The court reaffirmed that arbitration agreements are valid, and disputes must be resolved through arbitration unless specifically exempted by law.

[1] This appeal was heard on the 30th day of October 2014. The appeal arose from an application made by the respondent (defendant) (encl 4) pursuant to s 10 of the Arbitration Act 2005 (the said Act) and/or pursuant to the inherent jurisdiction of the court to stay proceedings in the High court pending the matter being referred to Arbitration (at pp 115-116 of the Appeal Record vol 1). The appellant (plaintiff) opposed the application. The High court granted the said order sought (at p 35 of the Appeal Record vol 1). The plaintiff appealed to this court on 18 June 2014 (at pp 37-38 of the Appeal Record vol 1).

[2] Facts germane to this appeal:

(a) The plaintiff operates an aluminium smelting plant ("plant") in Mukah, Sarawak;

(b) By a placement slip numbered D12EE0852324 dated 24 October 2012 ("placement slip") (at pp 286-295 of the Appeal Record vol 2(1)), the defendant, as the lead takaful operator, agreed with the plaintiff, in consideration of payment of a premium of RM300,000.00 among others, to insure all critical plant and machineries including pots and furnace, parts accessories, tools, systems and installation ("machinery breakdown") and loss of profit ("loss of profit") against sudden and unforeseen damage from any cause not excluded occurring after successful completion of acceptance tests while working or at rest and during overhaul cleaning or movement in the premises for such purposes;

(c) Subsequently, the plaintiff received a document issued by the defendant entitled "The Schedule" dated 28 November 2012 ("Schedule") (at pp 298-299 of the Appeal Record vol 2(1)), in relation to the machinery breakdown and loss of profit. The Schedule also enclosed another document entitled "Machinery Breakdown Takaful Certificate" ("machinery breakdown certificate") but no similar certificate of loss of profit was received;

(d) On 27 June 2013, the State of Sarawak was affected by a statewide power outage ("power outage"). The plant was severely and adversely impacted by the Power Outage ("incident");

(e) As a direct result of the incident, the plant suffered major damage and business disruption. Consequently, the plaintiff suffered tremendous and substantial loss and damage. The plaintiff duly notified the defendant of the incident on or about 28 June 2013;

(f) Only after the incident, on or about 12 July 2013, the insurance broker, Messrs BIB Insurance Brokers Sdn Bhd ("BIB") received a document entitled "Machinery Breakdown and Loss of Profit Policy" ("policy") and purportedly dated 18 June 2013 (at pp 244-269 of the Appeal Record vol 2(1)). BIB then forwarded the policy to the plaintiff on or about 12 July 2013;

(g) In this case, the defendant asserted that the Policy was the same as the previous insurance policies ("Jerneh's Policies") (which had already expired) issued by Jerneh Insurance Berhad ("Jerneh") to the plaintiff. The defendant replaced Jerneh as the plaintiff's insurer. The defendant further alleged that BIB had given Jerneh's Policies to the defendant. BIB's "New Business Development Manager" Mr Gan Tze Keong affirmed an affidavit ("GTK's Affidavit") (at pp 232-235 of the Appeal Record vol 2(1), (PCBD, Tab 9)) denying the defendant's contention that BIB had previously sent Jerneh's "Machinery Loss of Profits" policy to the defendant;

(h) By a coverage letter dated 15 November 2013 ("coverage letter"), (at pp 388-397 of the Appeal Record vol 2(2)), the defendant had in reality and in substance disclaimed substantially its liability in respect of the plaintiff's claim for machinery breakdown and had disclaimed full liability in respect of the plaintiff's claim for loss of profit by relying on various exclusions