Jacob and Toralf Consulting Sdn Bhd & 3 Yang Lain v Siemens Industry Software GMBH & Co. KG (Germany) (24NCC(ARB)-41-12/2016)

JACOB AND TORALF CONSULTING SDN BHD (formerly known as Innotec Asia Pacific

PEC KONSULT SDN BHD (MALAYSIA) …APPLICANTS AND SIEMENS INDUSTRY SOFTWARE GMBH & CO. KG (GERMANY) (formerly known as Innotec GmbH) …RESPONDENT BEFORE YA KHADIJAH BINTI IDRIS JUDICIAL COMMISSIONER 3 JUDGEMENT Introduction [1] This is an appeal by the Applicants against my decision dated 26 May 2017 in allowing only in parts of the Applicants’ Amended Originating Summons dated 10 February 2017 (“OS”) with no order as to cost. [2] In the Amended OS (OS), the Applicants applied, under s. 38 of the Arbitration Act 2005 (“AA”) and Order 69 Rule 8 of the Rules of Court 2012 (“RoC 2012”), for the following order:

The Final Award dated 8 May 2015 from the ICC International Court of Arbitration by the Arbitrators Mr. Phillip Jeyaretnam SC, Mr. Chan Sek Keong and Mr. Alan J. Thambiayah in the matter of ICC Arbitration 17795/CYK under the rules of ICC between Siemen Industry Software GmbH & Co. KG. (formerly known as Innotec GmbH) (“the Claimant”) and Jacob and Toralf Consulting Sdn Bhd (formerly known as Innotec Asia Pacific Sdn Bhd) ALCIM Holding Sdn Bhd (formerly known as Alcim Technology 4 Sdn Bhd), Toralf Mueller, Jacob s/o George, Thomas George and PEC Konsult Sdn Bhd (“the Respondents”) be recognized as binding and be enforced by entry of judgment against the Respondent herein;

Cost of this application;

Such further and/or other reliefs as deemed fit and proper by this Honourable Court. [3] Having perused the affidavits and having heard submission from both parties I allowed for the Dispositions in the Final Award from the ICC International Court of Arbitration (Final Award) to be recognized as binding and be enforced by entry of judgment against the Respondent. Dissatisfied with my decision, the Applicants filed a Notice of Appeal on 22 June 2017. Factual background [4] The First and the Fourth Applicants are companies incorporated in Malaysia. The Second and the Third Applicants are Malaysian citizens and directors of the 1st and the 4th Applicants. All the Applicants are hereinafter collectively referred to as “the Applicants”. 5 [5] On 31 July 2008, the Applicants and the Respondent entered into a Settlement Agreement (“Settlement Agreement”) where they had agreed to amicably resolve certain legal proceedings and to allow for a full and final settlement of all matters in issue between them. The Settlement Agreement can be seen at Exhibit A-2 of the Applicants’ Affidavit in Support Enclosure 2. [6] Based on Clause D.9 of the Settlement Agreement the Applicants and the Respondent (collectively referred to as “the Parties”) agreed to the following arbitration clause which is incorporated in the Settlement Agreement – This Agreement shall be governed by and construed in accordance with Malaysia law. All disputes at all material time arising out of or in connection with the present Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (ICC) by three arbitrators appointed in accordance with the said Rules. Language of the proceedings shall be English. The seat of the arbitration shall be Singapore.” [7] Sometime in 2009, the Applicants commenced an action against the Respondent and five others via suit no. S-22-129-2009 in the High Court of Kuala Lumpur (“Suit 2009”). In the said suit the Applicants claimed that the Respondent had fraudulently misrepresented the 6 Applicants into entering the said Settlement Agreement. The Writ and Statement of Claim of the Applicants in Suit 2009 are exhibited as Exhibit A-1 in the Applicants’ Affidavit in Support Enclosure 2. [8] However, before it could be disposed of, the Respondent obtained an order from the Court of Appeal on 26 April 2011 to stay the proceedings in Suit 2009 in favour of arbitration. The Applicants’ motion for leave to appeal against the decision of the Court of Appeal was dismissed by the Federal Court. [9] Thereafter, the Respondent initiated an arbitration proceedings against the Applicants in Singapore pursuant to the arbitration agreement clause where it sought for the following reliefs –

Declaration as to the validity and finality of the Settlement Agreement entered into between the Respondent and the Applicants, and in the event of an opposite finding, the return to the Respondent of the sum of EUR 3 million plus interest calculated from 8 August 2008;

Declaration that the present Tribunal has sole jurisdiction to adjudicate on all disputes arising out of or in connection 7 with the Settlement Agreement, and grant any reliefs, including reliefs sought by the Applicants in Suit 2009;

Declaration as to the final and conclusive nature of the waiver of any claims of the Respondent under the Settlement Agreement, and their inability to assert any future claims including the ones asserted under 2009;

Determination as to the absence of valid cause available to the Applicants in initiating proceedings under Suit 2009, and a further declaration seeking the Applicants to withdraw Suit 2009;

Declaration to the effect that the Applicants jointly and severally bear the costs and expenses of (i) this arbitration, and (ii) the Suit 2009, and respective appeals of the Respondent plus interest.

Dismissal of the Applicants counterclaims. [10] The Applicants filed a counterclaim for damages in fraud against the Respondent in the arbitration proceedings. However the Tribunal made a finding that the said counterclaim was withdrawn due to the Applicant’s failure to provide the required advances on costs. 8 [11] The arbitration was conducted before the Arbitration Tribunal from 24 May 2014 to 30 May 2014 in Singapore. [12] On 8 May 2015, the Arbitration Tribunal delivered its Final Award as per Exhibit A-3 of the Applicants’ Affidavit in Support Enclosure 2. In the Final Award, the Arbitration Tribunal concluded that it has jurisdiction to hear and determine the Respondent’s claims and made the following findings – N. Summary of findings

Summing up, the Tribunal concludes that it has jurisdiction to hear and determine the Claimant’s claims, and that: a. The Settlement Agreement was procured by fraudulent misrepresentation; b. The Respondents did not affirm the Settlement Agreement; c. The Respondents, in instituting the 2009 Malaysian Suit, breached the arbitration agreement, but the matter has already been dealt with by the Malaysian Courts and so there is no arbitrable issue for this Tribunal.

Accordingly, the Claimant [Respondent] is not entitled to any of the declarations or relief sought by it. [13] At paragraph 189 to 192 of the Final Award, the Tribunal made the following disposition: 9

In the premises, the Tribunal concludes and holds that the Claimant’s [Respondent] claim be dismissed in its entirety.

The Tribunal awards to the Majority Respondents [Applicants] and to the 3rd Respondent their costs of this arbitration, to be taxed pursuant to section 21 of the International Arbitration Act, if not agreed.

