Blocklink (M) Sdn Bhd v Tenaga Nasional Berhad (WA-24C-233-11/2020)

The Defendant had, vide encl. 6, applied for a stay of the court proceedings pending reference to adjudication and subsequently, arbitration (‘Stay Application’) pursuant to s 10 of the Arbitration Act 2 2005 [Act 646] (‘AA 2005’) and/ or the inherent jurisdiction of the Court pursuant to O. 92, r. 4 of the Rules of Court (‘RoC 2012’).

After having considered the cause papers and submissions by the parties, this Court had allowed the Defendant’s application with costs of RM5,000.00, subject to allocatur.

These are my full grounds of judgment for the said decision.

The cause papers which are relevant to the Stay Application are as follows:

the Plaintiff’s Originating Summons (‘O.S.’) dated 19.11.2020 (encl. 1); 3

the Affidavit In Support (‘AIS’) affirmed by Mohd. Nasir @ Onn Bin Nasuha, the Plaintiff’s Director on 19.11.2020 (encls. 2 and 3);

the Defendant’s Stay Application (encl. 6);

the AIS affirmed by Sharifah Nurina Permatasari, the Defendant’s Contract Disputes Manager, Legal Services Department on 15.12.2020 (encls. 7 - 16);

the Plaintiff’s Affidavit In Reply (‘AIR’) affirmed by Mohd. Nasir on 30.12.2020 (encl. 17); and

the AIR affirmed by Noor Hidayah Binti Yahaya, the Defendant’s Contract Disputes Senior Executive, Legal Services Department on 11.1.2021 (encl. 19). [5] The Plaintiff had also filed a Supplementary AIR affirmed by Mohd. Nasir on 18.1.2021 (encl. 20), however, the Defendant objected to the 4 same for the reason that during the case management on 18.12.2020, the Deputy Registrar had given directions regarding the Stay Application and he had expressly directed that there shall be no further affidavits exchanged and filed after 14.1.2021. In such circumstances, the Defendant urged the Court to disregard encl. 20. Nevertheless, in the event that the Court was inclined to consider encl. 20, the Defendant had filed a Further AIR affirmed by Noor Hidayah on 26.1.2021 (encl. 21). [6] At the start of the hearing of the Stay Application, I had enquired as to whether the Defendant still maintained its objection to encl. 20, to which Mr. Rodney Gomez who appeared for the Defendant replied that the events are superseded as the Defendant has since filed encl. 21. [7] Whilst that may be so, I had decided to disregard encl. 20 because it was filed without leave of the Court, a conduct which regretfully is quite rampant (see the observations made by this Court in para 32 in the case of ER Mekatron Manufacturing Sdn Bhd v Dataran Satria (M) Sdn 5 Bhd [2021] MLJU 2392). Hence, in the course of my deliberation, I did not consider encls. 20 and 21. Salient Facts [8] By the following Letters of Acceptance, the Defendant had awarded to the Plaintiff the respective Design & Build contracts as tabulated below. For ease of reference, the table also includes the particulars as to the Instruction To Commence Works, duration of the contracts, the completion date, date of the Plaintiff’s application for extension of time (‘EoT’), the liquidated and ascertained damages (‘LAD’) imposed by the Defendant and the date of termination of the contracts by the Defendant. 6 LETTER ACCEPT-ANCE & CON-TRACT NO. CONTRACT CONTRACT PRICE (RM) AGREE-MENT ARAHAN MULA KERJA, DURA-TION & COMPLE-TION APPLI-CATION FOR EoT LAD (RM) & DATE OF TERMI-NATION OF CON-TRACT 1 8 Oct. 2018 1950/2018 Kerja-Kerja Merekabentuk, Membina Dan Menyiapkan Pembinaan Pencawang Pembahagian Utama Zon Selatan Pakej 2 Untuk Tetuan Tenaga Nasional Berhad (Mainhead A - PPU Miel Pedas) (‘Miel Pedas Contract’) 2,373,272.00 Plaintiff’s signature dated 28 June 2018 Defen-dant’s signature dated 9 Nov. 2018 Adden-dum No. 1 dated 9 Nov. 2018 26 Nov. 2018 450 days 18 Feb. 2020 14 Oct. 2019 355,990.80

22.4.2020 2 8 Oct. 2018 1951/2018 Kerja-Kerja Merekabentuk, Membina Dan Menyiapkan Pembinaan 2,136,636.00 Plaintiff’s signature dated 28 June 2018 26 Nov. 2018 450 days 12 Jan. 2020 320,495.40

