JUDGMENT

Syed Agil Barakbah SCJ:

This appeal is against the order of dismissal by the High Court Judge of originating motion at the instance of the appellant to set aside the arbitrator's award dated 28 June 1986 or, alternatively, for it to be remitted for reconsideration by the same arbitrator or for consideration by another arbitrator as the parties agree.

On 24 January 1984, the appellant entered into a F.O.B. contract in writing with the respondent for the purchase of 500 metric tons of palm oil and it was agreed inter alia that any dispute arising out of and in connection with the said contract shall be submitted to arbitration. The material details of the contract as accepted by the arbitrator are as follows:

Contract reference: GEO/RBD PO M0012p/84 (Matthes & Porton Kuala Lumpur

MANDPKL/RDM 9122).

Product: Malaysia Refined. Bleached & Deodorised Palm Oil.

Quantity: 500 metric tons, bulk, 2% more or less at buyer's option to be

declared at time of vessel nomination.

Shipment: March 1984.

Price: US$1065 per metric ton, FOB Port Kelang/Pasir Gudang/

Butterworth in seller's option to be declared 30 days before

shipment month.

Weight Analysis: Shipped weight/shipped quality final.

Payment: CAD in Kuala Lumpur/Singapore or documents by-pass to third

parties on mutual agreement.

Other conditions: As per PORAM standard FOB sales contract 1 January 1984.

Differences arose between the parties and pursuant to the said provision of the contract, one Lim Lee Hock was appointed by mutual agreement as arbitrator. The respondent as claimant/seller submitted its claim by letter dated 26 September 1985 and the appellant as respondent/buyer in turn submitted its points of Defence dated 29 October 1985. The following points in dispute are noted by the arbitrator:

The claimant claims that the respondent in the string should accept the claimant's tender and documents and pay for them and that the respondent wrongly declares the claimant in default. Whereas the respondent contends that a string has never been established because

(a) there was no mutual consent of all parties, and

(b) the first leg of the string was contracted on a different contract i.e., Poram FOB Contract 1 July 1978

The respondent also contends that they have acted correctly, relying on s. 37(1) of the Sale of Goods (Malay States) Ordinance 1957 ("SGO") and clause 1 "Quantity" of the Poram FOB Contract 1 January 1984

The respondent further contends that the claimant having been in default cannot subsequently proceed to propose circle settlement on the same contract and besides, the Poram FOB Contract 1 January 1984 also requires mutual consent by all parties concerned before a circle is considered to have been established.

In his findings based on the submissions and documentary evidence submitted by the Counsel for both parties, the arbitrator made an award in favour of the claimant, i.e., the respondent in the present appeal. Subsequently on 4 March 1986, the appellant filed the originating motion stated above to the appellate and special powers division of the High Court at Kuala Lumpur to set aside the arbitrator's award or, alternatively, the remission of the award for reconsideration by the arbitrator or such other arbitrator as the parties may agree. The ground for the application was that the award was bad due to an error of law and/or fact on the face of the said award.

The learned Judge after hearing the arguments of Counsel for both parties made on the same day the following ground of decision which is sufficiently short enough for its full inclusion in this judgment:

In Open Court before Harun J on 10 September 1986

Grounds of Decision of Mr. Justice Harun Hashim

Finding: Buyer had option to reject or accept the tender.

Trading in palm oil is by telexes.

Arbitrator has held that custom of trade acceptance or rejection must be immediate.

Fact that buyer had to formally reject shows that he had to reject the tender.

Cannot now rely that he was not contractually