ASEAN Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd (24C(ARB)7-02/2015 & 24C(ARB)-16-03/2015)

That ABF shall pay the sum of RM12,342,185.29 to WSB;

That ABF shall pay interest at the rate of 8% simple interest per annum on the sum of RM12,342,185.29 from 31 January 2003 to WSB to 1 August 2012;

Thereafter ABF shall pay interest at the rate of 5% simple interest per annum on the sum of RM12,342,185.29 from 2 August 2012 until the actual realization of the said payments;

That ABF shall bear and pay WSB's costs of this Arbitration on a party and party basis;

That ABF shall pay the costs of the Award,

That all other requests and claims of WSB and ABF are rejected. The heads of claims for which the learned Arbitrator had awarded RM12,342,185.29 are as follows: A. Value of work done and variations : RM 3,259,666.22 B. Loss of profit from omission of works: RM 90,277.39 C. Financial Charges : RM 4,631,647.37 D. Prolongation Costs : RM 4,360,594.31 TOTAL: RM12,342,185.29 8 Prayers [9] ABF, being dissatisfied with the Final Award, has applied to set aside the Award both under s 37 of the Arbitration Act 2005 ("AA 2005") as well as s 42 AA 2005 by way of 2 separate Originating Summonses filed in OS 24C(ARB)-16-03/2015 and OS 24C(ARB)-7-02/2015 respectively. Both Originating Summonses were, by consent of the parties, heard together. [10] Under the s 37 AA 2005 application, ABF has applied to set aside the Final Award on ground of public policy in that the learned Arbitrator had taken 4 years to hand down his Award. ABF also applied under s 37 AA 2005 to set aside the Final Award on ground that the learned Arbitrator's determination of the Issues No. 1 to 10 above had been made in breach of natural justice when the learned Arbitrator considered matters that were not pleaded and further that he had reached conclusions that are not supported by the facts, evidence or the law when he failed to consider the arguments put forward by ABF properly or at all. [11] Under the s 42 AA 2005 application, the following questions of law were referred to this Court for its determination as follows: 9 A. Where a construction contract includes a Provisional Sum item whether the contractor can claim an extension of time if it carries out these provisional sum works? B. Whether as a matter of law if the contract requires a party to inspect the site, can it derogate its responsibilities by relying on the alleged representations made by other party? C. Whether pursuant to the Arbitration Act 1952 ("AA 1952"), the Arbitrator is correct in law to grant the Respondent pre-award interest amounting to RM10,975,407.69? D. Whether if the AA 1952 is silent on the issue of the granting of pre-award interest, does the Arbitrator have the powers to grant pre-award interest? Questions C and D were added by means of an Amended Originating Summons dated 25 September 2005 in Enclosure 22. Principles - Application under s 37 AA 2005 [12] S 37 AA 2005 that is relevant to this application provides as follows: "37 (1) An award may be set aside by the High Court only if: ... 10

the High Court finds that:

the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

(ii) the award is in conflict with the public policy of Malaysia.

Without limiting the generality of subpara (1)(b)(ii), an award is in conflict with the public policy of Malaysia where:

the making of the award was induced or affected by fraud or corruption; or

A breach of the rules of natural justice occurred:

During the arbitral proceedings; or

(ii) In connection with the making of the award." (emphasis added) Whether a delay of 4 years in delivering the Arbitral Award is a breach of the public policy of Malaysia that justify setting aside the Award [13] It cannot be overstated that the delay of 4 years is most unfortunate and regrettable. To begin with the 27 days of hearing have 11 stretched over 3 years from 2007 to 2009. It must have been obvious to all and especially to the learned Arbitrator that any further delay in delivering the award would not be in the best interest of the parties. It must not be forgotten that one of the main reasons for promoting and preferring arbitration to litigation is speed of disposal and the parties' choice as to who should be arbitrator or who should constitute the arbitral tribunal. It is often perceived that the national court system and structure is so heavily burdened with endless cases such that the wheels of justice have come to attain the pathetic description of "grinding be it ever severely so slowly". This is of course no longer true of the Malaysian Court system where all cases filed at all levels of courts' hierarchy are now generally being disposed of within 9 months of filing. Even if it should take more than a year, one can be quite certain that such a case, no matter how complicated, would have come under the radar of the Managing Judge who is managing administratively the speedy disposal of such a case. [14] It is not unfair to say that in jurisdictions where the national courts are efficient, litigation has been faster than arbitration; not to mention less costly too! To continue to support arbitration as a preferred mode of dispute resolution, all parties and in particular the arbitrator chosen, must act timeously with a sense of urgency, such that a final award is 12 handed down within a reasonable time. Inordinate delay in delivering an award does not augur well for the arbitration regime where both speed and finality have been touted as its unassailable advantage over litigation. It does not engender confidence in the system and on the contrary, it undermines faith in the system. [15] Having said that, is it then a breach of public policy for an award to have been delivered after 4 long years after the submissions have been received? One has to distinguish between what is not in the public interest and what is public policy. That which is not in the public interest need not amount to a breach of public policy. It is certainly not in the public interest for an arbitrator to have delayed 4 years in handing down his Award. [16] There is a very real danger that with the passage of time, memory may fade and with that the impression made on one's mind by the witnesses. It must be appreciated that in an arbitration, an arbitrator is the master of facts and generally no one can set aside his finding of facts even if it be made based on otherwise insufficient evidence unless there has been a breach of natural justice in arriving at the factual findings. An arbitrator's finding of facts is generally sacrosanct and immune from any interference by a Court. It behoves the arbitrator then 13 to decide with all due diligence, appreciating that his findings of facts cannot generally be disturbed or challenged. [17] It is only natural that a party aggrieved by a long-delayed award would be only be too keen to canvass every reasonable ground to challenge the award including that the long delay is a breach of public policy and so the award ought to be set aside. However, here is a case where the parties are partly responsible for the delay in not having taken pro-active steps in constraining the Arbitrator to deliver his award earlier though all said, the ball was chiefly at the feet of the Arbitrator. Whilst appreciating that both parties could have played a contributing role in ensuring that an award is delivered on time, that does not in any way detract from the obligation and duty of the Arbitrator to hand down his award within a reasonable time after the submissions of the parties have been received by him. [18] What ABF could and should have done would be to write to the Arbitrator concerned a gentle reminder of the parties' anxious wait for the Award. Should ABF fear that such an action would be viewed disfavourably by the Arbitrator or worse still, might be incurring his wrath with the fearful result that the Award might be against it, it could easily get both WSB and itself to write a joint-letter reminding the Arbitrator most tactfully that parties would be expecting the delivery of his Award 14 soon. In most cases this should work and I do appreciate that parties having spent a considerable amount of time and money in preparing the case and calling their witnesses including expert witnesses, would prefer not to have the Arbitration start all over again should the Arbitrator be removed by the Court. S 16(1) AA 2005 provides that the parties may agree on the termination of the arbitrator's mandate if he fails to act without undue delay. S 16(2) further provides that if the other party disagree on the termination of the mandate of an arbitrator, the party so desiring may apply to the High Court to decide on such a termination and no appeal shall lie against the decision of the High Court. Further, the parties have an equal obligation in law to ensure that the Arbitration was proceeding without delay. They have an obligation to apply to the Arbitrator to prevent inordinate delay (see Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909 (HL)). [19] The national courts where the seat of arbitration is, would of course play a supportive role and no courts would condone such a protracted delay. Indeed if delay is fully attributed to the arbitrator then the said arbitrator should not only be mulcted with costs but should also refund the parties all fees paid to him, in the event that the Court should terminate his mandate as an arbitrator. 15 [20] Here was a case where ABF was content to wait as until an Award is given, and here in favour of WSB, it would not need to pay any monies out and indeed the amount not paid out, could be reinvested in other projects. Having decided to wait, willingly if not reluctantly, both parties have lost their right to complain on account of delay with respect to the delivery of the Award. Clearly, if the Award had been in favour of ABF, it would not have complained of any delay simply because it was prepared to go along the waiting period. Now that the Award is against it, it appears quite hollow, if not hypocritical, for ABF to then say that it is a breach of public policy, for the Award to have been delivered 4 years after the last submission of the parties. For ABF to now complain about the delay smacks of them saying “set aside the award because it is not in our favour” (see Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 1 SLR (R) 510, page 528 (CA) and Coal & Oil Co LLC v GHCL Ltd [2015] SGHC 65, paragraph 65 (HC)). While patience is undeniably a virtue, yet it ceases to be one when the circumstances constrain, if not compel one to act pro-actively. Long-suffering that suffers lamentably long must give way to steadfastness and speedy action in all seriousness. [21] Further the Arbitrator did write, albeit towards the end of the 4th year of waiting, for an extension of time to make his Award. Perhaps 16 parties had little choice after having waited so long for his Award but to convey their consent to an extension of time. After that there was another request for a further extension which the parties granted. [22] All said, while it leaves much to be desired, and certainly not in the public interest and in the interest of the parties and the system of arbitration as we know it, the long delay still falls short of being a breach of public policy and more so when parties were quite prepared to play, however reluctantly, the waiting game. [23] Thankfully no similar cases have come before our Courts and hopefully this would be the last one. Cases from other jurisdictions have managed to shed some light on what is clearly an anomaly and an aberration in an otherwise attested arbitral process in this country. [24] The Singapore Court of Appeal in Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 2 SLR 609, had to deal with a delay of about 10 years for an arbitrator to deliver his award from the completion of the hearing. The applicant there argued that after such a prolonged delay, the arbitrator would be incapable of rendering a proper award and that this is demonstrated in that he had made the award in a callous manner and did not deal with the issues raised. The Court of Appeal in rejecting this ground observed as follows: 17 "56 Another relief prayed for by the appellants in the Motion is for the setting aside of the award on the ground of misconduct on the part of the arbitrator. Four broad grounds are advanced to substantiate misconduct. First, the fact of a delay of some ten years from the completion of hearing in rendering an award. Second, after such a prolonged delay the arbitrator would be incapable of rendering a proper award and this is demonstrated in that he had made the award in a callous manner, and did not deal with the issues raised. Furthermore his reasons were deficient. Third, the imposition of interest at 8% pa for a period of twelve years, ten of which were due to the arbitrator's delay. Fourth, the arbitrator failed to deal with the counterclaim of the appellants. 57 In his grounds of judgment the learned judge below did not touch on this question of misconduct. Be that as it may, we shall briefly deal with the alleged grounds in turn. Under s 18 of the Act, an arbitrator is required, inter alia, to make an award with all reasonable despatch. A delay of the magnitude as in this case is grossly inordinate and cannot be tolerated. We deplore such a length of delay on the part of an arbitrator. It can only undermine faith in arbitration. The court would have removed the arbitrator for such a cause if an application had been made to the court pursuant to s 18. However, in this instance neither party felt strongly enough about the delay to take that step, though they (mainly the respondents) did send reminders to the arbitrator: see P 53 above. Now that the award had been rendered we do not think the delay per se could be a good ground to set aside the award. It smacks of the appellants 18 saying, set it aside because it is not in our favour. Whatever error the arbitrator made in the award should now be corrected in accordance with the procedure in s 28. 58 Turning to the second ground, that the issues were not adequately dealt with and/or the reasons in the award are deficient, this is really a ground to appeal against the award, not to set it aside. In raising this ground, it seems to us that the appellants are in substance seeking to side step the restrictions on appeals imposed in s 28. This should not be permitted. Section 28(1) does not allow the setting aside of an award on an arbitration agreement on the ground of errors of fact or law on the face of the record. 59 Turning to the third ground, the imposition of interest at 8% pa on the damages awarded, it has not been shown how that is wrong other than the fact. That the award was rendered so late. But, as between the two parties to the dispute, so long as the award was not rendered the appellants had the use of the money and thus the award of interest is not unjustified. 60 As regards the last ground, it should be borne in mind that the substance of the counterclaim was that the architect had over-certified payments and the appellants asked for repayment of the same. A perusal of the award shows that the arbitrator had in dealing with the respondents' claim under the final certificate, dealt with this aspect in working out the final accounts of the project. The counterclaim as pleaded was very much a part of the defence. Thus, we find there is no merit in this ground." (emphasis added) 19 [25] In the Singapore case of Coal & Oil Co LLC v GHCL Ltd [2015] SGHC 65, Justice Stephen Chong J. adopted the reasoning of the Court of Appeal in Hong Huat Development in the context of breach of public policy argument and ruled that delay (of 19 months) by itself is not sufficient to set aside an award: "63 The plaintiff also argues that “Singapore’s public policy demands that any arbitration and its award are presented in a fair and expeditious manner”and that the delay of 19 months in this case constitutes a violation of public policy. With respect, the plaintiff’s argument is misconceived. It trades on a conflation of the concept of public interest with that of public policy. The public interest is the wider concept. It embraces everything that is conducive to the public good ranging from the comparatively minor (clean streets) to the vital (a robust criminal justice system). An innumerable number of things could be described as not being in the public interest. However, the concept of “public policy” in the context of the setting aside of an arbitral award, as noted at [61] above, is much narrower. Violations of “public policy” only encompass those acts which are so egregious that elementary notions of morality have been transgressed. While delay in the release of an arbitral award might not necessarily be in the public interest, it cannot, in itself without more, constitute a violation of public policy. 64 In Hong Huat Development Co (Pte) Ltd v Hiap Hong &Co Pte Ltd [2000] 1 SLR(R) 510 (“Hong Huat”), the court had to consider whether an arbitral award that was released more than 20 ten years after the hearings had concluded should be set aside. The Court of Appeal held that the delay, while“grossly inordinate” and apt to “undermine faith in arbitration”, was not, per se, a sufficient basis for setting aside an award which had already been rendered (see Hong Huat at [57]). The Court of Appeal observed that the aggrieved party ought to have taken action – prior to the issuance of the award – to remove the arbitrator pursuant to s 18 of the Arbitration Act (Cap 10, 1985 Rev Ed). Having elected not to do anything, it had to live by its decision. 65 If a ten year gap between the end of the hearings and the release of the award was not a sufficient basis for setting aside an award then, a fortiori, a 19-month delay cannot be a sufficient basis for setting aside the award. If the delay were truly intolerable, the plaintiff ought to have applied under Art 14 of the Model Law for the mandate of the arbitrator to be terminated before the Award was released. However, it did not do so. It is only making the argument now because the Award that was issued was adverse to the plaintiff and not because of any delay. As bluntly observed by the court in Hong Huat at [57], an application at this late stage “smacks of the [plaintiffs]… saying, set it aside because it is not in our favour.” (emphasis added) [26] In the English case of BV Scheepswerf Damen Gorinchem v Marine Institute [2015] EWHC 1810 (Comm) paragraphs 25-26. Flaux J rejected the contention that an arbitrator’s findings of fact can be revisited if there is delay and described this as an “impermissible attempt” and held as follows: 21 [23] ... In contrast, in s 68 cases, the courts have said time and again that it is not possible for an Applicant to use the section to attack findings of fact made by the tribunal. [24] It seems to me that the furthest the analogy with the appellate decisions on which Mr Vineall QC relied can be taken on a s 68 application is that, in a case of lengthy delay between the hearing and the Award, the court might be more likely to subject the reasons to a close analysis to check that the arbitrator has dealt with all the issues put before him. However, if that analysis reveals that he has dealt with all the issues, how he has dealt with them, whether well or badly, is irrelevant on a s 68 application. As I said in my judgment in Primera Maritime (Hellas) Ltd v Jiangsu Eastern Heavy Industry Co Ltd [2013] EWHC 3066 (Comm), [2014] 1 All ER (Comm) 813, [2014] 1 Lloyd's Rep 255 at 40-41: “ ... Once it is recognised that [the tribunal] has dealt with the issue, there is no scope for the application of section 68(2)(d). As Mr Dunning correctly put it, once it is recognised that the tribunal has 'dealt with' the issue, the sub-section does not involve some qualitative assessment of how the tribunal dealt with it. Provided the tribunal has dealt with it, it does not matter whether it has done so well, badly or indifferently. 41 It is wrong in principle to look at the quality of the reasoning if the tribunal has dealt with the issue. This emerges clearly from the judgment of Thomas J (as he then was) in Hussman (Europe) Ltd v Al Ameen Development & 22 Trade Co [2000] 2 Lloyd's Rep 83 at 56 'I do not consider that s 68(2)(d) requires a tribunal to set out each step by which they reach their conclusion or deal with each point made by a party in an arbitration. Any failure by the arbitrators in that respect is not a failure to deal with an issue that was put to it. It may amount to a criticism of the reasoning, but it is no more than that.'” [25] Mr Vineall QC sought to overcome the fundamental obstacle that it is not open to an Applicant on a s 68 application to challenge the arbitrator's findings of fact by submitting that, because something had gone seriously wrong with the procedure in this case which he said cried out for correction, when that was corrected by sending the case back to another arbitrator, it would be open to Mr Vineall QC to challenge the findings of fact and invite the new arbitrator to make different findings. That submission simply demonstrated that this application is exactly what Mr Hill QC characterised it as being in his skeleton argument, an impermissible attempt to challenge the arbitrator's findings of fact. I consider that there is no basis whatsoever for reaching the conclusion that this restriction on the scope of s 68 applications does not apply in cases where there has been inordinate delay in producing the Award. [26] Were the position otherwise, the obvious question is where would the line be drawn in terms of the length of delay in publication of an Award required before the court would interfere and examine closely the findings of fact in the way in which Mr 23 Vineall QC suggests. Would a delay of three or four months be enough? Would the position be different if the arbitrator had a valid excuse for the delay, such as illness or if the arbitrator were able to demonstrate that despite the delay, he had in fact written the part of his Award dealing with the evidence within a matter of weeks of the hearing? The reality is that there is no principled basis for the approach which Mr Vineall QC advocates." (emphasis added) [27] As was pointed out by Mr Rajendra Navaratnam, learned counsel for WSB, the above case was decided under s 68 of the Arbitration Act 1996 (UK) where the consideration of serious irregularity apply. Under s 68(2)(d) of the Arbitration Act 1996 (UK), the failure of the tribunal to deal with all the issues that were put to it constitute serious irregularity and would be a ground to challenge the award whereas such a failure has not been provided under s 37 or s 42 of our AA 2005. [28] Learned counsel also referred the Court to the English Court of Appeal case of Grahame Henry Bond v Dunster Properties Limited & 2 Ors [2011] EWCA 455a where the appellant challenged the judge’s findings of facts on the ground that the judge did not hand down judgment until some 22 months after the conclusion of hearing. It was ruled by the English Court of Appeal that:

A judgment will not be automatically invalidated even where there is a long delay in rendering the judgment. 24

A judge may have adopted the practice of writing the facts immediately after the hearing to mitigate the risk of mis-recollection.

On demeanour, a judge’s impression on the demeanour of witnesses can be revived by re-reading of the judge’s notes or alternatively an experience judge would have made notes recording the impression being made on him by the witnesses. [29] The Court of Appeal's insightful observation is reproduced below: “7. The function, however, of the court hearing this appeal is not to impose sanctions or to investigate the reasons why the delay occurred. The function of this court on this appeal, which is principally brought against the judge’s findings of fact, is to consider whether any of those findings of fact should be set aside and a retrial ordered. Findings of fact are not automatically to be set aside because a judgment was seriously delayed. As in any appeal on fact, the court has to ask whether the judge was plainly wrong. This high test takes account of the fact that trial judges normally have a special advantage in fact-finding, derived from their having seen the witnesses give their evidence. However there is an additional test in the case of a seriously delayed judgment. If the reviewing court finds that the judge’s recollection of the evidence is at fault on any material point, then (unless the error could not be due to the delay in the delivery of judgement) it will order a retrial if, having regard to the diminished importance of 25 those circumstances of the special advantage of the trial judge in the interpretation of evidence, it cannot be satisfied that the judge came to the right conclusion. This is the keystone of the additional standard of review on appeal against findings of fact in this situation. To go further would be likely to be unfair to the winning party. …

Two points need to be added to this helpful passage. First, some judges adopt strategies to mitigate the risk of misrecollection. For example, some judges adopt the practice of immediately writing up the facts required to be set out in a judgement in detail almost immediately after a hearing, and that is obviously a good practice to follow especially where the crucial events turn on oral and not contemporaneous written material… The judge has made his notebooks available and his copies of the submissions which shows that he had detailed notes to work from.

The second point that I would respectfully add is to agree with the thrust of two points about the judicial assessment of demeanour made by the Privy Council in Cobham v Frett [2001] 1 WLR 1775 at 1783: “As to demeanour, two things can be said. First, in their Lordship’s collective experience, a judge re-reading his notes of evidence after the lapse of a considerable period of time can expect, if the notes are of the requisite quality, his impressions of the witnesses to be revived by the re-reading. Second, every experienced judge, and Georges J 26 was certainly that, is likely to make notes as a trial progresses recording the impressions being made on him by the witnesses. Notes of this character would not, without the judge’s permission or special request being made to him, form part of the record on an appeal. They might be couched in language quite unsuitable for public record.” (emphasis added) [30] The case of Goose v Wilson Sandiford [1998] EWCA 245, can be distinguished in that it was decided on facts completely different from the present case. In that case, the trial judge decided on the issue of representation based on the oral evidence of the witness and that the Court of Appeal found that the trial judge’s assessment could not stand and was against the weight of the evidence. [31] This Court agree with Mr Rajendra that in the present case, the Arbitrator had not relied solely on the oral evidence to find as a fact that ABF made a representation to WSB. This finding of fact was made based also on documentary evidence. In fact, the Arbitrator had analysed the evidence by listing the itemised documentary evidence as well as reproduction of relevant parts of the transcript which he relied on to support its findings. [32] This Court is satisfied that the Arbitrator’s ability to decide on the case was not compromised by the delay. The present case is analogous 27 to the case of Campbell v Hamlet [2005] 3 All ER 1116, page 1124 [Privy Council], where the Privy Council held: “[32] The present case, however, is very different from Goose’s case on the facts. The delay here was, of course, considerably longer. But whereas in Goose’s case, the judge’s ability to decide the case was clearly compromised, here it was not. Here the committee had the full transcripts of all the evidence and it was able to provide a reasoned decision in reliance upon them…” (emphasis added) [33] Learned counsel for WSB further stressed that even in cases of court litigation, an appeal court will only scrutinise and interfere if the findings of fact by the trial judge are plainly wrong. On the other hand, in cases of application to set aside an arbitral award, where there is no right to appeal (which was accepted by the parties when they opted for arbitration) and the findings of fact of an arbitrator are sacrosanct, a Court could only scrutinise the Award to see if the issues are dealt with by the Arbitrator and not to dwell further to see if the findings of fact are correct (Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 1 SLR (R) 510, paragraph 58 (CA) and BV Scheepswerf Damen Gorinchem v Marine Institute [2015] EWHC 1810 paragraphs 25-26 Comm.). With that this Court would readily agree. 28 [34] He further highlighted the fact that no prejudice has been caused as the delay affects both parties to the Arbitration as was pointed out in PT Central Investindo v Franciscus Wongso and others and another matter [2014] 4 SLR 978. Here, according to learned counsel for WSB, his client was more affected by the delay in that it was out of the monies for the period of delay whereas ABF retained the benefit and use of the monies and could invest the same for a return during the period of delay. This Court would look at the problem dispassionately and observed that whatever was the inconvenience and the uncertainty of waiting, both sides were prepared to wait and so both have no right to complain when there were various avenues opened to them should they decide not to wait patiently. Whatever that WSB has suffered is more than compensated by an award of interest of 8% per annum and 5% per annum. [35] It must be pointed out that the Arbitration in the present case was an ad hoc arbitration. There was no specific procedural rules adopted nor was there any specific timeline in which the Arbitrator has to render its Award. In an ad hoc arbitration, the arbitrator has a complete discretion on how the arbitration is to be conducted so long as the procedure adopted does not offend the rules of natural justice. This was underscored in Bremer Vulkan Schiffbau Und Maschinenfabrik v 29 South India Shipping Corporation Ltd [1981] AC 909 (HL), page 985 where the House of Lords held: “I turn then to consider what the mutual obligation of the parties are in a private arbitration. By appointing a sole arbitrator pursuant to a private arbitration agreement which does not specify expressly or by reference any particular procedural rules, the parties make the arbitrator the master of the procedure to be followed in the arbitration. Apart from a few statutory requirements under the Arbitration Act 1950, which are not relevant to the instant case, he has a complete discretion to determine how the arbitration is to be conducted from the time of his appointment to the time of his award, so long as the procedure he adopts does not offend the rules of natural justice.” (emphasis added) [36] Had the arbitration been under the KLRCA Arbitration Rules, then the safeguards of Rule 11(1) would have applied in that the arbitral tribunal shall render its final award within a period which is limited to 3 months and such time limit shall start to run from the date of the closing of final oral or written submissions. Further the arbitral tribunal shall inform the Director of the KLRCA of such date. Rule 11(2) provides that 30 such time limit may be extended by the arbitral tribunal with the consent of the parties and upon consultation with the Director of the KLRCA. [37] I agree with learned counsel for WSB that there has been waiver on the part of ABF as it was (as was WSB) contented to do nothing and wait for the Award with the full knowledge of the delay. The law does not allow a party to adopt a “head we win, tail you lose” attitude nor allow a party to keep the alleged non-adherence to rules “up their sleeve” for later use to challenge the award if it is not in their favour (Hebei Import and Export Corp v Polytek Engineering Co Ltd [1999] 2 HKC 205, at page 227 [Hong Kong Court of Final Appeal]). After all, the option that ABF may request WSB to issue a joint communication to the Arbitrator is always open to it or to even jointly terminate the mandate of the Arbitrator. [38] I agree that in line with the intention of Parliament to encourage international standardisation of arbitration laws (Explanatory Note to AA 2005) this Court ought to give effect to the said intention and adopt the approach taken by these other Model Law jurisdictions to hold that a delay in rendering an arbitral award per se does not violate the public policy of Malaysia nor justify the applicant to revisit the findings of fact of the Arbitrator. The reason for this overarching intention of Parliament is 31 practical; it is for the ease of reciprocity and to maintain comity of nations and a uniform approach to the Model Law. [39] This Court is in agreement with WSB's submission that, although the concept of public policy is not exhaustively defined, it is not a license to vagueness, ambiguity or fanciful ideas. Any new category of public policy must fall within the genre of categories already recognised and the Court should be slow in expanding the recognised categories. The recognised categories are fraud, corruption, bribery or breach of natural justice. [see MMC Engineering Group Berhad & Anor v Wayss & Freytag (Malaysia) Sdn Bhd [2015] 1 LNS 705 at pages 71-72, paragraphs 148-51] [40] In the present case, ABF had failed to establish that a delay in rendering an Award is a breach of a recognised public policy or at least within the established genre of categories of public policy in Malaysia or elsewhere. The cases show otherwise. Whilst this Court must register and record its abhorrence of such an inexcusable delay that can only undermine confidence in the arbitral process as we know it, this Court must resist every temptation to set it aside on ground of a new genre of public policy of delay defeating an Award altogether especially when parties have acquiesced in waiting for the Award. Granted the categories of public policy are not closed but the Court must be cautious of creating 32 or recognizing new ones under the guise of showing contempt and censuring delay in rendering an arbitral award. Whether the Arbitrator's determination of Issues 1-10 is in breach of natural justice or of any public policy and thus justifying the setting aside of the Award [41] It is trite that an applicant challenging an arbitral award based on a breach of public policy must (i) identify the particular public policy which is said to be conflicted and (ii) provide evidence as to how it is conflicted and (iii) how the breach prejudiced their rights. [42] In The Government of India v Cairn Energy India Pty Ltd & Ors [2014] 9 MLJ 149, her Ladyship Mary Lim J (now JCA) examined the authorities from Hong Kong, New Zealand and Singapore dealing with the concept of public policy and concluded that the reasoning in these cases was equally applicable to Malaysia. Justice Mary Lim in Cairn Energy's case (supra) at p 187 observed as follows: "[141] Model Law recognises that each state has its own concept of what is required of 'public policy'. Nevertheless, it may be said that since sub-para 37(1)(b)(ii) is subject to the same overlying conditions as sub-paras 37(1)(a)(iv) and (v), and that is it is discretionary, having regard to the context of the dispute, that it 33 arises out of commercial and contractual transactions where parties have received more than adequate advice, including legal counsel; and that bargains are arms' length, the public policy that is envisaged in this provision must be read narrowly and more restrictively. [142] Although there appears to be no requirement of 'proof in this subpara, and whilst the question of what amounts to 'public policy' may be a difficult one, I would also venture to say that the court nevertheless requires sufficient basis for such allegation or ground in order that it may 'find' that 'the award is in conflict with the public policy of Malaysia'. This requirement extends to not only identifying the particular public policy of Malaysia which is said to be conflicted but also to providing basis of the alleged conflict; that is how it is conflicted or breached; and how the breach has prejudiced the rights of the plaintiff. [143] This makes the threshold high in that by its very nature, it should be immediately obvious or at least fairly rapidly apparent that there has been such a breach or conflict with the public policy of Malaysia court. From the reasons offered, the court must be compelled to agree or that a strong case has been made out that the award conflicts with the public policy of Malaysia. Otherwise, the contractual arrangements of the parties must be 34 maintained. These views were expressed in Hebei Import & Export Corp v Polytek Engineering Co Ltd (1999) 2 HKCFAR 111; and Downer-Hill Joint Venture v Government of Fiji [2005] 1 NZLR 554 at pp 565–570, and I agree that it should be the case here. [144] Discussions along these same lines can be found in Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80, John Holland Pty Ltd (formerly known as John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan) [2001] 1 SLR(R) 443; affirmed in the Court of Appeal's decision in Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86. [145] This narrow approach was advocated and adopted by the Singapore Court of Appeal in PT Asuransi, p 622. The Chief Justice of Singapore expressed clear views that:

Although the concept of public policy of the State is not defined in the Act or the Model Law, the general consensus of judicial and expert opinion is that public policy under the Act encompasses a narrow scope. In our view, it should only operate in instances where the upholding of an arbitral award would 'shock the conscience' (see Downer Connect

at (136), or is 'clearly injurious to the public good or … wholly offensive to the ordinary reasonable and fully 35 informed member of the public' (see Deutsche Schachbau v Shell International Petroleum Co Ltd [1987] 2 Lloyds Rep 246 at 254, per Sir John Donaldson MR), or where it violates the forum's most basic notion of morality and justice: see Parsons & Whittemore Overseas Co Inc v Societe Generalede L'lndustrie du Papier (RAKTA) 508 F 2d 969 (second Cir, 1974) at 974. This would be consistent with the concept of public policy that can be ascertained from the preparatory materials to the Model Law. As was highlighted in the Commission Report (A/40/17), at para 297 (referred to in A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary by Howard M Holtzmann and Joseph E Neuhaus (Kluwer, 1989) at 914): In discussing the term 'public policy', it was understood that it was not equivalent to the political stance or international policies of a State but comprised the fundamental notions and principles of justice … It was understood that the term 'public policy', which was used in the 1958 New York Convention and many other treaties, covered fundamental principles of law and justice in substantive as well as procedural 36 respects. Thus, instances such as corruption, bribery or fraud and similar serious cases would constitute a ground for setting aside. (Emphasis added.)" (emphasis added) [43] Issues 1-10 as determined by the learned Arbitrator shall be treated together as they all suffer from the same infirmity in that the specific public policy has not been identified and no evidence has been shown as to how the public policy is said to have been breached. [44] No vague allegation that the determination of the learned Arbitrator is inconsistent with Malaysian law and the rule of natural justice and that the findings are purportedly not supported by evidence and law, would suffice. Basically ABF is unhappy with the determination of the learned Arbitrator on all the Issues 1-10 and even if there be errors of law and fact in respect of the Arbitrator's determination of these issues, that do not qualify to be a breach of public policy that justify setting aside the Award. An error of law or of fact does not engage the public policy of Malaysia. See also the strict approach taken by the Singapore courts in Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd [2010] 3 SLR 1 and in PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR 597. 37 [45] This Court agrees with the following observations of learned counsel for WSB as applying to all the 10 Issues and determination that are sought to be impugned:

Both the parties were given sufficient opportunities to address the learned Arbitrator as can be seen from the lengthy hearings of the arbitral proceedings which took 27 days from 2007 to 2009;

Both parties were represented by very competent senior counsel in the arbitration;

No allegation was made by ABF in respect of demand of right to be heard or anything of the nature that is in breach of the principles of natural justice;

The contents of the Final Award reflected the great care taken by the learned Arbitrator in arriving at his determination;

The learned Arbitrator considered all the evidence and submissions and deliberated and delivered a reasoned Award. [46] Time and again we must remind ourselves that an application under s 37 AA 2005 is not an appeal and this Court cannot go into the merits of the determination to examine as it were, its correctness. 38 [47] Each of the Issues shall now be dealt with singly or together as may be appropriate but only so much as may be relevant in a s 37 AA 2005 application so as to avoid overlapping with similar issues which are framed as a reference of questions of law under a s 42 AA 2005 application which shall be taken up later in this Judgment. Issue 1 - Whether given that the contract provides a Provisional Sum for rock excavation of 25,000 m3, is WSB entitled to an extension of time as a result of the discovery of the rock? [48] The key contention raised by ABF in respect of Issue 1 is that the learned Arbitrator had failed to properly consider the issue as he did not take into account the contractual provisions of the Contract. [49] The Arbitrator had taken into account the Commercial Proposal, the Techno Commercial Meeting Minutes and the Letter of Award as well as the oral evidence of the parties and the fact that he had arrived at a finding that ABF disagree with is no justification for setting aside the Award. The law does not require the learned Arbitrator to state and list everything that he had considered in arriving at his decision. The sagacious speech of his Lordship Raja Azlan Shah J (as his Royal Highness then was) in Sharikat Pemborong Pertanian & Perumahan 39 v Felda Land Development Authority [1971] 2 MLJ 210 at pp 211-212 is worthy of repetition: "... The arbitrator in the present case had carefully analysed and appraised the material and relevant evidence as he saw fit and came to a conclusion of law. He concluded by saying that: "I find on the evidence that the plaintiffs were not justified in abandoning the contract, as they did in or about the middle of March 1967, before the completion of the contract." When he used the phrase "I find on the evidence" it must be taken as axiomatic that he had taken into account all material and relevant evidence and the determination of points of law and fact to suit the particular case in hand. It would be an intolerable burden on any arbitrator if he were to mention all and every piece of evidence and questions of law and fact in his award. He is not required to do that. He need only refer to material and relevant evidence to suit the key question to the dispute ..." (emphasis added) [50] Likewise the learned Arbitrator in the present case had stated that he had considered all issues and evidence in arriving at his conclusion and determination. At page 16 of the Award the said Arbitrator declared as follows: "... having heard the parties' claims, defence and counterclaims, having reviewed and considered carefully all documents, evidence 40 presented and submissions by the parties, DO HEREBY MAKE AND PUBLISH THIS MY FINAL AWARD as set out hereafter." [51] It must therefore be understood that the learned Arbitrator had considered all issues and evidence without the need for him to list down each and every piece of evidence and submissions considered. Already the Award has stretched over 1,053 pages in 2 volumes. Surely there is a place for brevity without sacrificing brilliance and clarity in analysis of the evidence presented and the conclusion arrived at. [52] The learned Arbitrator had also made the following findings of facts as summarised by learned counsel for WSB as follows:

The Provisional Sum for the rock is clearly outside the total sum tendered for the Project, on a plain reading of the

The present contract is different from the traditional lump sum contract where the Provisional Sum will be included in the computation of the lump sum contract itself;

The sum of RM 2 million as a Provisional Sum for the rock excavation was not priced and so not included in the original contract sum;

In essence, a true Provisional Sum is that which must be included mathematically in the original contract sum;

A true 'Provisional Sum' is used as a temporary 'placeholder' for an element of the work that is not finally decided upon or priced at the time of the signing of the contract. Once the item has been finalised, the actual sum is put into the contract price in place of the Provisional Sum;

This exercise is carried out at final account stage where the Provisional Sum is deducted from the contract sum and added back to the true value of the work into the contract sum. In other words, where the Provisional Sums are expended, the Contract Price shall be adjusted accordingly.

It is not possible to adjust the Contract Price of RM9,614,898.15 as the RM2 million for the so-called Provisional Sum was not included mathematically in the

The suggestion of ABF that earthworks included excavation of rocks is rejected as ABF by its own admission, had recognised and conceded that rock excavation as a variation to the contract;

WSB had not assumed the risk of rock excavation and that WSB's original work programme did not include rock excavation;

ABF had informed WSB that there was negligible amount of rock and that WSB had planned its work Programme premised upon a rock free environment. [53] Based on the above findings of fact, the learned Arbitrator found and held that given the contract provides for a Provisional Sum for rock excavation of 25,000 m3, WSB is entitled to an extension of time for rock excavation as a result of the discovery of the rock. Clearly there is a basis for the learned Arbitrator to arrive at his determination and this Court sees no good reason to interfere with what is essentially a finding of fact of the Arbitrator, he being the master of facts and his findings of facts, sacrosanct. This Court shall not venture into an Arbitrator's pure province and contradict his finding of facts, even if this Court is inclined to a different finding and conclusion (which in this case it is not) as that would fly in the face of settled principles of law in that an Arbitrator's findings of fact is sacrosanct. Issue 2 - Whether ABF had misrepresented any material facts or had given any warranty as to the amount of rock on site? 43 [54] Again most of ABF's argument here is an indirect challenge on the findings of fact of the learned Arbitrator which is not permitted in a s 37 AA 2005 application. The finding of the learned Arbitrator that ABF had misrepresented to WSB that the amount of rocks on site was negligible is a finding of fact which he is entitled to make. It is trite and settled law that an arbitrator is the master of facts and his factual findings are final regardless of whether they are right or wrong. (See Cairn Energy at paragraph 174.) Essentially ABF's contention is that the alleged misrepresentation could not have been so found by the learned Arbitrator as that is contradicted by the written terms of the Contract. That is misconceived. The Federal Court in Tan Swee Hoe Ltd v Ali Hussain Bros [1980] 2 MLJ 164 at p 18 had held that a collateral agreement (which is formed by the representation) can exist side by side with the agreement that it contradicts. The learned Arbitrator made a finding of fact that the Provisional Sum is outside the Contract. [55] There was also the submission from learned counsel for ABF, Mr Sanjay Mohan, that there are no damages that could be claimed from innocent misrepresentation. However, that does not answer the case of breach of collateral warranty on the same facts which was how the matter was pitched and presented before the learned Arbitrator. See Hartela Contractors Ltd v Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 44 788 at pp 798-799, per Gopal Sri Ram JCA (later FCJ) adopting Lord Denning's approach in Esso Petroleum Co Ltd v Mardon [1976] QB