22.4.2020 7 Pencawang Pembahagian Utama Zon Selatan Pakej 2 Untuk Tetuan Tenaga Nasional Berhad (Mainhead B - PPU Nada Alam) (‘Nada Alam Contract’) Defen-dant’s signature dated 9 Nov. 2018 Adden-dum No. 1 dated 9 Nov. 2018 18 Feb. 2020 3 17 Jan. 2019 760/2019 Kerja-Kerja Rehab Pencawang Pembahagian Utama 2X15MVA Kok Seraya, Tumpat, Kelantan - (Mainhead C) (‘Kok Seraya Contract’) 2,136,636.00 Plaintiff’s signature dated 6 Nov. 2018 Defen-dant’s signature dated 12 Feb. 2019 18 March 2019 365 days 16 March 2020 26 Feb. 2020 142,200.00 15 May 2020 4 17 Jan. 2019 Kerja-Kerja Rehab Pencawang 1,700,000.00 Plaintiff’s signature 18 March 2019 26 Feb. 2020 153,000.00 8 761/2019 Pembahagian Utama 2X15MVA Kota Bharu Central, Kelantan - (Mainhead B) (‘KB Central Contract’) dated 6 Nov. 2018 Defen-dant’s signature dated 13 Feb. 2019 365 days 16 March 2020 15 May 2020 5 10 Oct. 2018 1961/2018 Kerja-Kerja Merekabentuk, Membina Dan Menyiapkan Pembinaan Pencawang Pembahagian Utama Utara Pakej 2 Untuk Tetuan Tenaga Nasional Berhad (Mainhead C - PPU IKS Simpang Ampat) (‘Simpang Ampat Contract’) 2,118,353.00 Plaintiff’s signature dated 28 June 2018 -

18.8.2020 9 6 10 Oct. 2018 1959/2018 Kerja-Kerja Merekabentuk, Membina Dan Menyiapkan Pembinaan Pencawang Pembahagian Utama Zon Utara Pakej 2 Untuk Tetuan Tenaga Nasional Berhad - Mainhead A - PPU Pangkor 4,143,437.00 Plaintiff’s signature dated 28 June 2018 7 10 Oct. 2018 1960/2018 Kerja-Kerja Merekabentuk, Membina Dan Menyiapkan Pembinaan Pencawang Pembahagian Utama Zon Utara Pakej 2 for Tenaga Nasional Berhad - Mainhead B - PPU UPSI 2,205,246.00 Plaintiff’s signature dated 28 June 2018 10 The Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract, KB Central Contract and Simpang Ampat Contract shall hereinafter collectively be referred to as the ‘Contracts’. [9] The Small Medium Enterprise Development Bank Malaysia Berhad (‘SME Bank’) had granted a financing facility to the Plaintiff in the sum of RM9.3 million for purposes of the seven contracts as listed in the table. [10] The Plaintiff claimed that it has prepared and submitted the engineering plans and drawings to the local authorities for approval for the PPU in relation to the Miel Pedas Contract, Nada Alam Contract, Pangkor Contract and UPSI Contract whilst the engineering plans and drawings for the other three PPU have yet to be executed by the Defendant. [11] Subsequently, the parties became embroiled in a dispute over the delay in the completion of the works, the non-approval by the 11 Defendant of the Plaintiff’s applications for EoT and the imposition of LAD and ultimately, the termination of the Contracts by the Defendant. [12] The Plaintiff hurled several allegations against the Defendant, including that –

there are flaws, irregularities and non-uniformity in decision making and management of all the contracts by the Defendant, in particular with regards to the power and/ or the rights of its signatories to approve the EoT applied for by the Plaintiff and this has caused prejudice and severe damage to the Plaintiff. This was illustrated by way of the Defendant’s non-approval of the Plaintiff’s application for EoT No. 1 for the Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract and KB Central Contract as compared with the approval of EoT No.1 for the UPSI Contract and Pangkor Contract despite there being no written application by the Plaintiff in respect of the Pangkor Contract; and 12

the denial of the Plaintiff’s rights to obtain EoT No. 1 shows that there are miscommunications and breakdowns in the notification process and a “misuse and abuse of authority” by the Defendant towards the Plaintiff as the Defendant did not practise the stipulated Standard Operating Procedure (‘SOP’). The inference is that there existed “indirectly pre-planned failures” towards the Plaintiff and the Defendant’s conduct amounts to “an obstruction of justice towards the Plaintiff” and an “abuse of fundamental liberties and livelihood as enshrined in the Federal Constitution”. [13] Being greatly disappointed with the Defendant’s purported negligence and abuse of powers and authority in administrating the Contracts, the Plaintiff then filed the O.S. on 19.11.2020 seeking the following relief:

a declaration that there was negligence and administrative miscarriage and mismanagement on the Defendant's part in denying the Plaintiff's right to EoT No. 1 for the Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract and KB Central Contract [see prayer (b)]; 13

a declaration that denying the Plaintiff’s right to EoT No. 1 for the Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract and KB Central Contract without valid and solid reasons is an administrative miscarriage, misconduct and misrepresentation on the part of the Defendant [see prayer (c)];

a declaration that denying the Plaintiff’s right to EoT No. 1 for the Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract and KB Central Contract is a “misused and abused authorities” by the Defendant towards the Plaintiff when the former did not practise the SOP and such management shows an obstruction of justice towards the Plaintiff [see prayer (d)];

