iii) Whether a party to an arbitration can properly obtain an order to set aside the award on the ground that the arbitral tribunal had no jurisdiction when that party has brought a counterclaim in that arbitration seeking positive relief based on contracts other than the contract containing the arbitration agreement?

(iv) Whether matters which a party in an arbitration has required the tribunal to decide on, and which have been determined on the merits, fall within the scope of submission to arbitration which thereby precludes that partys subsequent challenge that the arbitral tribunal had no jurisdiction?

(v) Whether a party to an arbitration who challenges the standing of a non-signatory to the arbitration agreement to assert claims in the arbitration, has properly challenged the jurisdiction of the arbitral tribunal within the meaning of s 18(3) of the Arbitration Act 2005 , and preserved its right to seek to set aside the award on jurisdictional grounds?

(vi) Whether a party to an arbitration can properly obtain an order to set aside the award on the ground that the arbitral tribunal had no jurisdiction on matters which fell within the arbitral tribunals interpretation of the contract?

[2] The respondent is the Government of the Lao Peoples Democratic Republic (hereinafter referred to as the respondent). The 1st appellant, Thai- Lao Lignite Co Ltd (TLL), is a Thai company. The 2nd appellant, Hongsa Lignite Co Ltd (HLL), is a Laotian company. Both appellants were founded by one Siva Nganthavee (Siva), a Thai businessman, together with members of his family or companies under his control.

[3] By agreement dated 29 May 1992 (1st Mining Contract), the respondent and TLL entered into a joint venture to survey and mine lignite in a designated area measuring 20 square kilometres in North-West Laos for a term of 15 years, which term was renewable for further five-year terms. The 1st Mining Contract provided that TLL and the Agricultural Forestry and Import-Export Development Co Ltd of Laos shall incorporate a company, namely the 2nd Appellant, "to perform the target and objectives of the 1st Mining Contract". By supplementary agreement dated 21 July 1992 (2nd Mining Contract), the respondent and TLL agreed to an increase of the area of survey and mining from 20 to 60 square kilometres and to a time frame of two years to survey the "increased area". Appended to the 2nd Mining Contract was a "memorandum" between the respondent and TLL for the construction of a lignite power plant in Hongsa, Laos.

[4] About two years later, by project development agreement dated 22 July 1994 (PDA),