[56] I would agree with WSB that the contentions raised by ABF in respect of this Issue do not meet the threshold required to establish a breach of public policy. Issue 3 : Whether the parties had agreed to an extension of time to 20 July 2002 based on excavation of 16,000 m3 of rock only? [57] ABF's contention on this Issue is that the Arbitrator had decided on a point beyond the pleadings. This is misconceived. What the Arbitrator had decided and found as a matter of fact that the extension of time to 20 July 2002 was premised on the excavation of 16,000 m3 of rock only and that WSB's licensed surveyor confirmed that the volume of rock was 17,775 m3. This is found at paragraph 17 of the Reply to Defence and Defence to Counterclaim at page 544 of Exhibit D of the Affidavit in Support Vol 2. [58] The Arbitrator had found that an extension of time was expected to be given if the rock quantity was greater. This finding was reinforced by ABF's own admission in its own internal email that an extension is expected at p 47 Exhibit MBM 4 Defendant's Affidavit in Reply. The 45 learned Arbitrator agreed with WSB's submission that it must necessarily be implied in any agreement to complete the Works by a specified date necessitated by matters which were outside WSB's obligation under the Contract (in this case rock excavation or at least rock excavation beyond the negligible quantities warranted), that it must be premised on the quantity of rock known at the time of the agreement. In this regard the learned Arbitrator relied on the Federal Court's decision of Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pal Leong [1998] 3 CLJ 503 at pp 532-533. [59] The learned Arbitrator further found that WSB did not agree to complete by a fixed date without knowing what was the final quantities of rock and that WSB was entitled to be compensated for all rock quantities excavated in accordance with the Contract. This would include the money and time claims arising from the rock excavation. Accordingly the learned Arbitrator concluded that ABF's contention that the agreement to extend the completion date to 20 July 2002 was not premised on the amount of rock cannot be sustained. [60] The learned Arbitrator found that ABF had not adduced any cogent evidence to rebut WSB's evidence through its surveyor that the volume of rock excavated was 17,776 m3. Being a finding of fact this Court 46 would be loathed to interfere with it. See Cairns Energy (supra) at p 196 paragraph 174. [61] At any rate, the implied term argument is not material as the learned Arbitrator had made a finding of fact, which ought not to be disturbed by this Court. Moreover the argument was raised in WSB's submission and this was not objected to by ABF. ABF cannot now take issue on this point. See Hartela Contractors Ltd v Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788 at p 804. [62] Clearly there was nothing in the learned Arbitrator's decision on Issue 3 that would shock the conscience or is injurious to public good that will qualify as a breach of the public policy of Malaysia or a breach of natural justice. [63] Even if there be errors of law and facts per se, that does not make the Award contrary to public policy. Time and again this Court must remind itself that it does not sit in its appellate capacity. Issues 4 to 6 Issue 4: Whether there are any other events of delay that would entitle the Claimant (WSB) to an extension of time beyond 20 July 2002?; 47 Issue 5: If the above question is answered in the affirmative, whether the extension of time to July 2002 adequately takes into consideration these other events of delay?; Issue 6: Whether the delays to the completion of the Works were caused by or contributed to by WSB?; [64] Learned counsel for ABF was in essence saying that in the event this Court agrees with ABF on Issue 3, then this would mean that the learned Arbitrator was wrong in his conclusions on Issues 4 to 6. As this Court does not agree with ABF on Issue 3 for the reasons above-stated, it would correspondingly mean that this Court should not disturb the findings and determination of the learned Arbitrator in Issues 4 to 6. [65] In any event, a perusal of the learned Arbitrator's reasoning on Issues 4 to 6 in the Final Award shows that his findings are sustainable in law and in fact as well as supported by evidence. See pages 765-899 of Exhibit E of Affidavit in Support Vol 3 and pages 900-962 of Exhibit E of Affidavit in Support Vol 4. On Issue 4 the learned Arbitrator found that there were 3 slope failures. The instructions on how to deal with the first slope failure was only issued by ABF in January 2002. The Arbitrator found as a matter of fact that it was ABF's delay in issuing the instructions on how to deal with the 3 slope failures as the cause of the delay and that WSB was entitled to an extension of time beyond 20 July 48

There were eight delay events as found by the learned Arbitrator under Issue 5 and that the extension of time to July 2002 did not adequately take into consideration the 8 events of delay set out under Issue 5. Accordingly the learned Arbitrator held that WSB was entitled to extension of time until 31 January 2003. On Issue 6 the learned Arbitrator had given his reasons why he had found that the delay in the completion of the Works was not caused by WSB. [66] Even assuming for a moment that there is a problem of sufficiency of evidence for him to arrive at his findings, that is not a ground for setting aside the Award as this is a matter within his province. [67] I agree with learned counsel's submission on behalf of WSB that the learned Arbitrator had considered the evidence for and against in arriving at his determination here and it is not for this Court to inquire into the correctness of his determination as a back door way of re-opening or re-examining the merits of the case. This Court must also guard against treating this challenge under s 37 AA 2005 as an appeal, which it is not. [68] Nothing comes close to shocking the conscience where a breach of natural justice is concerned and otherwise there is no clear public policy that has been identified as having been breached by the 49 Arbitrator. Therefore this ground of setting aside the Award must also fail. Issue 7 : Whether if WSB is entitled to an extension of time to July 2002 (or to another date) the amount of prolongation costs that the Claimant WSB is entitled to? [69] The learned Arbitrator concluded that WSB is entitled to payment of RM4,360,594.31 for prolongation costs. The Arbitrator found that WSB is entitled in law to prolongation costs arising from delay as a result of ABF's breach of contract in the misrepresentation on the quantities of rock and the implied obligation to issue instructions within a reasonable time. The Arbitrator had relied on the case of Hartela Contractors Ltd v Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788 at pp 798-799 which observed as follows: " ... the statement of principle contained in the judgment of Lord

Denning M.R. in Esso Petroleum Co. Ltd. v. Mardon [1976] QB The Master of the Rolls there said (at p. 817): Ever since Heilbut, Symons & Co v. Buckleton [1913] AC 30, we have had to contend with the law as laid down by the House of Lords that an innocent misrepresentation gives no right to damages. In order to escape from that rule, the pleader used to allege ... that the misrepresentation was fraudulent, or alternatively a collateral warranty. At the trial we nearly always succeeded on collateral warranty... 50 [There] have been many cases... where we have readily held a representation - which induces a person to enter into a contract - to be a warranty sounding in damages. I summarized them in Dick Bentley Productions Ltd v. Harold Smith (Motors) Ltd [1965] 1 All ER 65... In the present case it seems to me that there was a warranty that the forecast was sound, that is, Esso made it with reasonable care and skill. That warranty was broken ... For this they are liable in damages ... In the earlier case of Dick Bentley Productions Ltd v. Harold Smith (Motors) Ltd [1965] 1 All ER 65, Lord Denning M.R. said (at p. 67): Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a contract for the very purpose of inducing the other party to act on it, and it actually induces him to act on it by entering into the contract, that is prima facie ground for inferring that the representation was intended as a warranty. It is not necessary to speak of it as being collateral. Suffice it that the representation was intended to be acted on and was in fact acted on." [70] Learned counsel Mr Rajendra's submission for WSB on the findings of the Arbitrator and his application of law to the facts found may be summarised as follows:

ABF was under an implied obligation to issue instructions within a reasonable time to enable WSB to meet its 51 obligations under the contract and that a failure to do so will expose ABF to a claim in damages by WSB. Reference was made to the passages in Duncan Wallace's QC Hudson's Building and Engineering Contract 11th Ed at pp 100 and 309;

The failure of Protek to issue instructions to deal with slope failures no. 1,2 and 3, which persisted until actual completion date, renders the prolongation costs by WSB for this period operative;

The rock related delays overlapped with that for the delay in issuing instructions for slope failure no.1 and the delay in issuing instructions for slope failures 2 and 3 persisted until S.I. Nos. 35 and 36 omitted these works in January 2003, just before the actual completion date;

ABF did not rebut the fact that the instructions pertaining to the various slope failures were outstanding until S.I. Nos. and 36 were issued;

WSB is entitled in law to losses, expenses and damages that it had suffered for the entire prolongation period from end of November 2001 right up to January 2003 pursuant to s 74

WSB is entitled to prolongation costs right up to 31 January 2003 as ABF's breaches, in particular the misrepresentation as to the quantities of rock and the implied obligation to issue instructions to deal with slope failures in a reasonable time, had caused the delay events and continuing until the end;

WSB is entitled to complete within reasonable time or at least until the actual completion date of 31 January 2003 as these delay events affected WSB's work;

WSB is not bound by the purported extended deadline of 20 July 2002 as it did not take into account the prevailing circumstances at the material time and not supported by any evidence. [71] Having laid the factual findings and basis for the legal entitlement to prolongation costs, the next issue of quantum of prolongation costs is something within the pure purview and province of the learned Arbitrator. It is not for this Court to disagree with the factual basis or the application of the law and in any event, this Court does not disagree with the approach that the learned Arbitrator had taken with respect of assessing this head of damages. 53 [72] Therefore this challenge on Issue 7 by ABF under s 37 AA 2005 under the public policy ground and in particular breach of natural justice has no basis whatsoever and fails. Issue 8: Whether apart from the claim for prolongation costs, is WSB entitled to any other costs or damages? [73] The thrust of this head of challenge is not on the findings with respect to the various invoices not paid or the loss of profit from omission of works, workstation but the award of Financial Charges to the tune of RM4.6 million. This sum is based on the bank interest from the overdraft facility for this Project. [74] The submission of Mr Rajendra for WSB with respect to the learned Arbitrator's findings on Financial Charges may be summarised thus:

WSB had obtained a loan facility for this Project and not for some other projects and had succeeded in linking these Financial Charges to this Project;

WSB had explained the manner by which the overdraft facility was taken and the extent by which this was affected by the non-payment of ABF;

WSB has the right to be paid on time and it is for ABF to arrange its financial affairs such that it can make payments in due time and in accordance with the contract.

WSB is justified in its claim for Financial Charges as a result of delayed payment by ABF as it has incurred additional interest and financial charges on its borrowings to finance the Project and loss of interest on its Fixed Rate Deposits. [75] Mr Sanjay Mohan submitted that there was insufficient evidence of these Financial Charges other than the audited accounts (pages 476 of Award) and that the learned Arbitrator's acceptance of the CW 1 is questionable as the bank officer was not called to explain the financing nor the accountant from WSB. [76] Again this Court must resist every invitation to enter into the realm of sufficiency of evidence with respect to the Arbitrator's finding of facts here. At the end of the day ABF has failed to show how the public policy of Malaysia has been breached or that there is a breach of natural justice of the kind that would prick the conscience. Issue 9: Whether if WSB is only entitled to an extension of time to July 2002, is ABF entitled to claim for liquidated damages for the delay caused by WSB? 55 [77] Learned counsel for WSB submitted that since under Issue 3 the learned Arbitrator had ruled that WSB was not bound by the completion date of 22 July 2002 as time was at large, it follows that ABF had lost its right to any alleged liquidated damages. This ruling was made on the basis that WSB is entitled to a reasonable extension of time to complete the works by 31 January 2003. Accordingly the learned Arbitrator had held that ABF is not entitled to liquidated damages that it seeks to claim from WSB. [78] He further submitted that in any event ABF had also failed to prove its actual damage or loss as required by the Federal Court in Selva Kumar a/l Murugiah v Thiagarajah a/l Retnasamy [1995] 2 CLJ 374 at p 382. [79] Clearly it has not been shown how the determination of the learned Arbitrator has breached the rules of natural justice in shocking the conscience or that it is injurious to public good that would qualify as a breach of the public policy of Malaysia. Issue 10: Whether ABF is entitled to the increased costs of completing the works? [80] The learned Arbitrator found that there is no evidence produced by ABF to support its claim and in particular that it had made the alleged 56 payment to the new contractor. ABF had also failed to show who were the personnel involved in the project, what was actually paid to the completion contractor and whether the contract was performed or whether it was varied. ABF had not offered any reason for this omission. [81] Consequently the learned Arbitrator found that ABF had failed to establish this head of claim on the balance of probabilities. Again this Court must repeat the refrain that nothing came close to shocking the conscience if there has been a breach of natural justice and it has not been shown how the breach has arisen. Nothing too has been shown as to how this finding has resulted in a breach of public policy as being injurious to public good. This final ground of challenge must also fail. [82] In the result the whole of the application to set aside the Award under s 37 AA 2005 has to be dismissed for the reasons given above. Principles - Application under s 42 AA 2005 [83] The key provisions of s 42 of the AA 2005 shall be examined for the present purposes. They are s 42(1), (1A) and (2). These provisions set out the parameters of any challenge against arbitration awards: “42

Any party may refer to the High Court any question of law arising out of an award. 57

The High Court shall dismiss a reference made under subsection (1) unless the question of law substantially affects the rights of one or more of the parties.

A reference shall be filed within forty-two days of the publication and receipt of the award, and shall identify the question of law to be determined and state the grounds on which the reference is sought.” (emphasis added) [84] The governing principles under s 42 of the AA 2005 as distilled from the cases, have been summarised in the recent Court of Appeal decision of Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 1 CLJ 617, at p 636-637 (“Perwira Bintang”), which held as follows: “[57] On the present case-authorities, a number of propositions can be stated as guidelines. We enumerate these below, without intending them to be exhaustive, since clearly the law has to be developed further.