a declaration that the Defendant has breached the terms of the contract whereby the termination of the Simpang Ampat Contract was not in accordance with the law and is therefore invalid [see prayer (e)]; 14

a declaration that there is a violation of social justice in the contractual, operational and financial management on the part of the Defendant towards the Plaintiff under the Federal Constitution [see prayer (f)];

damages in the sum of RM9,908,261.00 for the Contracts [see prayer (g)];

payment for the unpaid interim claims in the sum of RM1,259,477.84 for the Miel Pedas Contract, Nada Alam Contract, Kok Seraya Contract and KB Central Contract [see prayer (h)];

reimbursement of the performance bonds for the Contracts in the sum of RM3,467,891.35 or to be assessed [see prayer (i)]; 15

loss of estimated profits at the rate of 35% of the overall contract sum for the Contracts in the sum of RM3,467,891.35 or to be assessed [see prayer (j)];

loss of expenses including the professional intellectual properties to develop the Preliminary Engineering Design and Detailed Engineering Design in the sum of RM1,433,692.09 or to be assessed [see prayer (k)];

damages for tarnishing the good name and reputation of the Plaintiff in the eyes of SME Bank in the sum of RM418,500.00 calculated at the rate of 4.5% from RM9.3 million which is the amount of financing offered by SME Bank [see prayer (l)];

costs of the proceedings on client – solicitor basis [see prayer

(m)]; and 16

any other relief which the court deems fit and just to be given [see prayer (n)]. [14] The Defendant contended that the Contracts refer to the General Conditions in the Short Form of Contract First Edition 1999 issued by the International Federation of Consulting Engineers (the French acronym is ‘FIDIC’) as the General Conditions of the Contracts (‘GCoC’) and that the parties had agreed to the dispute resolution provision as per Clause 15 in the GCoC. [15] Therefore, the Defendant filed the Stay Application for a stay of proceedings pending reference to adjudication and subsequently, arbitration pursuant to the dispute resolution clause under the Contracts. 17 The Defendant’s Contentions [16] The Defendant submitted that the Stay Application falls within the ambit of s 10 AA 2005 and should be allowed on the following grounds:

In determining an application made under sub-s 10(1) AA 2005, the Court is not required to delve into the details of the dispute. The only relevant consideration is whether there is a valid arbitration agreement since the question as to whether there is a dispute in existence or otherwise is an issue to be decided before the arbitral tribunal.

All the disputes and all the relief sought by the Plaintiff arise from the Contracts entered into between the parties. Each of the Contracts have stated that the GCoC shall be the general conditions in the Short Form of Contract First Edition 1999 issued by FIDIC (‘FIDIC Short Form Contracts’). The arbitration agreement set out in Clause 15 of the GCoC has thus been 18 incorporated between the parties to the Contracts by the clear and unambiguous reference to the FIDIC Short Form Contracts in each of the Contracts entered into.

The co-relation between the relief sought by the Plaintiff in the O.S. and the specific Contracts was shown in Appendix A to the Defendant’s written submissions. It was contended that the Plaintiff’s claims in the suit stems from its claim for the purported entitlement for EoT under the Contracts as well as challenging the Defendant’s termination of the Contracts. The wording of Clause 15 of the GCoC is wide enough to cover all the issues raised by the Plaintiff and the termination of the Contracts does not negate the binding nature of the dispute resolution clauses that have been contractually agreed to between both parties. Hence, the Plaintiff ought to have complied with these clauses and by filing the suit, the Plaintiff has breached the same and this tantamount to an abuse of the process of the court. 19

The Defendant is entitled to bring substantial claims against the Plaintiff under the Contracts and these should be resolved in accordance with the dispute resolution clauses under each of the Contracts as the Plaintiff’s claims are in relation to five distinct matters. Due to the adjudication and arbitration agreement between the parties, this Court does not have the jurisdiction to determine the disputes arising from the Contracts. The Plaintiff’s Contentions [17] The crux of the Plaintiff’s contentions in opposing the Stay Application are summarised below:

The Defendant’s application is not sustainable because there is no provision in the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) which provides for a stay of court proceedings pending reference to adjudication. 20

The Defendant has failed to discharge its burden of proof to show that there is an arbitration clause or agreement to govern the dispute between the parties. The Appendix to the Contracts makes reference to arbitration but there is no express provision that the dispute shall be referred to arbitration. Although the Contracts refer to the FIDIC Short Form Contracts as their GCoC, a copy of the GCoC is not attached to the Contracts.

The Plaintiff’s claims in the O.S. do not revolve around any payment dispute as the issues raised and reliefs sought in the O.S. are not disputes within the ambit of the CIPAA as they are generally common law claims. The subject matter of the dispute concerns purely administrative miscarriages and misconduct by the Defendant, whereby the Plaintiff is seeking, among others, for a declaration that there is a violation of social justice in the contract management by the Defendant as the employer towards the Plaintiff as the contractor under the Contracts. The Stay Application ought to be dismissed as the claims/ prayers sought 21 by the Plaintiff are not within the jurisdiction conferred to an adjudicator under the CIPAA.