The Tribunal also orders that the fees and expenses of the ICC and the Arbitral Tribunal be borne by the Claimant [Respondent]

All other claims and relief sought are hereby rejected. [14] The Applicants then applied to have their costs taxed and on 15 April 2016, the Registrar of the Singapore International Arbitration Centre (SIAC) issued the taxation certificate as per Exhibit A-4 of the Applicants’ Affidavit in Support. [15] The Respondent had also applied to the High Court of Singapore to set aside the Final Award. On 4 July 2016, the High Court of Singapore dismissed the Respondent’s application with cost. There was no appeal filed by the Respondent. [16] In December 2016 the Applicants filed the OS to register the Final Award based on the findings made by the Arbitration Tribunal. 10 The Preliminary Objection The Respondent’s objection [17] At the outset the Respondent took issue with the Applicants’ failure to state in the OS the particulars on the Respondent’s alleged non-compliance of the Final Award or the extent to which the same had not been complied with as required under Order 69 Rule 8 (2) (b) RoC

The requirement to do so is a mandatory pre-requisite to the enforcement of an arbitration award. The non-compliance is fatal and incurable and the OS ought to be dismissed ex debito. [18] To support their position the Respondent cited the case of Murray & Roberts Australia Pty Ltd V. Earth Support Company (Sea) Sdn Bhd [2015] 6 CLJ 649 where the High Court followed the CoA’s decision in Agrovenus LLP v. Pacific Inter-Link Sdn Bhd & Another Appeal [2014] 4 CLJ 525. The High Court in Murray & Roberts Australia Pty Ltd also refer to another CfA’s case International Bulk Carriers SPA v. CTI Group Inc. 11 The Applicants’ Response [19] By the determination of the Arbitration Tribunal as set out at paragraphs 186 and 189 there was no award per se to comply with or not to comply with except for the element of costs. As such, the Applicants were of the view that there was no award per se to be complied with or not to be complied with by the Respondent. [20] Hence the Applicants took the position that it is superfluous to have such statement under Order 69 Rule 8 of the RoC 2012 to be stated in the OS. Furthermore based on Order 2 rule 1 of the RoC 2012, the non-compliance of the procedural rules, if any, does not nullify the proceedings. Under the said provision the court has a wide discretion in dealing with such irregularities as long as it is not used to override justice. [21] It is the Applicants’ contention that there has not been any miscarriage of justice and prejudice caused to the Respondent. The Respondent too had failed to state in their affidavit of any miscarriage of justice or prejudice caused to them. As such, pursuant to Order 2 Rule 3 of the RoC 2012 the preliminary objection ought to be dismissed. 12 Merits of the OS The Applicants’ Submissions [22] The Applicants submit the right to register the Final Award which is an international arbitration award is as of right due to the word ‘shall’ in s. 38 (1) of the AA which appears to be in a directory term. [23] The grounds to refuse or to grant recognition and enforcement of the Final Award are exhaustive and limited to the grounds stipulated in s. 39 of the AA. The Respondent had failed to provide the court with any reasons as stipulated under the said provision as to justify the refusal of the recognition and enforcement of the Final Award. [24] The reason put forward by the Respondent as stated in paragraph 21 Respondent’s Affidavit in Reply dated 6 Mac 2017 are not reasons as stipulated under s. 39 of the AA to refuse the recognition and enforcement of the Final Award. The said paragraph reads – As such, the Applicants’ Application to purportedly register and enforce the entire Arbitration Award, including the findings of the arbitral tribunal, appears to be an attempt to utilize the findings of the said Arbitration Award for some other ulterior or collateral purpose and not for the purpose of enforcing the said award as provided under Section 38 of the Arbitration Act 13 2005 and Order 69 Rule 8 of the Rules of Court, 2012. The Respondent’s counsel shall submit in this point further in legal submissions. [25] It is the Respondent’s contention that the registration of an award is solely for the purpose of enforcing the award. It is a misconception on the part of the Respondent to say the Final Award cannot be registered because there is nothing to enforce. This is because –

The Final Award arose from an arbitration agreement that was made in Malaysia and subject to the laws of Malaysia;

(ii) The Malaysian Court of Appeal had granted stay of proceedings in Suit 2009 for the parties to resolve issues via arbitration process; and

(iii) S. 36 of the AA does not prevent the Applicants from relying upon the findings in the Final Award:

An award is final and binding

An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied upon by any party by way of defence, set-off or otherwise in any proceedings in any court. [26] Based on the Federal Court’s decision in the case of Christopher Martin Boyd v Deb Brata Das Gupta [2014] 9 CLJ 887 this court is a 14 “court of registration” and not a “court of enforcement”. The relevant passage of Federal Court judgment is as follows: There is a clear distinction between 'registration of an arbitration award' and 'enforcement of a judgment' that arises from the arbitration award that was duly registered as a judgment of the court, which was the subject matter of the bankruptcy proceedings. The provisions of s. 27 of the 1952 Act and s. 38(1) of the Arbitration Act 2005 are simply procedural provisions enabling an award made in consensual arbitration proceedings to be registered. In principle, unlike an order or judgment of the court, an arbitration award does not immediately entitle a successful party to levy execution against the assets of the unsuccessful party. The arbitration award must first be converted into a judgment or order of the court before the successful party can levy execution. Only upon converting the arbitration award will it be considered as a judgment or order of the court. (paras 19 & 20). The enforcement of arbitration awards must be viewed in two parts; first is the registration of the arbitration award itself as a judgment of the court and secondly, the enforcement or execution of such a judgment. The limitation period for enforcement, ie, the execution of the judgment of the court is 12 years as clearly prescribed under s. 6(3) of the LA. Since the award was registered as the judgment of the court on 19 January 2004, the appellant would have 12 years from the date when the award becomes a judgment of the court to enforce the said judgment. The leave application to enforce or execute the judgment on 14 March 2012 was filed well within the 12 years period. The appellant's bankruptcy proceedings were not barred by limitation since it had commenced the action within 12 years from the date of the registration of the award as the judgment of the court. (paras 23 & 25) 15 [27] Therefore, the Applicants’ present application to register the Final Award involves the first step only and that the enforcement of the Final Award is a separate exercise altogether. Thus, the Applicants submit that it has the prerogative to register the Final Award in Malaysia. [28] The Final Award is to be registered and recognised in its entirety. To support such proposition the Applicants advance the following –

The Applicants highlighted that the Respondent, based on paragraphs 19 to 21 of their Written Submission dated 3 April 2017, had not objected to the registration of the Final Award but that only the dispositive part of the Final Award that should be registered by this court.

S. 38 of the AA did not impose any condition for an arbitration award to be recognized and enforced by the Malaysian court. The statutory word used in s. 38 of the AA is “an award” and not ‘the disposition of an award’.

Under s. 2 of the AA, the term ‘award’ has been defined as “a decision of the arbitral tribunal on the substance of the dispute and includes any final, interim or partial award and 16 any award on costs or interest but does not include interlocutory order”.

