JUDGMENT

Mary Lim JC:

[1] The defendant was the main contractor to the plaintiff in a project relating to "Cadangan Meroboh Bangunan 2 Tingkat Sedia ada dan Membina Semula Bangunan 6 Tingkat yang mengandungi kedai di tingkat bawah, Pejabat di tingkat mezzanine, dan hotel budget di tingkat 1, 2, 3 dan 4 di atas lot 28 & 29, 1 & 3 Jalan Petaling, Seksyen 21, Kuala Lumpur" (said project). The contract signed between the parties was based on Standard PAM Conditions of Contract.

[2] The plaintiff's claim is for the return of a sum of RM445,372.74 being monies purportedly overpaid or paid mistakenly or in error to the defendant. This sum was paid under Interim Certificates No. 12 to 15. At that time the sum involved was RM564,204.02. Upon realizing its mistake the plaintiff deducted the sum of RM118,831.28 payable under Interim Certificates No. 16 and 17 leaving the current sum outstanding and as claimed. Despite several attempts, the plaintiff was unsuccessful in reclaiming the sum. This action was then filed.

[3] The defendant filed an Unconditional Appearance. Although the memorandum of appearance and the cover letter from the defendant's solicitors' letter serving the memorandum were dated 27 June 2008, both documents were only received by the plaintiff on 2 July 2008 (encl. 6 - exh. "WKS15"). The court records show that the memorandum was in fact only entered on 1 July 2008.

[4] On 8 July 2008, vide telephone conversation the defendant's solicitors requested an extension of time to file defence from the plaintiff's solicitors. A letter dated 9 July 2008 ensued to confirm that telephone conversation (encl. 6 - exh. "WKS16"). In that letter it confirms that the plaintiff "... have kindly grant us an extension of time to 21 July 2008 to file the statement of defence".

[5] However, instead of filing the defence on 21 July 2008, the defendant filed on that same date a summons-in-chambers requesting the court to stay all proceedings in the instant case pursuant to s. 10(1) Arbitration Act 2005 (Act 646) (encl. 6). Relying on cl. 34 of the contract between the parties the defendant wants the matter referred to arbitration.

[6] The application is opposed by the plaintiff on several grounds. In view of the new s. 10(1) in Act 646, the relevant issues relate to whether the current proceedings are brought in respect of a matter which is the subject of an arbitration agreement; and whether by requesting and obtaining an extension of time to file defence, the defendant has taken "any other steps in the proceedings" within the meaning of s. 10(1) of Act 646 such as to bar this application.

[7] In order to determine this issue it is useful to set out both cl. 34 of the contract and s. 10(1) of Act 646. Clause 34 reads as follows:

34.0 Arbitration

34.1 In the event that any dispute or difference arises between the Employer, or the Architect on his behalf, and the Contractor, either during the progress or after completion or abandonment of the Works regarding:

34.1 (i) any matter or thing of whatsoever nature arising thereunder or in connection therewith, including any matter or thing left by this Contract to the discretion of the Architect; or

34.1 (ii) the withholding by the Architect ...

34.1 (iii) ...

34.1(iv) ...

34.1(v) ...

then such disputes or differences shall be referred to arbitration.

Section 10(1) of Act 646 provides that:

10(1) A court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds:

(a) that the agreement is null and void, inoperative or incapable of being performed; or

(b) that there is in fact no dispute between the parties with regard to the matters to be referred.

[8] The position under the old law relating to arbitration is insightful for determining the issues at hand. The Arbit