In the event that the Court takes the view that there is an arbitration agreement, Clause 15 of the GCoC is a two tier dispute resolution incorporating an arbitration agreement similar to that as in the Federal Court case of Juara Serata Sdn Bhd v Alpharich Sdn Bhd [2015] 9 CLJ 37, namely that the parties are required to refer their dispute to an adjudicator for a decision under Clause 15.1 and thereafter to a sole arbitrator under Clause 15.3 should there be no decision given by the adjudicator within the stipulated time frame or if either party is aggrieved by the adjudicator’s decision. The Plaintiff’s claims do not fall under the ambit of Clause 15.1 and thus the litigation process should prevail over the arbitration process. Moreover, before the dispute can be referred to arbitration, a notice of dissatisfaction must first be given under Clause 15.2, failing which, the arbitration clause becomes inoperative and incapable of being performed. 22

Clause 15 of the GCoC does not impose an absolute restriction on, or expressly ousts, the jurisdiction of the court. The parties have agreed to submit themselves to the jurisdiction of the court by invoking Clause 1.4 of the Appendix to the Contracts. Analysis and findings of the Court [18] The Defendant’s application is made pursuant to the new sub-s 10(1) AA 2005 (see s 4(a) of the Arbitration (Amendment) Act 2011 [Act A1395] which came into operation on 1.7.2011 (see P.U.(B) 342/2011). The said provision reads as follows: “10. (1) A court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds 23 that the agreement is null and void, inoperative or incapable of being performed.”. [19] As submitted by the Defendant, the significance of the introduction of this provision in AA 2005 was recognised in the case of KNM Process Systems Sdn Bhd v. Mission Biofuels Sdn Bhd [2013] 1 CLJ 993 where the court said: “[16] It is also evident with the amendment that it is now mandatory on the court to grant stay where the matter before it is the subject of an arbitration agreement unless the arbitration agreement is, in the words of the statute, “null and void, inoperative or incapable of being performed.” [17] It is now no longer possible to argue that in respect of the controversy between the parties there is no “dispute” with regards to the matter to be referred to arbitration, which is a test that invites unnecessary ambiguity and requires the court 24 to determine whether there is a “dispute” between the parties not dissimilar to the function performed by the court in determining whether there is a triable issue in a summary judgment application. The test is now simpler test of whether the matter before the court is the subject of an arbitration agreement or otherwise. To decide on the simpler test, it will become a matter of construction of the relevant arbitration agreement, where it exists.” (emphasis added). [20] In Samling Resources Sdn Bhd v Ekovest Bhd & Anor [2021] MLJU 156, this Court had referred to some of the case authorities cited by Mr. Rodney Gomez in his submission for the Defendant in the following passage: “[33] In Press Metal Sarawak Sdn Bhd v. Etiqa Takaful Bhd [2016] 9 CLJ 1, the question of law to be determined by the Federal Court was whether a court may grant a stay 25 of all proceedings under sub-s 10(1) AA 2005 where only part of the matter in issue falls strictly within the ambit of the arbitration clause and part does not. In the course of deciding this issue, Ramly Ali FCJ in delivering the judgment of the Court held that, in order to grant a stay order under sub-s 10(1) AA 2005 after the amendment to the said provision vide s 4 of the Arbitration (Amendment) Act 2011 [Act A1395] which came into operation on 1.7.2011, the Court has to consider whether there is in existence a binding arbitration agreement or clause between the parties, which agreement is not null and void, inoperative or incapable of being performed. The question as to whether there is a dispute in existence or not is no longer a requirement to be considered in granting a stay under sub-s 10(1) AA 2005. Once the Court finds that all the prerequisites as laid down in the said provision have been fulfilled, a stay is mandatory (see too, the decision of the Court of Appeal in TNB Fuel Services 26 Sdn Bhd v. China National Coal Group Corp [2013] 1 LNS 288 and the recent Federal Court decision in Tindak Murni Sdn Bhd v. Juang Setia Sdn Bhd & Another Appeal [2020] 4 CLJ 301).”. [21] The issue of whether the Defendant has taken “any other steps in the proceedings” does not arise in this case as the Defendant has not filed its AIR in relation to the O.S. and the AIS (encls. 1 – 3) in accordance with the directions of the Deputy Registrar during the case management on 16.12.2020 for the filing of affidavits to be stayed until the Defendant’s application in encl. 6 is disposed. 1st Issue: Is there a binding arbitration agreement between the parties? [22] As outlined earlier, the question as to whether there is a dispute in existence is an issue to be decided before the arbitral tribunal. The matter which has to be considered by this Court is, firstly, whether there is a binding arbitration agreement between the parties. 27 [23] Section 9 AA 2005 stipulates the “Definition and form of arbitration agreement” in these words (with my added emphasis): “9. (1) In this Act, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

An arbitration agreement may be in the form of an arbitration clause in an agreement or in the form of a separate agreement.

An arbitration agreement shall be in writing.