Reference made by the Respondent to the United Kingdom Arbitration Act 1996 (“UKAA”) is improper as there is no definition of “award” given in the UKAA.

The Applicants tabulate the law in other jurisdictions which did not make any mention to recognize or enforce only the dispositional part of an arbitration award –

The Singapore’s International Arbitration Act (C. 143A): s. 2 (1) Interpretation defines the word ‘award’ as: “a decision of the arbitral tribunal on the substance of the dispute and includes any interim, interlocutory or partial award but excludes any orders or directions made under section 12” s. 19 – Enforcement: “An award on an arbitration agreement may, by leave of the High Court or a Judge thereof, be enforced in the same manner as a judgement or an order to the same effect and, where leave is so given, judgement may be entered in terms of the award.” 17

(ii) The UKAA: s. 66 (1) – Enforcement “An award made by the tribunal pursuant to an arbitration agreement may, by the leave of the court, be enforced in the same manner as a judgement or order of the Court to the same effect.”

(iii) The Australian’s International Arbitration Act 1974: s. 3 (1) and (2) – Interpretation “arbitral award has the same meaning as in the Convention” “Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty-fourth meeting, a copy of the English text of which is set out in Schedule 1” “ (2) in this Part, where the context so admits, enforcement, in relation to a foreign award, includes the recognition of the award as binding for any purpose, and enforce and enforced have corresponding meanings. ” 18 s. 8 (2) and (3) – Recognition of Foreign Awards “ (2) Subject to this Part, a foreign award may be enforced in a court of a State or Territory as if the award were a judgement or order of that court. ” “ (3) Subject to this Part, a foreign award may be enforced in the Federal Court of Australia as if the award were a judgement or order of the court. ”

(iv) The Convention of the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”): Article 1 (2): “The term ‘arbitral awards’ shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which parties have submitted.” Article III “Each Contracting State shall recognize arbitral award as binding and enforce them in accordance with the rules of procedure of the territory where the Award is relied upon, under the conditions laid down in the following article. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.” 19 [29] The Applicants further submit the Court must have regard to the following:

The word “AWARD” in the Final Award is captioned. Therefore, it is not just the dispository orders made therein.

Article 25 (2) of the ICC International Court of Arbitration Rules 1998 states: “The Award shall state the reasons upon which it is based”

S. 33 (3) of the AA states: “ (3) An Award shall state the reasons upon which it is based, unless –

The parties have agreed that no reasons are to be given; or

The award is an award on agreed terms under

The Applicants argued that the Final Award is a “reasoned award” as defined by Russel on Arbitration (23rd Ed.) at page 283 when it states: 20 “Meaning of ‘reasoned award’. A reasoned award is one in which the tribunal sets out the reasons for its decision and these reasons form part of the award itself.” As such the reasons and disposition of the Final Award which forms part and parcel of the Final Award ought to be registered and recognised and binding.

In the case of International Bulk Carriers SPA v. CTI Group Inc [2014] 8 CLJ 854 CA, the Court of Appeal held that the failure to exhibit an annexure to the award rendered the award incomplete. Therefore, when registering the award, the law requires the entire award and not just part of the Final Award to be exhibited.

Case laws show the Malaysian courts’ practice is to register an arbitration award in its entirety. The Applicants refer to the judgement by Nalini Pathmanathan J (as she then was) in Open Tyre Joint Stock Company Efirnoye (“EFKO”) v Alfa Trading Limited [2012] 1 MLJ 685. The Applicants claimed the learned Judge had recognized and enforced the entire Award and not part of it. 21 [30] Furthermore, the Applicants reiterate that the wordings used in s. 38 of the AA and in case law do not make a distinction as to the extent of the registration and recognition of “an award”, thus the Applicants argued that the entire Final Award must be recognized and registered by this court. The Respondent’s Submissions [31] It is the Respondent’s position that the findings of the Final Award are not registrable to be enforced. [32] S. 36 (1) of the AA provides that arbitral award is final and binding between parties as it extinguishes the cause of action in the subject matter of the arbitration proceedings. However, it gives rise to the cause of action in enforcement of the arbitration award. Therefore, the Respondent argued that the Applicants do not have the unfettered right to use the findings in the Final Award as the intent of s. 36 (1) of the AA is premised on the doctrine of issue estoppel or res judicata in case the same subject matter is tried before a separate tribunal or court. 22 [33] In the case of Skylark Jaya Sdn Bhd & Ors v. Pengarah Tanah Dan Ukur Jabatan Tanah Dan Ukur Sabah & Ors [2011] 1 LNS 578, the High Court of Sabah & Sarawak held: As for the contention that an arbitral decision cannot be used to invoke the principle of res judicata, again that contention is misconceived. The doctrine of res judicata basically prohibits the litigation of the same cause of action. Section 36 of the Arbitration Act 2005 provides as follows:

An award is final and binding

An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied upon by any party by way of defence, set-off or otherwise in any proceedings in any court.

The arbitral tribunal shall not vary, amend, correct, review, add to or revoke an award which has been made except as specifically provided for in section 35. The effect of Section 36(1) is simply that the original cause of action is extinguished and gives rise to another cause of action of enforcing the award. Here there is no appeal against the award which means it is as 'final' as it can be, so to speak, as far the cause of action in the arbitral proceeding. [34] The Respondent further submits that this court is a “court of enforcement” and since the Applicants had failed to set out the non-compliance or the extent of the non-compliance of the Final Award by 23 the Respondent in the OS, there is no legal basis for the court to allow the Final Award to be registered entirely. [35] To allow the Final Award to be registered as judgement defeats the principles of confidentiality of arbitration proceedings and the rationale for which parties are permitted under the AA to register the award. [36] Additionally, there is nothing to enforce in the Final Award as the Respondent’s declaratory prayers had been dismissed and to have it registered for the purpose of use in future proceedings defies the principles of finality of proceedings between the Parties. [37] On the issue whether the entire Final Award including its findings or just the dispositive part of the Final Award should be registered, reference was made by the Respondent to the provisions in the UKAA. The Respondent contends even though UKAA did not provide for the definition of the term “award”, in the English case Enterprise Insurance Company plc v U-Drive Solutions (Gibraltar) Ltd and another [2016] EWHC 1301 (QB), the High Court made reference to Mr. Tim Kerr QC’s approach in Brake v Patley Wood Farm LLP [2014] EWHC 4192 (Ch) who approved Russell on Arbitration definition that an award is the final 24 determination of a particular issue or claim in the arbitration. The Respondent submits such definition is similar to the definition of the term ‘award’ in s. 2 of the AA. [38] Thus, the Respondent submits that the Atkins Court Forms (as in the Respondent’s Supplementary Bundle of Authorities) which are precedents used by the courts of the United Kingdom are relevant for this court to consider. The Atkins Court Forms in respect of leave given to enforce an arbitration award requires only the material part of the award is to be registered, recognised and enforced. The Respondent submits the term ‘material part of the award’ essentially means the dispositive part of an arbitration award and not the findings. [39] Furthermore, the definition of the term ‘award’ in s. 2 of the AA which states “decision on the substance of the dispute” refers to the final dispositive portion on the substance of the dispute between the parties. The definition did not state “decision on AND the substance of the dispute” which the Respondent argued could have been consistent with the Applicants’ contention that findings form part of the Final Award and capable of being registered. 25 [40] The Respondent invited this court to consider the Reciprocal Enforcement of Judgement Act 1958 (Act 99) which also deals with registration of enforcement of foreign arbitral award in reciprocating states. Act 99 requires the foreign arbitral award to be registered must be in respect of monetary claim which has yet to be satisfied. [41] As such Act 99 is not concerned with the findings and reasonings behind the monetary judgment. The Respondent contends this court ought to adopt the same approach as in Act 99. [42] The Respondent pointed out the requirement in s. 38 of the AA for the production of the “duly authenticated original award or duly certified copy of the award” does not mean that the entire Final Award including the findings is to be recognised and enforced. This is because the requirement under s. 38 is merely evidentiary in nature. [43] The Respondent states that it has no assets in Malaysia that is to be subjected to enforcement proceedings. As such there is no basis for the Final Award to be registered in Malaysia and even if it is registered, the Final Award may not be able to be enforced against the Respondent at all. 26 Issues [44] The issues which requires the determination of this court are as follows –