The question of law must be identified with sufficient precision (Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Sdn Bhd [2010] 5 CLJ 83; Maimunah Deraman v Majlis Perbandaran Kemaman, supra;

The grounds in support must also be stated on the same basis; 58

The question of law must arise from the award, not the arbitration proceedings generally (Majlis Amanah Rakyat v Kausar Corporation Sdn Bhd, supra, Exceljade Sdn Bhd v Bauer (Malaysia) Sdn Bhd, supra);

The party referring the question of law must satisfy the court that a determination of the question of law will substantially affect his rights;

The question of law must be a legitimate question of law, and not a question of fact “dressed up” as a question of law (Georges SA v Trammo Gas Ltd (The Baleares) [1993] 1

The court must dismiss the reference if a determination of the question of law will not have a substantial effect on the rights of the parties (Exceljade Sdn Bhd v Bauer (Malaysia) Sdn Bhd, supra);

The jurisdiction under s. 42 is not to be lightly exercised, and should only be exercised only in clear and exceptional cases (Lembaga Kemajuan Ikan Malaysia v WJ

Nevertheless, the court should intervene if the award is manifestly unlawful and unconscionable;

The arbitral tribunal remains the sole determiners of questions of fact and evidence (Gold and Resource Development (NZ) Ltd v Dough Hood Limited [2000] 3 NZLR 318); and

While the findings of facts and the application of legal principles by the arbitral tribunal may be wrong (in instances of findings of mixed fact and law), the court should not 59 intervene unless the decision is perverse” (emphasis added) [85] A question of law must be based on the factual findings and legal analysis in an award (see Prestige Marine Services Pte Ltd v Marubeni International Petroleum (S) Pte Ltd [2012] 1 SLR 917, at p 933). In other words the factual findings cannot be sought to be altered by a so-called question of law. [86] If the factual or legal premises on which the question of law are based cannot be found in the award, the application under s 42 would be fatally flawed. A question of law then cannot be premised on facts different from what had been found by the arbitrator. In such a situation, the questions of law would not arise out of the award as they cannot be related to the findings of fact and legal analysis in the award. [87] An aggrieved party seeking to set aside the whole or part of an award under s 42 AA 2015 must resist the tantalizing temptation to try the backdoor way of getting the Court to reverse the finding of facts of an arbitrator by asking the Court to answer so-called questions of law that are not premised on facts as found by the arbitrator. A question of law cannot be posed in a vacuum but must arise from the finding of facts of an arbitrator. 60 [88] What then would constitute a genuine question of law? The Court of Appeal in Perwira Bintang (supra) at pages 637-638, adopting the analysis of Exceljade Sdn Bhd v Bauer (Malaysia) Sdn Bhd [2013] 1 LNS 1470 (“Exceljade”), at pages 14-16, and Finelvet AG v Vinava Shipping Co Ltd, The Chrysalis [1983] 1 Lloyd’s Rep 503, at page 507 (“The Chrysalis”), held: “Mustill J. Then goes on to consider the proper test or approach to be adopted by a court determining the substantive appeal which turns on a question of law arising out of the arbitration: ... Starting therefore with the proposition that the court is concerned to decide on the hearing of the appeal whether the award can be shown to be wrong in law, how is this question to be tackled? In a case such as the present, the answer is to be found by dividing the arbitrator’s process of reasoning into three stages. (1) The arbitrator ascertains the facts. This process includes the making of findings on any facts which are in dispute. (2) The arbitrator ascertains the law. This process comprises not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached. (3) In light of the facts and the law so ascertained, the arbitrator reaches his decision. 61 In some case, stage (3) will be purely mechanical. Once the law is correctly ascertained, the decision follows inevitably from the application of it to the facts found. In some instances, however, stage (3) involves an element of judgment on the part of the arbitrator. There is no uniquely “right” answer to be derived from marrying the facts and the law, merely a choice of answers, none of which can be described as wrong. Stage (2) of the process is the proper subject matter of an appeal under the Act of 1979...” ... [60] In practical terms, we are persuaded that we should be looking at stage (2) of the process of reasoning as the proper focus of the inquiry under s. 42, which will mean ascertaining not so much a clear position of the “law”, without regard to the underlying facts, but, as analysed, the arbitrator will be ascertaining the “law” as a process comprising “not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached.” Typically, this process will involve a mixed consideration of relevant statutory rules, case laws and legal principles, and an identification of the relevant facts on which to apply the “law”.” (emphasis added) 62 The First Stage – findings of facts by the arbitrator [89] The first stage has nothing to do with a question of law. The arbitrator determines the facts and his findings of facts cannot be challenged. The court is circumscribed by s 42 AA 2005 to decide any question of law arising from an award premised on the basis of a full and unqualified acceptance of the findings of fact of the learned Arbitrator. The recent decisions of the Malaysian Court in Perwira Bintang (supra) page 637 (CA) and Exceljade (supra) pages 52-53, paragraph 105 (HC) underscore this approach. [90] Learned counsel for WSB referred to the decision of the English Court of Appeal in Georges SA v Trammo Gas Ltd (The Baleares) [1993] 1 Lloyd’s Rep 215 (“The Baleares”), adopted by our courts in Perwira Bintang (CA) and Exceljade (HC), and quoted from pages 227-228, the instructive exposition of Lord Justice Steyn, as follows: “This is an appeal under s.1 of the Arbitration Act, 1979 on “a question of law arising from an arbitration award”. For those concerned in this case that is a statement of the obvious. But it matters. It defines the limits of the jurisdiction of the Court hearing an appeal under the 1979 Act. The arbitrators are the masters of facts. On an appeal the Court must decide any question of law arising from an award on the basis of a full and unqualified acceptance of the findings of fact of the arbitrators. It is irrelevant whether the Court considers those findings of fact 63 to be right or wrong. It also does not matter how obvious a mistake by the arbitrators on issues of fact might be, or what the scale of the financial consequences of the mistake of fact might be. That is, of course, an unsurprising position. After all, the very reason why parties conclude an arbitration agreement is because they do not wish to litigate in the Courts. Parties who submit their disputes to arbitration bind themselves by agreement to honour the arbitrators’ award on the facts. The principle of party autonomy decrees that a Court ought never to question the arbitrators’ findings of facts”. ... ... This catalogue of challenges to arbitrators’ findings of fact points to the need for the Court to be constantly vigilant to ensure that attempts to question or qualify the arbitrators’ findings of fact, or to dress up questions of fact as questions of law, are carefully identified and firmly discouraged. It is a matter for consideration whether objectively the present case involves yet another challenge to the arbitrators’ findings of fact despite Counsel’s disavowal of such intention.” (emphasis added) [91] It is axiomatic to note that the Court of Appeal in The Baleares, at p. 232, had this to say on arguments that there is no evidence to support a finding of fact of the arbitrator: “If leave is given on one discrete point of law, it will then be possible also to argue that there is no evidence to support a finding of fact thereby compelling the Court to review the relevant and weight of the evidence before the arbitrators. The power to 64 review a finding of fact of a tribunal on the ground that there is no evidence to support it, and that there is therefore an error of law, is a useful one in certain areas of the law, notably in the administrative law field. But in the limitation appellate jurisdiction of the Court under s. 1 of the Arbitration Act, 1979 this concept has no useful role to play...” (emphasis added) The Second Stage – ascertaining the law [92] Learned counsel for WSB submitted that the second stage of the arbitrator’s reasoning process involves determining the material law, interpreting the contractual documents that are the subject matter of the arbitral proceedings, identifying the relevant facts that should be considered in the arbitrator’s legal analysis. [93] Learned counsel further explained that it is this stage of reasoning that a question of law for the purposes of s. 42 of the AA 2005 may arise. In this respect, there are two possible scenarios where an error of law may arise, as described below:

The arbitrator could have erred by setting out an erroneous view of the law in its reasons. The arbitrator’s finding of the law would then clearly be reviewable as a question of law (see Mustill & Boyd “The Law and Practice of Commercial Arbitration in England” (2nd Ed) – at p. 591-592). 65

The arbitrator could have erred when marrying the law to the facts. An error here can only arise if the tribunal’s conclusion based on the law and the facts do not fall within an acceptable range of decisions that a reasonable tribunal could reach (see Mustill & Boyd “The Law and Practice of Commercial Arbitration in england” (2nd Ed) – at pg. 593-594). The Third Stage – Reaching The Decision [94] The third stage of the arbitrator’s reasoning process involves making a determination/decision based on its reasoning process during the second stage. If the arbitrator has gone wrong in the second stage, its determination in the third stage would almost certainly be wrong. However, it is important to emphasise that in many cases the reasoning process in the second stage can yield more than one correct answer, as recognised by Mustill J. In The Chrysalis, p 507. If this is the case, the mere fact that an arbitrator has chosen an available answer that would not have been preferred by the court reviewing its award in order to arrive at its determination in the third stage will not be a reason justifying judicial interference (see also Perwira Bintang, page 638, Exceljade, pages 27-28, paragraph 40) [95] Learned counsel for WSB also referred to the decision Justice Mary Lim J. (now JCA) of MMC Engineering Group Berhad & Anor v 66 Wayss & Freytag (Malaysia) Sdn Bhd [2015] 10 MLJ 689 where Her Ladyship has also held, at pages 16-17, that: “[32] ... the questions of law now identified for determination of this Court cannot be the same or be re-hatched questions that the parties had already referred to arbitration in the first place. This is apparent from a reading of subsection 42(2) which is couched in mandatory language requiring the applicant or the Plaintiffs to identify the question of law “to be determined”, that is, to be determined by the Court in the present proceedings. This is regardless of the Court’s powers to inter alia remit the award in whole or in part, together with the Court’s determination on the question of law to the arbitral tribunal for reconsideration. I do not believe the question of law can include the specific question that was posed for determination by the arbitral tribunal in the first instance. In that scenario, the question, albeit a question of law, remains one which the Court ought not to intervene and determine. The views expressed in Sharikat Pemborong Pertanian & Perumahan v Federal Land Development Authority [1971] 2 MLJ 210 and The Government of India v Cairns Energy India Pty Ltd & Anor [2011] 6 MLJ 441 remain good law in this respect.” (emphasis added) [96] See also: FR Absalom Limited v Great Western (London) Garden Village Society [1993] AC 592, page 602 and Government of Kelantan v Duff Company Limited [1923] AC 395, at page 409). 67 [97] Learned counsel for WSB also referred to the decision of Jackson J in Kershaw Mechanical Services Ltd v Kendrick Construction Ltd [2006] EWHC 727, (“Kershaw”), which was adopted by Exceljade, pages 20 and 22, as raising additional factors which ought to be considered by the Court in applying s 42 AA 2005 in the present case:

Firstly, for the purposes of reviewing any question of law referred to the court, the key documents that should be looked at are the award and any other documents referred to in the award which the court needs to read in order to determining a question of law;

Secondly, the court should read the arbitral award as a whole in a fair and reasonable way. The court should not engage in minute textual analysis; and

Thirdly, where the arbitrator’s experience assists him in determining a question of law, such as the interpretation of contractual documents or correspondence passing between members of his own trade or industry, the court will accord some deference to the arbitrator’s decision on that question. [98] It cannot be over-emphasised that in an application pursuant to s 42 of the AA 2005, the applicant must proceed with an unqualified acceptance of the findings of facts of the learned Arbitrator. It is settled 68 law that the court will not disturb the same as the arbitrator remains the master of the facts (Perwira Bintang, page 637, Exceljade, page 52- 53 and The Balearas, pages 227-228). Question A “Where a construction contract includes a provisional sum item whether the contractor can claim an extension of time if it carries out these provisional sum works? [99] ABF contended that the learned Arbitrator had erred in law by concluding that WSB is entitled to extension of time on the following grounds:

ABF premised its argument on the contract which provides for a provisional quantity of 25,000 m3 of hard rock and WSB would have to complete these works within the agreed contract period and WSB is not entitled to extension of time. In other words, the excavation of hard rock forms part of WSB’s original scope of works, and cannot be considered as a variation to the original scope of works.

WSB had agreed to carry out and complete the earthworks (including the excavation of hard rock) within 4 months. There was no change to their work program after being allegedly informed by ABF that the amount of earthwork on site was negligible. 69

WSB would not be contractually entitled to an extension of time and it was a result of its own delays. [100] Learned counsel for WSB submitted that this Court ought not to disturb the findings of facts by the learned Arbitrator as the Arbitrator remains the master of the facts. In any event, WSB's submission is that the Learned Arbitrator’s findings are supported by overwhelming evidence. [101] In response to ABF’s contention that the learned Arbitrator had erred in law, thereby warranting the intervention of this Court, WSB proceeded to analyse the Final Award in accordance with the 3-stage analysis as laid down by Mustill J in The Chrysalis, page 507 and adopted by our Malaysian courts in Perwira Bintang, pages 637-638 (CA) and Exceljade, pages 14-16 (HC) and is reproduced below: The First Stage – The learned Arbitrator’s findings of facts The learned Arbitrator made the following findings of facts. Provisional Sum is outside the contract:

The contract between the parties is a fixed non escalating lump sum. However, the parties do not dispute that the total sum tendered for the project was for RM9,614,898.18 70 (A+B+C+D+E+F). WSB had only accepted the risks which it had priced and contracted for.

The learned Arbitrator found that the provisional sum for rock is clearly outside the total sum tendered for the project, on a plain reading of the Commercial Proposal. WSB had quoted a separate sum of RM2,000,000.00 as provisional sum for hardrock excavation in the event that hard rock is encountered during the performance excavation works at a unit of RM80.00/m3. It is this fact that differentiates the present contract from the traditional lump sum contract where the provisional sum will be included in the computation of the lump sum contract itself.

The learned Arbitrator further found that the sum of RM2,000,000.00 as provisional sum for rock excavation was not priced. As such, it was not included in the original contract sum. Earthwoks do not include excavation of rock

Additionally, the learned Arbitrator found as a fact that ABF’s suggestion that earthworks included excavation of rocks is not correct as ABF by its own admission, through 71 documentary and oral evidence, had recognised and/or conceded that rock excavation as a variation to the contract. WSB had not assumed the risk of rock excavation

The learned Arbitrator found that Clause 8.2.15 of the ITB obliges WSB to inform ABF should hard rock be encountered. It can be inferred from this that hard rock was never envisaged as part of WSB’s works in the first place.