An arbitration agreement is in writing- 28

if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means; or … …

A reference in an agreement to a document containing an arbitration clause shall constitute an arbitration agreement, provided that the agreement is in writing and the reference is such as to make that clause part of the agreement. …”. [24] In the Agreement signed by the Plaintiff, it has acknowledged that it has examined the documents listed in the Appendix and offers to execute the works in conformity with the contract for the contract sum 29 as therein stated. In the Appendix, which is expressly stated as forming part of the Agreement, the documents forming the contract listed in the order of priority are –

the Addendum;

the Letter of Acceptance dated 8.10.2018;

the Agreement;

Particular Conditions;

General Conditions;

the Specification;

the Drawings;

the Schedule Of Rates; and

the bill of quantities. [25] Under the heading “Document Identification”, the remark “As Attached” can be seen. This indicates that the documents as listed above were attached to the Agreement and the Plaintiff must have been aware of the same. 30 [26] The General Conditions in the Contracts state as follows: “GENERAL CONDITIONS THE GENERAL CONDITIONS OF THIS CONTRACT SHALL BE THE GENERAL CONDITIONS IN THE SHORT FORM OF CONTRACT FIRST EDITION 1999 AS ISSUED BY FIDIC* EXCEPT AS AND WHEN AMENDED BY THE PARTICULAR CONDITIONS OF CONTRACT.

FIDIC* IS THE FRENCH ACRONYM FOR “INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS”

THE SHORT FORM OF CONTRACT FIRST EDITION 1999 CAN BE OBTAINED FROM WEBSITE “http://www.fidic.org/” OR FROM THE OFFICE OF ASSOCIATION OF CONSULTING ENGINEERS OF MALAYSIA (ACEM)”. 31 [27] The Defendant vehemently argued that Clause 15 of the FIDIC Short Form Contracts has been incorporated by reference and agreed to by the parties as the provision which governs the resolution of disputes. Clause 15 of the FIDIC Short Form Contracts is re-produced in full below: “Resolution of Disputes

15.1 Adjudication Unless settled amicably, any dispute or difference which arises between the Contractor and the Client out of or in connection with the Contract, including any valuation or other decision of the Client, shall be referred by either Party to adjudication in accordance with the attached Rules for Adjudication (“the Rules”). The adjudicator shall be any person agreed by the Parties. In the event of disagreement, the adjudicator shall be appointed in accordance with the Rules. 32

15.2 Notice of Dissatisfaction If a Party is dissatisfied with the decision of the adjudicator or if no decision is given within the time set out in the Rules, the Party may give notice of dissatisfaction referring to this Sub-Clause within 28 days of receipt of the decision or the expiry of the time for the decision. If no notice of dissatisfaction is given within the specified time, the decision shall be final and binding on the Parties. If notice of dissatisfaction is given within the specified time, the decision shall be binding on the Parties who shall give effect to it without delay unless and until the decision of the adjudicator is revised by an arbitrator.

15.3 Arbitration A dispute which has been the subject of a notice of dissatisfaction shall be finally settled by a single arbitrator under the rules specified in the Appendix. In the absence of agreement, the arbitrator shall be designated by the appointing authority specified in the Appendix. Any hearing 33 shall be held at the place specified in the Appendix and the language referred to in Sub-Clause 1.5.”. [28] The Appendix to the Agreement makes reference to Sub-Clause 15.3 of the FIDIC Short Form Contracts as shown below: “Arbitration Rules ……………………. 15.3 …… Asian International Arbitration Centre (“AIAC”) Arbitration Rules Appointing authority …… 15.3 …… Director of the AIAC Place of Arbitration ………… 15.3 …… Kuala Lumpur, Malaysia”. [29] The Rules for Adjudication referred to in Sub-Clause 15.1 are also provided in the FIDIC Short Form Contracts and it sets out 23 rules in general and on the appointment of the adjudicator, terms of 34 appointment of the adjudicator, payment and procedure for obtaining the adjudicator’s decision. For present purposes, suffice for me to quote the following rules from the Rules for Adjudication: “General 1 Any reference in the Conditions of Contract to the Rules for Adjudication shall be deemed to be a reference to these Rules. … Appointment of Adjudicator 3 The Parties shall jointly ensure the appointment of the Adjudicator. The Adjudicator shall be a suitably qualified person. 35 4 If for any reason the appointment of the Adjudicator is not agreed at the latest within 14 days of the reference of a dispute in accordance with these Rules, then either Party may apply, with a copy of the application to the other Party, to any appointing authority named in the Contract, or, if none, to the President of FIDIC or his nominee, to appoint an Adjudicator, and such appointment shall be final and conclusive. … Procedure for Obtaining Adjudicator’s Decision 19 A dispute between the Parties may be referred in writing by either Party to the Adjudicator for his decision, with a copy to the other Party. If the Adjudicator has not been agreed or appointed, the dispute shall be referred in writing to the other Party, together with a proposal for 36 the appointment of an Adjudicator. A reference shall identify the dispute and refer to these Rules. … 21 The Adjudicator shall act as an impartial expert, not as an arbitrator, and shall have full authority to conduct any hearing as he thinks fit, not being bound by any rules or procedures other than those set out herein. … … 23 No later than the fifty-sixth day after the day on which the Adjudicator received a reference or, if later, the day on which the Adjudicator’s Agreement came into effect, the Adjudicator shall give written notice of his decision to the Parties. Such decision shall include reasons and state that it is given under these Rules.”. 37 [30] Based on the foregoing excerpts from the FIDIC Short Form Contracts and GCoC, I am inclined to agree with the Defendant that it is the intention of the parties to the Contracts to be bound by the general conditions in the FIDIC Short Form Contracts, except as and when amended by the Particular Conditions of Contract, and this includes Clause 15 on the “Resolution of Disputes”. [31] The Particular Conditions begin with the following terms: “PARTICULAR CONDITIONS