whether non-compliance with Order 69 rule 8 (2)(b) of the RoC 2012 is incurable and fatal; and

whether the entire Final Award which includes the Summary of findings of the Arbitration Tribunal is capable of being registered and recognised as binding and enforceable under s. 38 of the AA or whether it is to be limited to the Disposition handed down by the Arbitration Tribunal. Findings of the Court The preliminary objection [45] Order 69 rule 8 of the RoC 2012 reads as follows –

An application for permission to enforce an award in the same manner as a judgment or an order may be made without notice in an arbitration claim originating summons. 27

The arbitration claim originating summons shall

state the name and the usual or last known place of abode or business of the applicant, and the respondent against whom it is sought to enforce the award, respectively; and

state either that the award has not been complied with or the extent to which it has not been complied with at the date of the application.

The applicant shall file by affidavit, written evidence on which he intends to rely when he files his originating summons, including exhibiting the original arbitration agreement and the duly authenticated original award or, in either case, a duly certified copy thereof and where the award or agreement is in a language other than the national language or English, a translation of it in the English language, duly certified as a correct translation by a sworn translator or by an official or by a diplomatic or consular agent of the country in which the award was made.

The Court may specify parties to the arbitration on whom the arbitration claim originating summons shall be served.

With the permission of the Court, the arbitration claim originating summons may be served out of the jurisdiction irrespective of where the award is, or is treated as, made.

An order giving permission to enforce the award shall

be drawn up by the applicant; and

be served on the respondent by

delivering a copy to him personally; or

(ii) sending a copy to him at his usual or last known place of residence or business. 28

Within fourteen days after service of the order giving permission to enforce the award or, if the order is to be served out of the jurisdiction, within such other period as the Court may set-

the respondent may apply to set aside such order; and

the award shall not be enforced until-

after the expiration of that period; or

(ii) if the respondent applies within that period to set aside, until after the application made by the respondent has been finally disposed of.

The order giving permission for enforcement shall contain a statement of the right to make an application to set aside the order.

Order 11, rules 5, 6, and 8 shall apply to the service out of jurisdiction of the arbitration claim originating summons, or any order made in such claim, under paragraph (5).

Where a body corporate is a party, any reference in this rule to a place of residence or business shall have effect as if the reference were to the registered or principal address of the body corporate.

Where the award sought to be enforced is in the nature of an interim injunction under subsection 13(6) of the 1952 Act or subsection 19(1) of the 2005 Act, the order shall be granted only if the applicant undertakes to abide by any order the Court or the arbitral tribunal may make as to damages. The order shall be enforceable immediately, and subparagraph (7)(b) shall not apply. [46] The Applicants did not dispute that the OS has not stated that the Final Award has not been complied with and neither did the OS state the extent to which the Final Award has not been complied with. The 29 Applicants’ explanation to such omission is simply this – based on the Final Award handed down by the Arbitration Tribunal, there was no award to comply with except for the element of costs. [47] The Respondent cited the High Court case Murray & Roberts Australia Pte Ltd to support its contention in respect of the mandatory compliance with Order 69 rule 8. The complaint by the defendant in the said case was that the intitulement of the originating summons did not mention which particular rule of O. 69 of the ROC was relied on by the plaintiff. Thus the originating summons did not comply with Order 7 rule 2(1A) of the RoC 2012 and such omission had prejudiced the defendant. The learned Judge ruled - [39] The OS did not "fully" comply with O. 7 r. 2(1A) RC because of the plaintiff's omission. I used the term "fully" because the plaintiff correctly cited s. 38 RC in the intitulement as the "written law under which the court is being moved" as required by O. 7 r. 2(1A) RC. Such a partial non-compliance with O. 7 r. 2(1A) RC by way of the plaintiff's omission:

is a mere irregularity which can be cured under O. 1A read with O. 2 r. 1(1) and (2) RC. This is because the court "shall have regard to the overriding interest of justice"; and

does not justify a striking out of the OS under O. 18 r. 19(1) RC. 30 The above decision is based on the following reasons:

the reference to s. 38 AA in the intitulement will be sufficient to inform the defendant of the purpose, basis and effect of the OS;

(ii) the OS states in great detail the prayers and the grounds in support of the OS that the plaintiff is applying to this court to recognise and to enforce the Australian Arbitral Awards against the defendant. The purpose, basis and effect of the OS is accentuated by the detailed affidavit in support of the OS. There is therefore no room for any surprise or confusion to the defendant due to the plaintiff's omission; and

(iii) I am not able to see any prejudice caused to the defendant by the plaintiff's omission because:

the intitulement has already mentioned s. 38 AA;

rule 8 is the only rule in O. 69 RC regarding recognition and enforcement of foreign arbitral awards. Order 69 r. 9 RC also refers to O. 69 r. 8 RC. As explained above, the plaintiff is already bound by its own reference in the intitulement to s. 38 AA. There is therefore no other rule in O. 69 RC (other than r. 8) for the plaintiff to rely on subsequently so as "move goal posts" to the defendant's surprise and detriment; and

prior to the filing of the OS, the defendant has instituted the defendant's suit in respect of the Australian Arbitral Awards and has proceeded with the hearing of the defendant's suit until the dismissal of defendant's suit. In view of the defendant's suit, the 31 defendant cannot be said to be unprepared or has been caught by surprise by the plaintiff's omission. [48] The defendant in Murray & Roberts Australia contended that the plaintiff had contravened Order 7 rule 3(1) of the RoC 2012 which states as follows –