The learned Arbitrator disagreed that WSB had assumed the risk of rock excavation because of Clause 8.2.15 of the ITB. The Learned Arbitrator found that the Clause just provides for the mechanism to determine the volume of hard rock should such a situation be encountered. WSB had planned its work programme premised upon a rock free environment

WSB had not assumed the risk of rock excavation because there was no change to its work programme. ABF had informed that there was negligible amount of rock. WSB had planned its work programme premised upon a rock free environment. 72

The learned Arbitrator found as a matter of fact that the original 4 months programmed for earthworks as discussed in the Kick-Off Meeting dated 8 November 2000 and the Construction Progress Meeting No. 1 held on 20 November 2000 was based on rock free environment. It was clear to the learned Arbitrator that WSB’s original work programme (which did not include rock excavation) was submitted as part of the tender documents as the tendered sum did not include rock excavation. The Second Stage argument of WSB is as follows: The Second Stage – Ascertaining the Law Having made the above findings of facts, the learned Arbitrator ascertained the law relating to provisional sum:

In this respect, the Learned Arbitrator had correctly recognised that May L.J. in Midland Expressway Ltd v Carillion Construction Ltd & Others [2006] Con LR 235, at page 236 (CA) (“Midland Expressway”) held that for the works to be “truly provisional” as envisaged in construction contracts, the “provisional sum” is used in the pricing mechanism to refer to work which is truly provisional and it 73 must be included mathematically in the original contract price. May L.J. in Midland Expressway held: “The term ‘provisional sum’ is generally well understood in the construction industry. It is used in pricing construction contracts to refer either to work which is truly provisional, in the sense that it may or may not be carried out at all, or to work whose content is undefined, so that the parties decide not to try to price it accurately when they enter into their contract. A provisional sum is usually included as a round figure guess. It is included mathematically in the original contract price but the parties do not expect the initial round figure to be paid without adjustment. The contract usually provides expressly how it is to be dealt with. A common clause in substance provides for the provisional sum to be omitted and an appropriate valuation of the work actually carried out to be substituted for it. In the general sense, the term ‘provisional sum’ is close to a term of art but its precise meaning and effect depends on the terms of the individual contracts.” 74

In essence, a true provisional sum is that which must be included mathematically in the original contract sum. Whilst the quantities of the rock excavation may be unknown at the time of entering into the contract, the make-up of the cost must be such that the Contract Price must be capable of adjustment.

This is because a true ‘provisional sum’ (meaning a provisional price) is used as a temporary ‘placeholder’ for an element of the work that is not finally decided upon or priced at the time of signing the contract. Once the item has been finalised, the actual sum is put into the contract price in the place of the provisional sum.

This exercise is carried out at final account stage, where the provisional sum is deducted from the contract sum and adds back the true value of the work into the contract sum. In other words, where provisional sums are expended, the Contract Price shall be adjusted accordingly.

In the instant case, it is not possible to adjust the Contract Price of RM9,614,898.15 as the RM2 million for the so-called 75 provisional sum was not included mathematically in the Contract Price.

This is the crucial found by the Learned Arbitrator which distinguishes this case from the general case envisaged by Question A: “Where a construction contract includes a provisional sum item whether the contractor can claim an extension of time if it carries out these provisional sum works?”

It therefore renders the answer to this general question academic as it is not applicable to the particular facts of this case. [102] Learned counsel for WSB wrapped up the 3-stage analysis as follows: Third stage – The learned Arbitrator’s Determination In light of the learned Arbitrator’s correct legal analysis that a true provisional sum is that which must be included mathematically in the original contract sum and the finding of fact made by the learned Arbitrator that in this case it was not, the learned Arbitrator correctly found and held that given the contract provides for a provisional sum for rock excavation of 25,000 m3 which was not 76 included mathematically in the Contract Sum, WSB is entitled to extension of time for rock excavation as a result of the discovery of rock. It is respectfully submitted that the learned Arbitrator’s finding is not wrong; it is reinforced by the fact the ABF had recognised rock excavation as a variation order. This is clearly an admission that this work was outside the original scope of contract. ABF is now estopped from claiming that rock excavation is within WSB’s obligation under the contract. Does Question A qualify as a “question of law” for the purposes of s. 42 AA 2005 in the light of the above analysis? [103] I cannot agree more with learned counsel for WSB that the law requires the Court to proceed on the basis of full and unqualified acceptance of the findings of facts of the learned Arbitrator in determining an application of s. 42 of the AA 2005 (see The Baleares, page 228, Exceljade, pages 52-53 and Perwira Bintang, page 637). [104] Learned counsel for WSB impressed upon this Court to exercise caution and discernment following the advice of the English Court of Appeal in The Baleares, page 228, (adopted by Exceljade and Perwira Bintang) which held: 77 “On an appeal the Court must decide any question of law arising from an award on the basis of a full and unqualified acceptance of the findings of fact of the arbitrators. It is irrelevant whether the Court considers those findings of fact to be right or wrong. It also does not matter how obvious a mistake by the arbitrators on issues of fact might be, or what the scale of the financial consequences of the mistake of fact might be. That is, of course, an unsurprising position. After all, the very reason why parties conclude an arbitration agreement is because they do not wish to litigate in the Courts. Parties who submit their disputes to arbitration bind themselves by agreement to honour the arbitrators’ award on the facts. The principle of party autonomy decrees that a Court ought never to question the arbitrator’s findings of facts”. ... ... This catalogue of challenges to arbitrators’ findings of fact points to the need for the Court to be constantly vigilant to ensure that attempts to question of fact as questions of law, are carefully identified and firmly discouraged. It is a matter for consideration whether objectively the present case involves yet another challenge to the arbitrators’ findings of fact despite Counsel’s disavowal of such intention.” (emphasis added) [105] I agree that there can only be one conclusion by applying the 3- stage test as laid down in The Chrysalis, page 507, Question A posed by ABF is clearly not a question of law justifying the intervention of this Court pursuant to section 42 AA. Whilst it is a question of law, it is not a question of law that is applicable on the particular set of facts as found 78 by the learned Arbitrator. As submitted above, this is an attempt to review the findings of fact made by the learned Arbitrator; a backdoor way to prevail upon this Court to disturb the findings of facts of the Arbitrator under the guise of a need to answer the question of law wrongly answered by the Arbitrator, thus yielding a wrong result. [106] I agree that this is not the purpose of a section 42 AA 2005 application and this Court should not entertain it (see The Baleares, page 228, Perwira Bintang, page 637 and Exceljade, pages 52-53). [107] Learned counsel for ABF had sought to challenge the findings of facts of the learned Arbitrator by seeking to distinguish between the words ‘provisional sum’ and ‘provisional quantity’. I agree with WSB that the distinction is irrelevant for the following reasons:

Firstly, the term used in the contract is “Provisional Sum”.

Secondly, the learned Arbitrator used both terms interchangeably.

Thirdly, whatever the term may be used it does not change the fact that the provisional sum or provisional quantity in the present contract is expressly provided to be outside the contract as opposed to the usual traditional lump sum contracts where the provisional sum is included in the computation of the lump sum itself. This is a finding of fact of the learned Arbitrator which cannot 79 be challenged by ABF now. This is supported in law where the decision of Midland Expressway, at page 236, held that a provisional sum is included mathematically in the contract sum. [108] Further Question A is a specific question that was posed to the learned Arbitrator and the learned Arbitrator’s determination of the specific question is final in line with the Absalom exception endorsed in Chain Cycle Sdn Bhd v Kerajaan Malaysia [2016] 1 CLJ 218 para 32, deriving its name from the House of Lords' case of FR Absalom Limited v Great Western (London) Garden Village Society [1933] AC 592, page 602. The Absalom exception precludes a party from challenging an arbitrator's decision on a matter specifically referred to him for decision as in a specific question of law referred for his decision. In Chain Cycle's case it was held that this exception should be preserved in a reference under s 42 AA 2005 so as to ensure that the reference is not transformed into a wholesale appeal against the arbitrator's decision. [109] Unless the Final Award is tainted with illegality, ABF cannot now refer the same question for this Court’s decision (see the decision of MMC Engineering Group Berhad & Anor v Wayss & Freytag (Malaysia) Sdn Bhd [2015] 10 MLJ 689; Sharikat Pemborong Pertanian & Perumahan v Federal Land Development Authority 80 [1971] 2 MLJ 210, page 211 and The Government of India v Cairns Energy India Pty Ltd & Anor [2011] 6 MLJ 441, pages 459-460). [110] Learned counsel for WSB invited this Court to do a plain comparison of Question A posed here and Issue 1 submitted in the arbitration: Question A “Where a construction contract includes a provisional sum item whether the contractor can claim an extension of time if it carries out these provisional sum works?” Issue No. 1 “Whether given that the contract provides a provisional sum for rock excavation of 25,000 m3, the Claimant (WSB) is entitled to an extension of time as a result of the discovery of rock?” [111] The similarity, shorn of its cosmetic differences, between Question A and Issue No. 1 could not have been more striking. They are essentially the same question, from a plain reading of the above comparison. The subtle difference introduced to suggest a substantially different question posed does not detract from the fact that Question A is one and the same with Issue 1 that had already been decided by the Arbitrator. 81 [112] Basically the dispute in respect of Question A and Issue No. 1 centres on the interpretation of Item AA of Price Schedule A, Section C of the ITB. The learned Arbitrator, at the very outset in determining the issue, acknowledged that the parties are at variance as to the interpretation of this provision. Merely because the learned Arbitrator had not favoured ABF’s interpretation of the provision relating to the provisional sum is not a ground for challenge. The dicta of the Federal Court in The Government of India v Cairns Energy India Pty Ltd & Anor [2011] 6 MLJ 441 at page 462 speaks loudly here: “We note that the arbitrators were faced with a question on the construction of a clause in an agreement. From the reading of it, no doubt it could be given two interpretations – one in favour of the appellant and one in favour of the respondents. For that very reason, the matter was sent for arbitration. The fact that the learned majority arbitrators took one approach in interpretation (which was in favour of the respondents) over the other cannot be a ground for challenge.” (emphasis added) [113] By reason that Issue No. 1 has already been specifically posed and determined by the learned Arbitrator, the decision of the learned Arbitrator ought to be respected and no interference is possible upon the ground that the decision upon the question of law is an erroneous one. 82 [114] In this regard, the oft-repeated analogy by Scrutton LJ in African & Eastern (Malaya) Ltd v White, Palmer & Co Ltd [1930] 36 LI L REP 113, which was adopted by our Federal Court in The Government of India v Cairns Energy India Pty Ltd & Anor [2011] 6 MLJ 441 at page 462 should resonate and rest with the parties: “... if you refer a matter expressly to the arbitrator and he makes an error of law you must take the consequences; you have gone to an arbitrator and if the arbitrator whom you choose makes a mistake in law that is your look out for choosing the wrong arbitrator: if you choose to go to Caesar you must take Caesar’s judgment ...” (emphasis added) Question B : Whether as a matter of law if the contract requires a party to inspect the site, can it derogate from its responsibilities by relying on the alleged representations made by other party? [115] WSB submitted that the provisions in the Contract that are alluded to in Question B relate to Clause 4.1 of ITB and Clause 3.10 of Specific Conditions of Contract which provide as follows: Clause 4.1 of the ITB “Tenderer shall be deemed to have fully understood the requirements of the WORK, and if necessary, tenderer shall visit, inspect and examine the worksite and its surroundings and shall satisfy himself fully before submitting his tender as to the form and nature of the WORK, materials, equipment and services necessary for the completion of the WORK and in general, shall himself 83 obtain all the necessary information as to the risks, contingencies and other circumstances which may affect his tender.” Clause 3.10 of the Specific Conditions of Contract (Gathering Data and Information) “CONTRACTOR shall be responsible to gather all data and information necessary to perform the WORK including but not limited to character of the WORK, location and SITE conditions, industry practice, laws and regulations, etc. Any information or document given or forwarded by ABF to CONTRACTOR shall not relieve CONTRACTOR of its obligations under the provisions of this CONTRACT. ABF gives no warranty for the information or document either as to the accuracy or sufficiency or as to how the same should be interpreted or otherwise, and CONTRACTOR shall make use of and interpret the same entirely on his own risk.” [116] Reliance was placed on the case of Morrison Knudsen International v Commonwealth of Australia [1972] 13 BLR 114 (“Morrison Knudsen”), where the High Court of Australia held that the contractors were entitled to rely on certain site information provided by the Employer at the time of tender despite the express disclaimer of liability. Barwick C.J. held at pages 120 and 121 that: “First, Cl. 3(1) of the general conditions “The Contractor shall be deemed ... ... to have informed himself as to the site and local conditions...” I do not read these words as limiting the “information” to that which the contractor has discovered by his own independent endeavours. In my opinion, he will relevantly 84 informed himself by acceptance of the basic information conveyed by the defendant. These words, in my opinion, do not afford an answer to the plaintiff’s claim. ... The defendant sought to protect itself against responsibility for any interpretation or conclusion drawn in regard to site conditions based on the information thus conveyed. To my mind the very form of this reservation suggests a recognition that the basic information is likely if not, indeed expected to be accepted for what it is ... ... The basic information in the site information document appears to have been the result of much highly technical effort ... ... It was information which the [contractors] had neither the time nor the opportunity to obtain for themselves. It might even be doubted whether they could be expected to obtain it by their own efforts as a potential or actual bidder.” [117] Further in the same decision of Morrison Knudsen, Gibbs J. observed at page 123 that: “In all the circumstances including particularly the shortness of the time available to the contractors for the submission of a tender the contractors had to the knowledge of the defendant no opportunity of conducting any or any adequate investigation into the nature of the soils at the site of the works and in particular the contractors had to the knowledge of the defendant had no opportunity of conducting investigations comparable in scope or extent with the investigations the subject of the site information. 85 The contractors, as the defendant knew or ought reasonably to have known, were in relation to information as the soils at Tullamarine relying upon the defendant to supply accurate information and as the defendant further well knew were intending to and did in fact rely upon the information supplied in the site information as a basis for the preparation by the contractors of Żestimate and tender for carrying out the works. It was reasonable in all the circumstances...for the contractors to accept and act upon the information contained in the site information.” (emphasis added) [118] The learned Arbitrator found as a matter of fact that the tender period was too short for WSB to carry out any meaningful soil investigation. It was not feasible or practical for all five tenderers be required to carry out soil investigations on the same locations on site. In practice this was not done. This Court agrees that the finding alone would be sufficient to answer Question B in the affirmative, and therefore in favour of WSB. Although couched as a question of law, it must be answered together with an appreciation of the associated facts as found by the learned Arbitrator. Provisions in a contract requiring a contractor to inspect the site and making the necessary investigations as a means to absolve the employer from liability for reliance on any information given to the Contractor can only be relied upon where the Contractor has been given reasonable time to make the necessary investigations 86 before putting its tender, which is a matter of fact (see Morrison Knudsen, pages 120, 121 and 123). [119] WSB furthered relied on the learned Arbitrator's findings of facts as follows:

ABF and/or Protek had misrepresented to WSB that the rock quantity on the Project Site was non-existent and/or negligible which amounted to a collateral warranty. This misrepresentation had induced WSB to enter into the Contract and also to commit itself to the original work programme of 12 months which was based upon a rock free environment.

WSB had discharged its obligations pursuant to Clause 4.1 of ITB and Clause 3.10 of Specific Conditions by requesting for the Soil Investigation Report from Wong King Ping.

There was no reason why WSB should not rely on this Soil Investigation Report provided by Wong King Ping especially when the boreholes were within the vicinity of the construction site and 2 of them were located within 10 or 20m from the existing BUS.

In any event ABF had waived its right to rely on the tender requirements which require WSB to assess the site conditions in light of the collateral warranty given by ABF and/or Protek. 87 [120] In the alternative, I agree with WSB's submission that it is trite law that the fact that statements are made in a pre-contractual relationship does not preclude the person to whom the statements are made from relying on the duty of care in the making of the statements by the person who is making them (see Esso Petroleum Co Ltd v Mardon [1975] 1 QB 819). At the same time, it is also settled that a representation made in the course of dealings for a contract for the very purpose of inducing the other party to act on it, may give rise to a collateral warranty (see Hartela Contractors Ltd v Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788) [121] Having regard to the particular set of facts as found by the learned Arbitrator and the position of law as submitted above, the learned Arbitrator had held that ABF had misrepresented and/or breached its collateral warranty to WSB as to the amount of rocks on site, notwithstanding Clause 4.1 of ITB and Clause 3.10 of Specific Conditions. There is no error of law as suggested by ABF in the present application. [122] This is clearly not an appropriate case for this Court to exercise its discretion to intervene pursuant to s. 42 of the AA 2005. ABF may be unhappy with such a finding of the Arbitrator but they must have realized 88 that they had agreed that his decision on facts are final and the Award is not subject to appeal. The limited grounds for setting aside or a reference of a question of law must not be transformed into a full blown appeal under the guise of correcting a wrong decision and so meeting the ends of justice. [123] In this respect, this Court agrees with WSB that the Final Award still stands by reason that a misrepresentation and/or breach of collateral contract operates outside and/or separate and/or independent of the Contract between the parties. Hence, it is not caught by Clause 4.1 of ITB and Clause 3.10 of Specific Conditions. Such a finding is not in conflict with any principle of law and is in fact an exception to the parol evidence rule. In Tan Swee Hoe Co Ltd v Ali Hussain Bros [1980] 2 MLJ 16, the Federal Court, held at page 18 (per Raja Azlan Shah CJ) as follows: “Although it is trite law that parol evidence is not admissible to add to, vary or contradict a written agreement, a technical way of overcoming the rule is by invoking the doctrine of collateral contract or collateral warranty. Chitty on Contracts (24th ed) (paragraph 673) put it this way: “An assurance given in the course of negotiation may therefore give rise to a contractual obligation, provided that an intention to be bound can be shown. The rules of evidence, however, frequently prevent such an assurance from being incorporated 89 as part of a subsequent written agreement, since extrinsic evidence is as a general rule not admissible to vary, or add to the terms of a written contract. As a result, the courts have been prepared in some circumstances to treat the assurance as a separate contract, collateral to the main transaction. In particular, they will do so where one party refuses to enter into the contract unless the other gives him an assurance on a certain point.” In our view there is a growing body of authority which supports the proposition that a collateral agreement can exist side by side with the main agreement which it contradicts ... It is collateral to the main contract, but each has an independent existence, and they do not differ in respect of their possessing to the full the character and status of a contract ... We think Lord Denning MR summarised it in Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd: “Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a contract for the very purpose of inducing the other party to act on it, and it actually induces him to act on it by entering into the contract, that is prima facie ground for inferring that the representation was intended as a warranty. It is not necessary to speak of it as being collateral. Suffice that the representation was intended to be acted on and was in fact acted on.” (emphasis added) [124] See also Hartela Contractors Ltd v Hartecon J Sdn Bhd & Anor [1999] 2 CLJ 788, at pages 798-799, per Gopal Sri Ram JCA (as he then was). At all material times, ABF itself had recognised that rock 90 excavation is a variation order. This was found as a fact by the Arbitrator. With a variation order, this has time and cost implications. Article 2.2 (b) of the Conditions of Contract inter alia provides: “On receipt of any written notice requiring the variation in the Work which may, in the opinion of CONTRACTOR, involve a variation in the CONTRACT PRICE or the COMPLETION DATE, CONTRACTOR shall, before proceeding with the WORK, advise ABF to that effect by submitting Variation Proposal. If in the opinion of ABF that the submissions contained in the Variation Proposal are correct, ABF will issue a VARIATION ORDER to CONTRACTOR which shall contain details of the change and the resulting changes to the CONTRACT PRICE and COMPLETION DATE. Such VARIATION ORDER shall be deemed to form part of the CONTRACT.” (emphasis added) [125] The learned Arbitrator had found that the excavation of hard rocks and the failure of ABF to issue remedial instructions to deal with the slope failures are events entitling WSB to additional time and costs. Therefore WSB is entitled to time and cost until the occurrence of the slope failures (which the Arbitrator found to be the operative act of prevention until the very end). Consequently, the fact that WSB is entitled to time and cost will remain regardless of whether Question 2 or the issue of entire agreement is answered in favour of ABF. This Court further agreed that the application ought to be dismissed by reason of 91 the failure to comply with s. 42(1A) AA 2005 on how the question of law substantially affects the rights of one or more of the parties. [126] Learned counsel Mr Sanjay Mohan also tried to prevail upon the Court that there can be no finding of a misrepresentation in the face of an "entire agreement" clause and as such the finding of fact is perverse. However that was not the question of law that was specifically posed for the Court to intervene and new questions of law should not be allowed to be rehatched or for that matter, rehashed! [127] In any event, as a matter of law, an entire agreement clause does not preclude the liability for misrepresentation as was clarified in Inntrepreneur Pub Co v East Crown Ltd [2000] 2 Lloyds Rep 611 at page 614, where Lightman J. held: “An entire agreement clause does not preclude a claim for misrepresentation, for the denial of contractual force to a statement cannot affect the status of a statement as a misrepresentation.” (emphasis added) [128] Further, it is settled law that an oral representation which is in conflict with the printed terms of the contract must be given an overriding effect over the terms of the Contract (Tan Chong & Sons Motor Co (Sdn) Bhd v Alan McKnight [1983] 1 MLJ 220 (FC) at page 230). 92 [129] Even if one were to follow the test endorsed by the Court of Appeal in SDA Architects (sued as a firm) v Metro Millennium Sdn Bhd [2014] 2 MLJ 627 which held that the error of law on the face of the award should still be adopted, the result would still be the same. Her Ladyship, Aziah Ali JCA expressed thus at page 648 as follows: “[37] The next issue to be considered is whether on the face of the award there is an error of law committed by the arbitrator as contended by the respondent.... ... [39] ... I find that on the face of the award there is no ground to support the respondent’s contention that the arbitrator has committed an error of law.....” (emphasis added) [130] At paragraph 51 of SDA Architects, Hamid Sultan JCA further held that “the error of law on the face of the award must be one that is patent and obvious as to render the award manifestly unlawful and unconscionable to subsist…” (emphasis added), thereby justifying it to be set aside. This Court finds that nothing close to that has been shown in the case here. [131] Having held that for this so-called question of law, it has not been shown that it is a question of law arising out of the award which question of law must necessarily arise from the substratum of facts as established by the learned Arbitrator, there is then no necessity to consider the next 93 requirement which is whether the question posed will substantially affect the parties' rights. [132] The suggestion that there are no damages for innocent misrepresentation does not answer the case of breach of collateral warranty on the same facts (see Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788, at pages 798-799, per Gopal Sri Ram JCA adopting Lord Denning’s decision in Esso Petroleum Co Ltd v Mardon [1976] QB 801). [133] This Court is more than satisfied that the application to set aside the Award under s 42 AA 2005 based on Question B must fail. Question C: Whether pursuant to the Arbitration Act 1952, the arbitrator is correct in law to grant the Respondent pre-award interest amounting to RM10,975,407.39? Question D: Whether if the Arbitration Act 1952 is silent on the issue of the granting of pre-award interest, does the arbitrator has the powers to grant pre-award interest? [134] As the issues posed in Question C and Question D are inextricably linked to each other, both Questions shall be considered together. Whilst the initial stand taken by learned counsel for ABF, Mr Sanjay 94 Mohan, was that the AA 1952 applies as the arbitration was commenced before the coming into force of the AA 2005, he had sought to argue subsequently that it is the AA 2005 that was applicable to the Award in spite of the fact that the questions posed were based on the AA 1952. That would be tantamount to shifting the goal post and in any event there is more than cogent argument that an arbitration that had been commenced under the AA 1952 continues under the same Act irrespective of the fact that a subsequent AA 2005 had subsequently come into force during the continuation of the arbitration leading to the handing down of the Award. [135] In any event, the submissions by ABF that the applicable Act is the AA 2005 in respect of the granting of interest is misconceived and plainly wrong. Section 51(2) AA 2005 provides: “Where the arbitral proceedings were commenced before the coming into operation of this Act, the law governing the arbitration agreement and the arbitral proceedings shall be the law which would have applied as if this Act had not been enacted”. (emphasis added) [136] That law is the AA 1952. No amount of legal gymnastics could alter the plain reading of the clear provision of s 51(2) AA 2005 with respect to the fact that the AA 1952 continues to apply to an arbitration 95 commenced under the AA 1952 though subsequently the AA 2005 had come into force. [137] The Court of Appeal's decision in Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang (Civil Appeal No: W-02 (NCC) (A)-2672-12/2013) ("Far East") has no relevance to the present application as the decision in Far East concerns the interpretation of the arbitral tribunal’s power to grant pre-award interest under s. 33(6) of the AA 2005 whereas the relevant provision here is s. 21 of the AA 1952. This is a key distinguishing factor between the present case and Far East where the Court of Appeal in answer to a question posed in an appeal from a s 42 AA 2005 reference, had held that an Arbitrator has no power to grant pre-award interest under s 33(6) AA 2005 [138] S 21 of the AA 1952 provides: “Interest on awards A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest as from the date of the award at the same rate as a judgment debt.” (emphasis added) [139] The fact that an Arbitrator has the power to grant pre-award interest under the AA 1952 has been firmly established by a series of 96 consistent cases as follows: Leong Kum Whay v QBE Insurance (M) Sdn Bhd & Ors [2006] 1 MLJ 710, Lian Hup Manufacturing Co Sdn Bhd v Unitata Berhad [1994] 2 MLJ 51, Raja Lope & Tan Co v Malayan Flour Mills Bhd [2000] 6 MLJ 228 and Shamelin Holdings Sdn Bhd v Mohd Anhar bin Ahmar (trading as ABA Architect) [2006] 6 MLJ 135. [140] It needs to be appreciated that an Arbitrator’s power to grant pre-award interest is derived from contract, i.e. the submission of the dispute by the parties to the arbitrator (which impliedly gave the arbitrator the same powers as if the dispute is heard in court), and not from the statute. The fact that this position is well settled is underscored by cases from the United Kingdom, Australia, Singapore and Malaysia as demonstrated by learned counsel Mr Rajendra Navaratnam, for WSB. Clearly the contention that the AA 1952 is silent on pre-award interest holds no water. [141] The U.K. position is exemplified by the case of Chandris v Isbrandtsen Moller Co Inc [1950] All ER 618 (“Chandris”), at page 623, where Tucker L.J held as follows: “I cannot see why any distinction should be drawn between the duty of an arbitrator to give effect to such statutes as the Statute of Limitations and his jurisdiction in his discretion to award interest. 97 An award of interest is only a part of the damages recoverable, and, adapting to the facts of this case the language of LORD SALVESEN in the case to which I have just referred – language which was approved by LORD MAUGHAM – it would read as follows: “ Although the Law Reform (Miscellaneous Provisions) Act, 1934, does not in terms apply to arbitrations, I think that in mercantile references of the kind in question it is an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract, and that every right and discretionary remedy given to a court of law can be exercised by him.” To that there are certain well-known exceptions, such as the right to grant an injunction, which stand on a different footing. One of the reasons why an arbitrator cannot give an injunction is that he has no power to enforce it, but such an objection does not apply to an award of interest. … Counsel for the charterers argued that that judgment was based on the assumption that it was the Civil Procedure Act, 1833, which gave the arbitrator his power to award interest and that, once that Act was repealed, all such powers had gone, and, unless the arbitrator had been given fresh powers, he had none. I think, however, that the real basis of Edwards v Great Western Ry Co (2) was that the arbitrator derived his powers, not from the Act of 1833, but from the submission to him which necessarily gave him the “implied powers” referred to in the language of LORD SALVESEN which I have just quoted, and I see no reason why, since the Act of 1934, an arbitrator should not be deemed impliedly to have the same powers. Therefore, with 98 diffidence, having regard to the view expressed by the Divisional Court on this matter, I have come to the conclusion that in such a case as the present the arbitrator has power to award interest, and, accordingly, to that extent, I think this appeal should succeed and the Podar case (1) be overruled." (emphasis added) [142] Australia takes the same consistent approach. The High Court of Australia in the case of Government Insurance Office (NSW) v Atkinson-Leighton Joint Venture (1980) 31 ALR 193, observed through Justice Stephen at page 220 as follows: “The principle to be extracted from this line of authority is that, subject to such qualifications as relevant statute law may require, an arbitrator may award interest where interest would have been recoverable had the matter been determined in a court of law. What lies behind that principle is that arbitrators must determine disputes according to the law of the land… a claimant should be able to obtain from arbitrators just such rights and remedies as would have been available to him were he to sue in a court of law of appropriate jurisdiction. As Russell on Arbitration (19th ed, 1979) puts it at 356, speaking of an arbitrator’s power to award interest up to the date of his award, “it was always considered that he had power to do so, by virtue of his implied authority to follow the ordinary rules of law.” (emphasis added) 99 [143] Across the causeway In Singapore, Lai Kew Chai J in Ahong Construction (S) Pte Ltd v United Boulevard Pte Ltd [1995] 1 SLR 548 (p. 556 to 557), explained as follows: “With regard to the specific exercise of awarding interest in arbitration, it is the law that generally interest should be awarded on a successful claim. An arbitrator who awards a sum of money but fails to award interest to compensate the successful claimant accordingly has prima facie misconducted himself in the technical sense of the word:

Panchaud Freres SA v Pagnan and Fratelli [1974] 1 Lloyd’ at p Lord Denning MR (as he then was) said: “[i]n a commercial transaction if the plaintiff has been out of his money for a period, the usual order is that the defendant should pay interest for the time for which the sum has been outstanding. No exception should be made except for a good reason. An arbitrator may decline to award any interest or award interest at a lower rate or for a shorter period but he must have reasonable grounds for doing so and he should set out these reasonable grounds in his award.” (emphasis added) [144] Back home, the Chandris reasoning was adopted in the Malaysian context in Lian Hup Manufacturing Co Sdn Bhd v Unitata Bhd [1994] 2 MLJ 51, at page 54, where it was held: “According to Chandris case, the power of an arbitrator to award interest was derived from the submission to him which impliedly gave him power to decide all matters of difference according to existing law of contract, exercising every right 100 and discretionary remedy given to a court of law. The court decided that the arbitrator had the power to award interest. In the present case, the parties have agreed in the arbitration clause in the contract … that the construction, validity and performance be governed by Malaysian law. Under s. 11 of the Civil Law Act 1956, the court has the discretionary power to award interest for the recovery of any debt or damages. See Evergrip Prestressing Sdn Bhd v Ken Construction & Trading Sdn Bhd. In my view, the arbitrator in the present case has the same power as that of the court to award interest at such rate as he thinks fit. Since it was within the discretionary power of the arbitrator to award interest in this case, the court would not interfere with the exercise of his discretionary power.” [145] The same conclusion on the power of an Arbitrator to grant pre-award interest was reached by Faiza Tamby Chik J in Raja Lope & Tan Co v Malayan Flour Mills Bhd [2000] 6 MLJ 228, p. 238-239 and Raus Sharif J (now PCA) in Shamelin Holdings Sdn Bhd v Mohd Anhar bin Ahmad (trading as ABA Architect) [2006] 6 MLJ 135, p 140-141. In Leong Kum Whay v QBE Insurance (M) Sdn Bhd & Ors [2006] 1 MLJ 710 (CA), the Court of Appeal held at p. 724-725: “[32] In the first place it is well settled that an arbitrator, in the absence of a specific clause in the agreement, has power to award interest (see Lian Hup Manufacturing Co Sdn Bhd v Unitata Bhd [1994] 2 MLJ 51; Executive Engineer v DN Senapati AIR 1980 Orissa 74). In the second place, the general rule in a 101 claim for a debt (and this was a debt owed by the insurer to the appellant) is that interest must run from the date on which the debt became due and payable (see Murtadza bin Mohamed Hassan v Chong Swee Pian [1980] 1 MLJ 216). In this case, it should have been from the date of the accident. Because that it when the debt accrued.” (emphasis added) [146] This Court agrees with learned counsel for WSB that the above cases were decided under the AA1952, which is the relevant Act applicable to the present case. Consequently, the Arbitrator has the power to grant the pre-award interest. [147] There was also the vague allusion by ABF that it should not be penalised because of the delay of the Arbitrator and that it has suffered a prejudice because of the interest charges from the reasonable date of completion from 31 January 2003 to date of realization. I agree with WSB that ABF had the use of the money for so long that it did not have to pay out because an award has not been delivered and accordingly the imposition of interest is not unfair. The monies not paid out of course could be reinvested in other projects and ventures by ABF whereas here it is WSB that have been kept out of the monies. The dicta of the Singapore Court of Appeal in Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 1 SLR (R) 510 (CA) at paragraph 59 that “so long as the award was not rendered the appellants had the use 102 of the money and thus the award of interest was not unjustified” would hold true here. [148] With respect to the quantum of damages under the head of Financial Charges of RM 4,631,647.37, learned counsel ABF Mr Sanjay Mohan, was heard as having argued that the learned Arbitrator's finding was not supported by evidence. Matters of sufficiency of evidence is not a permissible argument under a s 42 reference as matters of facts and hence quantum is a matter purely within the province of the Arbitrator of which he is the sole master of facts. [149] In any event this Court is satisfied that there is evidential basis to support this finding of the learned Arbitrator. The sum of RM4,631,647.37 awarded by the learned Arbitrator is derived from:

Overdraft Interest for year 2003 from Audited Accounts 2003, when the claims ought to have been paid – RM620,824.00 (see Page 53 of Exhibit “MHP-6”, Defendant’s Supplemental

Financial Cost arising from invoices that remains unpaid – RM 4,010,823.37. - This claim is for financial cost and loss of financial capacity arising from the unpaid invoices/claims that which was submitted to the Respondent and undisputed 103 (see Page 53(1) to 63 Exhibit “MHP-7”, Defendant’s Supplemental Affidavit). - Computation can be found at Page 21(H) and 21(K) Exhibit “MHP-5”, Defendant’s Supplemental Affidavit [150] This Court accepts as a sound proposition of law that interest may be claimed as a head of damages especially when one has been kept out of one's monies or where one has to incur charges mainly in the form of interest charged for financing. If authorities are needed one may refer to Hungerfords v Walker 84 ALR 119, where the High Court of Australia held at p 130 as follows: “30. The cost of borrowing money to replace money paid away or withheld, in consequence of the defendant’s breach of contract or negligence, is directly related to the wrong and is not too remote in the sense in which common law regarded the loss attributable to late payment of damages as being too remote. We reach this conclusion more readily, knowing that legal and economic thinking that about the remoteness of financial and economic loss have developed markedly in recent times. Likewise, opportunity cost should not be considered as being too remote when money is paid away or withheld.

Once it is accepted that the cost of borrowing money to replace money paid away or withheld is not too remote, it is pointless to insist on a distinction between the award of damages for loss of the use of money in the case of a liquidated claim and the award of 104 such interest in an unliquidated claim. The award of damages in accordance with Hadley v. Baxendale is unrelated to, and free from, any requirement that there is, or should be, any "wrongful" withholding of money, be it a debt or damages.

There can be no objection to the recovery of the cost of borrowing as consequential loss by reference to the notion that the loss is one which arises after the plaintiff's cause of action accrues or becomes complete. Such a notion is by no means an absolute bar to recovery for loss arising after that date. It was acknowledged by this Court in Johnson v. Perez (unreported, 6 December 1988) that the rule that damages for breach of contract or tort are assessed at the date of breach or when the cause of action arises is not universal. Wenham v. Ella (1972) 127 CLR 454 is a striking illustration of a plaintiff recovering loss which accrued after his cause of action became complete. There the plaintiff recovered damages for the loss of income he sustained by reason of the defendant's breach of contract for refusing to transfer income-producing land pursuant to the contract between the parties, the loss being within the contemplation of the parties: see pp 461, 463, 467, 472. In that case the Court took account of the fact that the plaintiff had paid the entire consideration payable by him as purchaser and of the fact that the defendant had had the use of the plaintiff's money. Menzies J. noted (at p 463): "In the interval between the breach and judgment, the purchaser would be out of pocket, and the vendor in pocket, by the amount of the return from the land." The significance of the decision is that by reason of the breach the plaintiff lost income after breach and damages were awarded for that head of loss. 105 Gibbs J. observed (at p 472) that it was immaterial whether the damages came within the first or second limb of Hadley v. Baxendale "or indeed whether both are applicable". There was no suggestion that the plaintiff's loss was to be attributed to the late payment of damages." [151] Likewise in Sempra Metals Ltd v Inland Revenue Commissioners and Another [2008] 1 AC 561, the House of Lords held at page 602: “100. For these reasons I consider the court has a common law jurisdiction to award interest, simple and compound, as damages on claims for non-payment of debts as well as on other claims for breach of contract and in tort.” (emphasis added) [152] However care must be taken to ensure that what is essentially damages derived from interest calculation does not on top of that carry another interest element again as that would be a charge of interest upon interest. [153] Mr Sanjay Mohan pointed out quite correctly that both the above sums which together give the Financial Charges of RM4,631,647.37 were already carrying interest up to 30 November 2006 as can be seen at at p 21(K) of Enclosure 29a which is a statement of account for RM 4,010,823.37 showing the principal and interest element (represented by 106 the debit notes) and the dates the interest was charged until 30 November 2006. [154] The learned Arbitrator had awarded interest at the rate of 8% per annum simple interest to run from 31 January 2003 which is the date the learned Arbitrator found as the reasonable time for WSB to complete the works at p 502 of the Award. [155] There is merit in ABF's submission that there should not have been interest upon interest awarded on the Financial Charges that had already had the interest element computed into it from 31 January 2003 to 30 November 2006. The charging of double interest is prohibited under s 11(a) Civil Law Act 1956 which provides as follows: "In any proceedings tried in any Court for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment: Provided that nothing in this section -

shall authorize the giving of interest upon interest;" (emphasis added) 107 [156] There was therefore an error in law in awarding interest upon interest from 31 March 2003 to 30 November 2006. Interest at 8% per annum simple interest should run on the Financial Charges of RM4,631,647.37 from 1 December 2006 to 1 August 2012 and thereafter at 5% per annum simple interest until actual realization. Pronouncement [157] In a reference under s 42 on a question of law, unlike a setting aside under s 37 AA 2005, this Court is permitted to vary part of an Award as may be affected by the error of law that has been proved to have applied to the calculation of interest here. To allow double interest to be charged would be to perpetuate an injustice on ABF and would be unconscionable in the circumstances of the case as interest on the Debit Notes was already charged at 1.5% per month on all overdue accounts. This is an error of law that satisfies that requirement under s 42 AA 2005 wherein this Court would be constrained to excised the part of the award of interest affected and to leave intact the unaffected part. [158] I had therefore ordered that the interest of 8% per annum simple interest on the Financial Charges be varied such that interest at 8% per annum simple interest should only run on the Financial Charges of RM4,631,647.37 from 1 December 2006 to 1 August 2012 and 108 thereafter at 5% per annum simple interest until actual realization and not from 31 March 2003. I also allowed costs of RM10,000.00 to ABF. [159] To recapitulate, I had earlier dismissed ABF's application to set aside the Award under the s 37 AA 2005 application and after hearing the parties on costs, I ordered costs of RM50,000.00 to be paid by ABF to WSB. Dated: 18 July 2016. sgd Y.A. TUAN LEE SWEE SENG Judge Construction Court Kuala Lumpur For the Plaintiff : Sanjay Mohan and Adam Lee : (Messrs Mohanadass Partnership) For the Defendant : Rajendra Navaratnam and Mak Hon Pan (Messrs Azman, Davidson & Co.) Date of Decision : 9 May 2016.