The General Conditions shall be amended in accordance with the provisions of these Particular Conditions.

These Particular Conditions shall be read and construed with the General Conditions. 38

If there is any conflict or inconsistency between the provisions of the General Conditions and these Particular Conditions, these Particular Conditions shall prevail.”. [32] I have perused the Particular Conditions and I find no provision which expressly excludes or has amended Clause 15 of the FIDIC Short Form Contracts. [33] In Ajwa for Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd [2013] 5 MLJ 625, Zulkefli CJ (Malaya) (as he then was) in delivering the judgment of the Federal Court held that: “[24] On the issue of whether there is an incorporation of the STC and arbitration clause into the sales contracts we noted the sales contracts prominently incorporate the STC with the caption ‘ALL OTHER TERMS, CONDITIONS AND RULES NOT IN CONTRADICTION WITH THE ABOVE AS PER PIL’S TERMS AND CONDITIONS’. In our view as there is a 39 specific mention in the sales contracts that all terms and conditions of the respondent’s STC will be applicable, the intention of the parties is clear that arbitration clause would also be applicable. … [26] Section 9(5) of the Act therefore clarifies that the applicable contract law remains available to determine the level of consent necessary for a party to become bound by an arbitration made ‘by reference’. Section 9(5) of the Act in our view addresses the situation where the parties, instead of including an arbitration clause in their agreement, include a reference to a document containing an arbitration agreement or clause. It also confirms that an arbitration agreement may be formed in that manner provided, firstly, that the agreement in which the reference is found meets the writing requirement and secondly, that the reference is such as to make that clause part of the 40 agreement. The document referred to need not to be signed by the parties to the contract (see the case of Astel-Peiniger Joint Venture v Amos Engineering & Heavy Industries Co Ltd [1994] 3 HKC 328). We are of the view that the mere fact the arbitration clause is not referred to in the contract and that there is a mere reference to standard conditions which was neither accepted nor signed, is not sufficient to exclude the existence of the valid arbitration clause. There is no requirement that the arbitration agreement contained in the document must be explicitly referred to in the reference. The reference need only be to the document and no explicit reference to the arbitration clause contained therein is required. … [28] For the reasons abovestated we would answer the two questions of law posed for our determination as follows: 41

there is no requirement under the Act that where a reference is said to be made to a document containing an arbitration clause in an agreement, that agreement must be signed. In the present case, it is clear that the contract of sale was in writing and satisfies the requirement of s 9(4) of the Act. That agreement in writing incorporates the STC which contains the arbitration clause and satisfies the requirement of s 9(5) of the Act; and