Contents of originating summons (O. 7 r. 3)

Every originating summons shall include a statement of the questions on which the plaintiff seeks the determination or direction of the Court or, as the case may be, a concise statement of the relief or remedy claimed in the proceedings begun by the originating summons with sufficient particulars to identify the cause or causes of action in respect of which the plaintiff claims that relief or remedy. [49] Having referred to a string of authorities, the learned Judge states – [44] The above cases have interpreted O. 7 r. 3(1) RC whereby an originating summons has to fulfil either one of these two limbs:

the OS should contain "a statement of the questions on which the (plaintiff) seeks the determination or direction of the court" (first limb); or

the OS should state "a concise statement of the relief or remedy claimed in the proceedings begun by the originating summons with sufficient particulars to identify the cause or causes of action in respect of which the plaintiff claims that relief or remedy" (second limb). 32 [45] I have perused the OS in this case and I am satisfied that the OS has satisfied the first limb … [50] The learned Judge made the following observations in regards to non-compliance of Order 7 rule 3 of the RoC 2012 – [47] … I have the following observations on the assumption that an originating summons does not comply with either the first or second limb:

the above cases on the mandatory effect of O. 7 r. 3(1) RC, have been decided before the introduction of O. 1A and O. 2 r. 1(2) RC. I am of the respectful view that a mere breach of O. 7 r. 3(1) RC may be cured under O.1A and O. 2 r. 1(2) RC if there is no injustice caused to a defendant;

even if an originating summons breaches O. 7 r. 3(1) RC, O. 18 r. 19(1) RC confers power on the court to allow the originating summons to be amended, instead of striking it out, as held by a judgment of the Court of Appeal delivered by Mahadev Shankar JCA in Muniandy Subrayan & Ors v. Chairman and Board Members, Koperasi Menara Maju Bhd [1997] 1 CLJ 417; [1997] 1 MLJ 557, at 560 and 561. Such an option is clearly in the interest of justice when:

the originating summons has not been heard;

(ii) any prejudice to the defendant may be remedied when the plaintiff amends the originating summons in compliance with O. 7 r. 3(1) RC; and 33

(iii) the defendant may be "compensated" in costs to be paid by the plaintiff. [51] Based on the facts, the plaintiff in Murray & Roberts Australia had stated in its originating summons Order 69 of the RoC 2012 but failed to state which rule in the said Order 69 is being relied on. [52] In the instant case, initially the Plaintiff’s OS completely failed to make reference to the said Order 69 in the intitulement. On the first return date, this court raised the matter with the Applicants who then applied orally to amend the OS to rectify the omission in regards to the intitulement and also with regards to the Applicants’ compliance with Order 69 rule 8(2) and (3) of the RoC 2012. This court allowed such oral amendment. [53]

The Final Award dated 8th May 2015 from the ICC International Court of Arbitration by the Arbitrators Mr. Philip Jeyaretnam SC, Mr. Chan Sek Keong and Mr. Alan J. Thambiayah in the matter of ICC Arbitration 17795/CYK under the rules of ICC between Siemes Industry Software GmbH & Co. KG. (formerly known as Innotec GmbH) (“the Claimant”) and Jacob and Toralf Consulting Sdn Bhd (formerly known as Innotec Asia Pacific Sdn Bhd), ALCIM Holding Sdn Bhd (formerly known as Alcim Technology Sdn Bhd), Toralf Mueller, Jacob s/o George, Thomas George and PEC Konsult Sdn Bhd (“the Respondents”) be recognized as binding and be enforced by entry of judgment agent the Respondent herein;

costs of this application;

such further and/or other reliefs as deemed fit and proper by this Honourable Court. STATEMENT PURSUANT TO ORDER 7 RULE 3 OF THE RULES OF COURT 2012 On 8th May 2015 Mr. Philip Jeyaretnam SC, Mr. Chan Sek Keong and Mr. Alan J. Thambiayah who were appointed to Arbitrate under the Rules of the International Chamber of Commerce as the arbitrators (“the Arbitrators”) in the 36 matter of the ICC Arbitration Proceedings No. 17795/CYK between the Claimant and the Respondents handed down a Final Award dated 8.5.2015 wherein the Arbitrators made the following findings and dispositions:- “ a. The Settlement Agreement was procured by fraudulent misrepresentation; b. The Respondents did not affirm the Settlement Agreement; c. The Respondents, in instituting the 2009 Malaysian Suit, breached the arbitration agreement, but the matter had already been dealt with by the Malaysian Courts and so there is no arbitrable issue for this Tribunal. Accordingly, the Claimant is not entitled to any of the declarations or relief sought by it. ... In the premises, the Tribunal concludes and holds that the Claimant’s claim be dismissed in its entirety. The Tribunal awards to the Majority Respondents and to the 3rd Respondent their costs of this arbitration, to be taxed pursuant to section 21 of the International Arbitration Act, if not agreed. ” [57] I am of the view the absence of a statement which “state either that the award has not been complied with or the extent to which it has not been complied” is a mere regularity which is curable under Order 1A read with Order 2 rule 1(1) and (2) of the RoC 2012 which reads – 37 1A Court or judge shall have regard to justice Regard shall be to justice (O. 1A) In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules. 2 Effect of non-compliance

Non-compliance with Rules (O. 2 r. 1)

Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of any thing done or left undone, been non-compliance with the requirement of these Rules, the non-compliance shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

These Rules are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective.

The Court or Judge may, on the ground that there has been such non-compliance as referred to in paragraph (1), and on such terms as to costs or otherwise as it or he thinks just, bearing in mind the overriding objective of these Rules, exercise its or his discretion under these Rules to allow such amendments, if any, to be made and to make such order, if any, dealing with the proceedings generally as it or he thinks fit in order to cure the irregularity. 38

Application to set aside for irregularity (O. 2 r. 2)

An application to set aside any proceedings, any step taken in any proceedings or any document, judgment or order therein for non-compliance with these Rules shall not be allowed unless the application is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity and the non-compliance has occasioned a substantial miscarriage of justice or occasioned prejudice that cannot be cured either by amendment or an appropriate order for costs.

An application under this rule may, after notice of the irregularity has been given to the other party, be made by notice of application and the grounds of objection shall be stated therein.

Preliminary objection for non-compliance of rules not allowed (O. 2 r. 3) A Court or Judge shall not allow any preliminary objection by any party to any cause or matter or proceedings only on the ground of non-compliance of any provision of these Rules unless the Court or Judge is of the opinion that such non-compliance has occasioned a substantial miscarriage of justice or occasioned prejudice that cannot be cured either by amendment or an appropriate order for costs or both. [58] Moreover, the Respondent did not demonstrate how such failure by the Applicants to provide the statement required under Order 69 rule 8(2)(b) of the RoC 2012 has occasioned a substantial miscarriage of justice on the Respondent. To my mind by the words “substantial miscarriage of justice” and not a mere “miscarriage of justice” is very 39 much consistent and strengthen the overriding objective to deal with the case justly on its merits and not on technicalities for non-compliance. [59] Based on the aforesaid reasons, the preliminary objection was dismissed. Whether the entire Final Award including the Summary of findings at paragraphs 185 to 186 of the Final Award is capable of being recognised as binding and enforceable under s. 38 of the AA [60] Although the Applicants concede that by the determination of the Arbitration Tribunal there was no award to be complied with, nevertheless the Applicant via the Amended OS seeks to register the Final Award. The intention of the Applicants is clear – they wish to rely upon the findings made by the Arbitration Tribunal presumably against the Respondent in relation to Suit 2009. This intention to rely upon the findings is stated in paragraph 13 of the Applicants’ Affidavit in Support of the OS (Enclosure 2) and paragraph 9 of the Plaintiff’s Further Affidavit Enclosure 4. However the Applicant will have to overcome the statutory requirements in relation to registration of the Final Award first before pursuing their reliance on the Summary of findings made by the Arbitration Tribunal. As can be seen from the discussion below 40 registration of an award is not as a matter of right, contrary to the position taken by the Applicants. [61] The relevant provision which governs the recognition and enforcement of arbitration award is provided in s. 38 of the AA which reads – 38 Recognition and enforcement

On an application in writing to the High Court, an award made in respect of an arbitration where the seat of arbitration is in Malaysia or an award from a foreign State shall, subject to this section and section 39 be recognised as binding and be enforced by entry as a judgment in terms of the award or by action.

In an application under subsection (1) the applicant shall produce -

the duly authenticated original award or a duly certified copy of the award; and

the original arbitration agreement or a duly certified copy of the agreement.

Where the award or arbitration agreement is in a language other than the national language or the English language, the applicant shall supply a duly certified translation of the award or agreement in the English language.

For the purposes of this Act, "foreign State" means a State which is a party to the Convention on the Recognition and 41 Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration in 1958. [62] The onus is on the Applicants to comply with the formal requirements as set out in s. 38 of the AA. The onus then shifts to the Respondent who opposes the recognition and enforcement of the Final Award to prove to this court why the Final Award should not be recognised and enforced under s. 39 of the AA. This two-stage approach was established in Agrovenus LLP v. Pacific Inter-Link Sdn Bhd & Another Appeal [2014] 4 CLJ 525 where the Court of Appeal stated as follows – [13] In our view, s. 38 reflects the obvious. An applicant for recognition or enforcement of an award must first satisfy the court that there is an award and an arbitration agreement that authorised it. That would show of the tribunal that made the award sought to be recognised and enforced is the tribunal referred to in the arbitration agreement. Although an objection as to jurisdiction of the arbitral tribunal could be argued on the basis of the terms of the arbitration agreement, we accept that a formalistic approach to compliance with s. 38, by production of the copy of the award and the sale contract of 3 April 2009 relating to the transaction in dispute and containing an arbitration agreement suffices under s. 38 as prima facie proof. [14] We held the view that the second stage is s. 39, which deals with the request and grounds relied upon for refusal of the recognition or enforcement sought, and that this second stage is where questions relating to jurisdiction of the arbitral tribunal as well as whether, inter 42 alia, the arbitral tribunal exceeded its jurisdiction or dealt with any dispute not contemplated or not falling within the terms of the submission to arbitration may properly be addressed. [15] We make the observation that the division under ss. 38 and 39 into two stages is to simplify the application for recognition or enforcement of an award and the process of dealing with exercise of discretion to refuse that application. This is consistent with recognition of such arbitrations as a specialised tribunal for resolution of commercial disputes or disagreements by those in commerce. [16] The respondent, in this case, is clearly the party against whom the recognition or enforcement of the award is invoked and who is requesting refusal. Section 39(1)(a) requires that it must satisfy the High Court with proof of any of the grounds set out in paras. (i) to (vii) thereof that it relied upon. In this case, para. (ii) was relied upon. [63] On the facts, I am of the view the formal requirements stipulated in s. 38 of the AA has been complied by the Applicants in the following manner –

a duly certified copy of the Final Award which was in the English language was produced as Exhibit A-5 in the Plaintiff’s Further Affidavit Enclosure 4; 43

a duly certified copy of the Settlement Agreement dated 31 July 2008 with the arbitration agreement at clause D.9 was produced as Exhibit A-6 in the Plaintiff’s Further Affidavit

the Final Award was made in Singapore, a state which is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. [64] The Applicants has also complied with Order 69 rule 8 (2)(a) of the RoC 2012. I have dealt with the Respondent’s objection to the Applicants’ non-compliance with Order 69 rule 8(2)(b) and dismissed the same as it is my considered opinion that such non-compliance does not prejudice the Respondent and has not occasioned a substantial miscarriage of justice on the part of the Respondent. [65] Premised on the above reasons the Applicants has overcome the first-stage threshold. 44 Whether the Respondent has establish any of the grounds stipulated in s. 39 of the AA to justify its opposition to the Final Award from being recognised and enforced as a judgment [66] On the hearing date of the Applicants’ OS, learned counsel for the Respondent confirmed their position that only the Disposition to the Final Award which is capable of being recognised and enforced as a judgment and not the entire Final Award including the Summary of findings made by the Arbitration Tribunal. As such none of the grounds exhaustively stated in s. 39 of the AA was relied on by the Respondent in opposing the Applicants’ OS. This would automatically means the Final Award ought to be recognised and enforced as a judgment. [67] As stated above, the issue to be determined here is whether the Final Award refers only to the Disposition of the Arbitration Tribunal or the entire Final Award which is to be recognised as binding and enforceable. This issue in turn beg the question - in the context of s. of the AA, what does “award” means? Does it only refer to the Disposition as set out at paragraphs 189 to 192 of the Final Award as advanced by the Respondent or does it refers to the entire Final Award as argued by the Applicants?. 45 [68] The Final Award consists of 73 pages. The front page states the number assigned to the arbitration proceedings, namely, Arbitration No. 17795/CYK followed by the names of the Respondent/Claimant and the Applicants/Respondents. It is divided into different parts which dealt with the following topics –