s 9(5) of the Act does not require that the STC which contains the arbitration agreement being attached or published. It is sufficient that the incorporation is by notice in the document. …” (emphasis added) 42 [34] Applying the legal principles as laid down in Ajwa’s case to the Stay Application, it is indisputable that the reference to the FIDIC Short Form Contracts is found in the Contracts which are in writing. Next, the reference to the FIDIC Short Form Contracts in the General Conditions is unequivocal in that the GCoC shall be the general conditions in the FIDIC Short Form Contracts. Clause 15 in the FIDIC Short Form Contracts stipulates the manner in which any dispute between the parties is to be resolved. The reference to the FIDIC Short Form Contracts must surely include Clause 15. [35] Furthermore, the Appendix to the Agreement makes reference to Sub-Clause 15.3 of the FIDIC Short Form Contracts. In any event, the reference need only be to the FIDIC Short Form Contracts and no explicit reference to the dispute resolution provision in Clause 15 is required. Sub-s 9(5) AA 2005 does not require the FIDIC Short Form Contracts to be attached to the Contracts. Incorporation by notice as found in the General Conditions is sufficient. 43 [36] In the premises, there is no doubt in my mind that the provision on dispute resolution, which includes the arbitration agreement, as per Clause 15 of the FIDIC Short Form Contracts has been incorporated as the GCoC by the clear and unambiguous reference to the FIDIC Short Form Contracts in each of the Contracts entered into by the parties. In the circumstances, the 1st Issue must be answered in the positive. 2nd Issue: Is the Plaintiff’s suit against the Defendant in respect of a matter which is the subject of an arbitration agreement? [37] Although the Plaintiff attempted to portray its claims in the suit as being something other than the standard claims for non-payment of outstanding amounts under a construction contract i.e. that its grievance is with regards to the alleged administrative and misconduct by the Defendant/ employer amounting to a “violation of social justice in the contract management” and if the prayers for declaratory relief 44 are allowed, that it is entitled to the payments, refunds and damages as sought in the O.S., however, I am not persuaded that the suit involve matters which are not the subject of the dispute resolution clause and the arbitration agreement. [38] No matter what descriptions the Plaintiff chooses for the action that it has instituted against the Defendant, and from whichever angle that one looks at it, the foregone conclusion is that the Plaintiff is basically unhappy over issues surrounding the handling of its application for EoT and the termination of the Contracts by the Defendant. Hence, the dispute between the parties clearly arises from the Contracts and a determination of these issues would necessarily involve the interpretation and application of the relevant contractual clauses in the Contracts. [39] Such contract related issues should be referred to, and resolved by, adjudication and arbitration in accordance with Clause 15 of the FIDIC Short Form Contracts which has been incorporated by reference as the GCoC. To allow otherwise would be tantamount to giving the 45 Plaintiff free rein to ignore the express provisions in the Contracts to which the Plaintiff itself has accepted. [40] Moreover, as submitted by the Defendant, an arbitral tribunal has the jurisdiction to make declaratory orders and to award damages for breach of policy and fraud (see Press Metal, supra at paras 94 - 101) and the question of whether the difference or dispute is in part or in whole the subject matter of the claim is irrelevant in considering a stay under sub-s 10(1) AA 2005 (see Tindak Murni, supra at paras 52 and 53). In the instant case, once the dispute has been referred to adjudication and subsequently, to arbitration in accordance with Clause 15 of the GCOC, the arbitral tribunal appointed will have the power to make binding orders as it deems fit. [41] I would thus answer the 2nd Issue in the positive as well. 46 3rd Issue: Is the arbitration agreement null, void, inoperative or incapable of being performed? [42] Mr. Mohd. Hisham, in submitting for the Plaintiff, fervently argued that –

Clause 15.1 of the GCoC is impracticable as the matters brought before the court vide the O.S. do not fall within the interpretation of a dispute under ss 5 and 6 of the CIPAA; and

the arbitration clause is inoperative or incapable of being performed because the right to commence arbitration has not yet accrued due to the non-fulfillment of the condition precedent that the dispute must first be referred to an adjudicator as provided under Clause 15.1 of the GCoC. [43] These contentions can be addressed swiftly. 47 [44] In respect of subpara 42(a) above, based on Sub-Clause 15.1 of the GCoC and Rules for Adjudication as quoted previously, the reference to “adjudication” is not to be equated to adjudication as provided under the CIPAA or any other form of statutory adjudication but instead means contractual adjudication under the GCoC. [45] The difference between “contractual adjudication” and “statutory adjudication” was discussed in Heavenly Land Sdn Bhd v MS Elevators Engineering Sdn Bhd and another civil [2019] MLJU 1271, Kasugi Prima Sdn Bhd v Cobrain Holdings Sdn Bhd [2017] MLJU 1953 and Ban Soon Aik Construction Sdn Bhd v Berjaya Land Development Sdn Bhd and another appeal [2019] MLJU 1232). [46] The CIPAA came into operation on 15.4.2014. The Contracts were entered into by the parties some years after the CIPAA had come into force. The question as to whether the adjudication as agreed to in the Contracts would, in effect, allow the parties to contractually bypass statutory adjudication and frustrate the objectives of the CIPAA was not raised as an issue at the hearing of the Stay Application. 48 [47] In view of the above, the Court finds and holds that the statutory adjudication process under the CIPAA is not applicable at all and thus, the Plaintiff’s lengthy submissions premised on that statute is flawed. [48] With regards to subpara 42(b) above, the Defendant conceded, with reference to the decisions in Renault SA v Inokom Corp Sdn Bhd & Anor and other appeals [2010] 5 MLJ 394 and Usahasama SPNB-LTAT Sdn Bhd v. Abi Construction Sdn Bhd [2016] 7 CLJ 275 that all pre-conditions to an arbitration as set out in a dispute resolution clause must be fulfilled and that the Plaintiff ought to commence adjudication prior to the arbitration. This, says Mr. Rodney Gomez, is reflected in the prayers in the Stay Application. It is for this reason that the Defendant relied on sub-s 10(2) AA 2005 in submitting that this Court has the power to direct that the parties fulfil the conditions precedent in compliance with the terms of Clause 15.1 and 15.2 of the GCOC by first proceeding to have the dispute determined by way of adjudication and subsequently by way of arbitration. The cases of Gadang Engineering (M) Sdn Bhd v Bluwater Developments Bhd [2010] MLJU 49 2213, Apex Marble Sdn Bhd & Anor v Leong Tat Yan [2018] MLJU 39 and FAMG Idaman Resources v Jasmadu Sdn Bhd [2020] 7 MLJ 263 were cited as examples where the courts have imposed conditions pursuant to the power as provided under the said provision. To this, I would add the decision of this Court in Samling Resources (supra). [49] Sub-s 10(2) AA 2005 provides that “The court, in granting a stay of proceedings pursuant to subsection (1), may impose any conditions as it deems fit.”. In my considered view, this is a befitting case to grant a stay of the proceedings and for an order to be made that the parties are to proceed to have the dispute in relation to the Contracts to be determined by way of adjudication and that the Plaintiff shall refer the dispute to adjudication within 30 days from the date of the decision of this Court. [50] The answer to the 3rd Issue is therefore in the negative. 50 Conclusion [51] Following from the above analysis of the issues, the parties in this case, specifically the Plaintiff, must honour the dispute resolution clause in accordance with the Contracts that they have executed and are binding on them. It is on this basis that the Stay Application was allowed with the condition as afore mentioned and costs. Dated: 30 November 2021 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur 51 Counsels/ Solicitors: For the Plaintiff: Mohd. Hisham Bin Md. Nen (Norfazilawati Binti Che Harun with him) Messrs. Salina Fazilawati & Co. Advocates & Solicitors 3512-E, Tingkat 2 & 3 Jalan Sultanah Zainab 15050 Kota Bharu Kelantan For the Defendant: Rodney Gomez (Aarthi Jeyarajah & David Cheong Zhao Yee with him) Messrs. Shearn Delamore & Co. Advocates & Solicitors 7th Floor, Wisma Hamzah-Kwong Hing No. 1 Leboh Ampang 50100 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: Ajwa for Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd [2013] 5 MLJ 625 52 AOS Travel & Tours Sdn Bhd v Asean Bintulu Fertilizer Sdn Bhd [2018] MLJU 1814 Apex Marble Sdn Bhd & Anor v Leong Tat Yan [2018] MLJU 39 Ban Soon Aik Construction Sdn Bhd v Berjaya Land Development Sdn Bhd and another appeal [2019] MLJU 1232 Best Re (L) Ltd v Ace Jerneh Insurance Bhd (formerly known as Jerneh Insurance Bhd) [2015] 5 MLJ 513 Comos Industry Solution GMBH v Jacob and Toralf Consulting Letrikon Sdn Bhd & Ors [2012] 4 MLJ 573 Daewoo Corp v Bauer (M) Sdn Bhd [1998] 7 MLJ 25 Datuk Bandar Kuala Lumpur v Stess Property Sdn Bhd & Ors [2017] MLJU 764 ER Mekatron Manufacturing Sdn Bhd v Dataran Satria (M) Sdn Bhd [2021] MLJU 2392 FAMG Idaman Resources v. Jasmadu Sdn Bhd [2019] 9 CLJ 763; [2020] 7 MLJ 263 53 Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 Gadang Engineering (M) Sdn Bhd v Bluwater Developments Bhd [2010] MLJU 2213 Heavenly Land Sdn Bhd v Ms Elevators Engineering Sdn Bhd and another civil [2019] MLJU 1271 Juara Serata Sdn Bhd v. Alpharich Sdn Bhd [2015] 9 CLJ 37 Kasugi Prima Sdn Bhd v Cobrain Holdings Sdn Bhd [2017] MLJU 1953 KNM Process Systems Sdn Bhd v. Mission Biofuels Sdn Bhd [2013] 1 CLJ 993 Martego Sdn Bhd v. Arkitek Meor & Chew Sdn Bhd & Another Appeal [2019] 8 CLJ 433 Mersing Construction and Engineering Sdn Bhd v Kejuruteraan Bintai Kindenko Sdn Bhd & Ors [2011] 3 MLJ 264 Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd [2016] 5 MLJ 417 54 Renault SA v Inokom Corp Sdn Bhd & Anor and other appeals [2010] 5 MLJ 394 Samling Resources Sdn Bhd v Ekovest Bhd & Anor [2021] MLJU 156 Sanwell Corp v Trans Resources Corp Sdn Bhd & Anor [2002] 2 MLJ 625 Suncast Sdn Bhd [No Syarikat 296912-W] v Padang Indah Sdn Bhd [No Syarikat 206187-A1] [1999] MLJU 31 Tindak Murni Sdn Bhd v. Juang Setia Sdn Bhd & another appeal [2020] 4 CLJ 301 Total Future Sdn Bhd v Government of Malaysia & Ors [2013] 9 MLJ 288 Usahasama SPNB-LTAT Sdn Bhd v. Abi Construction Sdn Bhd [2016] 7 CLJ 275 View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2019] 5 CLJ 479 View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2015] MLJU 695 55 Legislation: Arbitration Act 2005, ss 9 & 10 Arbitration (Amendment) Act 2011, s 4(a) Construction Industry Payment and Adjudication Act 2012, ss 5 & 6 Rules of Court 2012, O. 92 r.