A. The Parties

B. The Arbitration Agreement

C. Governing Law and Language

D. Seat

E. Request for Arbitration and Answer

F. Relief Sought

G. Appointment of the Tribunal

H. Procedural Orders and Directions

I. Hearing

J. Issues to be Determined

K. Witness Testimonies

L. Submissions

M. Discussions

N. Summary of findings

O. Costs

P. Dispositions 46 [69] At paragraph 38 of the Final Award, there were nine issues listed under part J. Issues to be Determined as agreed issues to be determined by the Arbitration Tribunal. Eventually the Arbitration Tribunal made its findings as can be seen at part N. Summary of findings at paragraph 185 and its disposition at part P. Disposition at paragraphs 189 to 192. The last page of the Final Award bears the signatories of the three eminent arbitrators, the date and the seat of arbitration which is in Singapore. [70] It is this entire Final Award which the Applicants wants to be recognised and enforced as a court judgment. In actual fact the part which is particularly of significance and concern to the Applicants is part N. Summary of findings and this the Applicants has made known from the very beginning as evident from their Affidavits filed herein. [71] In dealing with the said issue one pertinent point which need to be borne in mind is this – as the OS relate to an application under s. and 39 of the AA, the word Final Award must be considered in the context of those particular provisions, ie for the purpose of it being registered, recognised and enforced as a judgment of the court. 47 [72] Under the AA, s. 2(1) provides the interpretation of the word “award” – “award” means a decision of the arbitral tribunal on the substance of the dispute and includes any final, interim or partial award and any award on costs or interest but does not include interlocutory orders; (emphasis added) [73] It is the Applicants’ contention that the above interpretation of the word ‘award’ allows for the Summary of findings of the Final Award to be recognised and enforced and not only the dispositive parts of the Final Award. According to the Applicants, the findings constitute the terms of the Final Award. [74] The word “decision” is defined in The Concise Oxford Dictionary as – 1 the act or process of deciding. 2 a conclusion or resolution reached. esp as to future action, after consideration … 3. the settlement of a question, a formal judgment. 4 a tendency to decide firmly: resoluteness 48 [75] In the Black’s Law Dictionary ‘decision’ is defined as – A judicial determination after consideration of the facts and the law; esp a ruling, order or judgment pronounced by a court when considering or disposing of a case [76] Based on the above definition, the word “decision” essentially means the final and ultimate conclusion or resolution or settlement reached after due consideration given to the issues/question which need to be determined. Since it relate to the final conclusion or resolution it would not include the reasoning which led to the conclusion or resolution. [77] In the instant case, in the context of the Final Award the final conclusion of the Arbitral Award which settled or disposed of the issues put before the Arbitration Tribunal is the Disposition part which is appropriately and conveniently placed as the last and final part of the Final Award (at paragraphs 189 – 192). [78] Taking into account the purpose of s. 38 of the AA and Order 69 of the RoC 2012, I am of the view the Summary of findings at part N cannot be construed as part of the award which is required to be registered for recognition and enforcement purposes as it is not the 49 ultimate ruling which disposed of the arbitration proceedings. The Summary of findings is the findings arrived at by the Arbitration Tribunal upon considering the oral and documentary evidence adduced before it. It is the ultimate and final conclusion of the Arbitration Tribunal which is intended to be given due recognition as binding and enforceable by conferring it with the status and effect of a court judgment. [79] The ultimate conclusion reached amongst members of the Arbitration Tribunal is the Disposition at paragraphs 189 – 192 of the Final Award. This is the decision which is required, under s. 38 of the AA, to be registered and recognised as binding as to enable it to be enforced as a court judgment. Thus, one of the mandatory formal requirement under s. 38 of the AA is to state to what extent the decision, which is the award, has been or has not been complied with. [80] In this respect I am in agreement with the Respondent’s argument that if the intention is to register the findings as part of the decision of an arbitrator/arbitration tribunal, the definition of “award” in s 2 of the AA ought to be “a decision of the arbitral tribunal and the substance of the dispute …” rather than the present definition “a decision of the arbitral tribunal on the substance of the dispute …”. 50 [81] Having considered the definition of “award” as it is in its current form and the intention of ss. 38 and 39 of the AA, I am of the view the definition of the term “award” in the AA is clear and unambiguous. As such it should be construed according to its plain meaning. In the Federal Court case of Metramac Corporation Sdn Bhd v Fawziah Holdings Sdn Bhd [2006] 4 MLJ 113 it was emphasised that when the language used in a statute is clear, effect must be given to it. The Federal Court cited with approval the observation of Higgins J in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 – The fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded according to the intent of the Parliament that made it, and that intention has to be found by an examination of the language used in the statute as a whole. The question is, what does the language mean; and when we find that the language means in its ordinary and natural sense it is our duty to obey that meaning even if we think the result to be inconvenient, impolite or improbable. [82] Under the circumstances there is no justification to construe the term “award” as including the entire Final Award as to do so would go against the very intention of ss. 38 and 39 of the AA, namely, to provide recognition and enforcement to the Disposition of the Final Award. 51 [83] Another ground relied on by the Applicants – the requirement under s. 38 of the AA for the entire award and not part of the award to be exhibited when making an application under the said provision shows it is the entire award which need to be registered for purpose of recognition and enforcement. In support of their contention the Applicants cited the case of International Bulk Carriers SPA v. CTI Group Inc [2014] 8 CLJ 854; [2014] 6 MLJ 851 where the Court of Appeal held that the failure to exhibit an annexure to the award rendered the award incomplete. As such it would not make sense for this court to only register the last page of the Final Award which is the Disposition. [84] In International Bulk Carriers SPA the issue for determination was whether the registration of an award was valid when the annexure to the arbitration was not produced before the court for purpose of registration of the award under s. 38 of the AA. It is in this context that the Court of Appeal found there were flaws in the registration of the award under s. 38 of the AA as the mandatory requirement of s. 38 was not complied with on the face of the record. Accordingly the Court of Appeal ruled that the registration of the award was ab initio a nullity and therefore set aside the registration of the arbitral award. The issue of whether the entire award is to be registered for purpose of s. 38 of the 52 AA was never an issue in International Bulk Carriers SPA for the determination of the Court of Appeal. [85] The requirement to produce a duly authenticated original award or a certified copy thereof is a procedural requirement for purpose of proving to the court there is an arbitration award made by an arbitration tribunal or arbitrator pursuant to an arbitration agreement between the parties. After all, an arbitrator is bound to state, in writing, the reasons upon which the award is based and signed it. In the case of more than one arbitrator, the signatures of the majority of all members of the arbitration tribunal is sufficient. Thus the requirement for the production of the entire Final Award is a preliminary evidentiary requirement which an applicant need to go through before the merits of the application is being dealt with. There is nothing in s 38 of the AA which can be construed to suggest the entire Final Award is to be registered for recognition and enforcement. [86] The Applicants also cited provisions in the arbitration law of other jurisdiction to show none of it makes any mention that only the dispositional part of an arbitration award is to be recognised or enforced. The relevant provisions are listed at paragraph 28 above. Whilst it is indeed clear that those provisions did not state only the dispositional part 53 of an award is to be registered, it is also obvious that those provision did not state the entire award of an arbitration tribunal is to be registered for purpose of recognition and enforcement. [87] Given that an award by an arbitration tribunal pursuant to an arbitration agreement is final and binding on the parties (s. 36 of the AA) the award is immediately enforceable at the instant of the party in whose favour the award was made. Pursuant to s. 38 of the AA the award made is enforceable in the same manner as a judgment of the court. The various mechanism of enforcing a judgment of court is provided for in Order 44 – 52 of the RoC 2012 which includes, among others, writ of seizure and sale, garnishee proceedings, committal. The Summary of findings at paragraphs 189 – 192 of the Final Award, could not be possibly executed within the execution mechanism currently provided for in the RoC 2012. [88] The Appellants may possibly seek declaratory relief on the Summary of findings made by the Arbitration Tribunal. But to pursue that course, it would necessarily and substantially relate to issues which have been comprehensively dealt with by the Arbitration Tribunal. As an arbitral decision is final and binding on the parties, it is no longer open to the Appellant re-litigate the issues in court. In the case of Skylark Jaya 54 Sdn Bhd & Ors v. Pengarah Tanah Dan Ukur Jabatan Tanah Dan Ukur Sabah & Ors [2011] 1 LNS 578, the High Court of Sabah & Sarawak held: As for the contention that an arbitral decision cannot be used to invoke the principle of res judicata, again that contention is misconceived. The doctrine of res judicata basically prohibits the litigation of the same cause of action. Section 36 of the Arbitration Act 2005 provides as follows:

An award is final and binding

An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied upon by any party by way of defence, set-off or otherwise in any proceedings in any court.

The arbitral tribunal shall not vary, amend, correct, review, add to or revoke an award which has been made except as specifically provided for in section 35.' The effect of Section 36(1) is simply that the original cause of action is extinguished and gives rise to another cause of action of enforcing the award. Here there is no appeal against the award which means it is as 'final' as it can be, so to speak, as far the cause of action in the arbitral proceeding. [89] In another attempt to support their position, the Applicants said case laws show the Malaysian courts’ practice is to register an arbitration award in its entirety. To support this so called “practice” the 55 Applicants cited only one case, namely, Open Type Joint Stock Company Efirnoye ("EFKO") v. Alfa Trading Ltd [2012] 1 CLJ 323 where the Appellants said the learned Judge had recognized and enforced the entire Award and not part of it. I have perused the judgement of the learned Judge and I fail to see how or why learned counsel for the Applicants could have come to such a conclusion. In Open Type Joint Stock Company Efirnoye ("EFKO"), the issue was whether application for registration and enforcement under s. 38 of the AA ought to be refused on the ground that the arbitral procedure was not in accordance with the agreement of the parties (s. 39(1)(a)(vi) of the AA) and that the arbitration award was in conflict with the public policy of Malaysia. Upon due consideration on the matter, the learned Judge ruled – [55] … I accordingly allow the plaintiff's application to recognise, register and enforce the Arbitration Award No. 127/2008 between the plaintiff and the defendant by the International Commercial Arbitration Court of the Russian federation as a judgment of this Court pursuant to s. 38(1) of the Arbitration Act 2005. The costs of this application are to be borne by the defendant. [90] There is nothing in the judgment of Open Type Joint Stock Company Efirnoye ("EFKO") which show that the learned Judge had dealt with the same issue that is before this court, which is, whether the entire Final Award is capable of being registered and enforced under s. 56 38 of the AA and not only the dispositional part. The judgment of the court essentially recognise, register and enforce the Arbitration Award No. 127/2008 between the parties to the arbitration proceedings. No where did it said that the entire award and not part of it is to be recognised and enforced. As such there is completely no basis for learned counsel for the Appellant to rely on Open Type Joint Stock Company Efirnoye ("EFKO") case to support their proposition. [91] In dealing with this issue, the function of the court in relation to recognition and/or enforcement of a foreign arbitral award must be duly observed and given full effect. In the case of Open Type Joint Stock Company Efirnoye ("EFKO"), the learned High Court Judge set out the function of the court in relation to recognition and/or enforcement of a foreign arbitral award as follows : [52] … The function of the court in relation to the enforcement of an Arbitration Award of a foreign State has been well summarised in the Hong Kong case of Xiamen Xinjingdi Group Ltd v. Eton Properties Ltd & Anor [2006] HKC 287 where Reyes J held: ... The court's role in an application for enforcement of a Mainland arbitral award under s. 2GG of the Arbitration Ordinance (Cap 341) was essentially that of an overseer. This 'overseeing essentially consists in ensuring that an arbitration is conducted fairly and in lending the means at the court's disposal (for example, interlocutory injunctions, orders for security for 57 costs, orders for the enforcement of an award as a Court judgment) to make an award effective. To that extent, I would wholly accept Gross J's observation that the Court should not second guess an arbitration award. Its role should be, although by no means entirely 'mechanistic', as 'mechanistic as possible'. [53] Although s. 2GG of the Arbitration Ordinance (Cap 341) is not pari materia with ss. 38 and 39 the underlying thread or principle remains the same, namely that the enforcing court ought to undertake any form of review of the arbitration award. The enforcing court should guard against attempts made to go behind the award or to argue or re-argue matters which have been comprehensively dealt with in the course of the arbitration. The provisions of s. 39, particularly the contravention of public policy argument ought not to be utilised as a guise to re-open settled matters in the arbitration. This the court ought to vigilantly guard against. [92] Based on the said judgment, whether a foreign arbitral award ought to be recognised and enforced, the court function as an enforcing court and ought to vigilantly guard against going behind matters which have been comprehensively dealt with in the course of the arbitration. [93] In Murray & Roberts Australia Pty Ltd the High Court had to deal with the same question under ss. 38 and 39 of the AA. The learned Judicial Commissioner related to the Federal Court case in Lombard Commodities Ltd v. Alami Vegetable Oil Products Sdn Bhd [2010] 1 CLJ 58 137; [2010] 2 MLJ 23 which dealt with s. 27 of the Arbitration Act 1952 as follows –

a sole English arbitrator gave an award in favour of the appellant company against the respondent company;

the appellant company applied to the High Court to recognise and enforce the English arbitral award under the then applicable s. of the Arbitration Act 1952 (1952 Act); and

Arifin Zakaria CJ delivered the majority judgment of the Federal Court as follows: [42] The next issue raised by the respondent is that the respondent was never a party to the arbitration agreement. In this regard, I agree with the submission for the appellant that if that is so, it is for the respondent to apply to the English Court, being the court having supervisory jurisdiction, to have the award set aside instead of raising the issue before our court, which is merely an enforcement court. [43] As observed by Coleman J in A v. B & Ors (No 2) [2007] 1 Lloyd's Rep 358: ... an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy going to the existence or scope of the arbitrator's jurisdiction or as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of the arbitration. [44] In Sabah Gas Industries Sdn Bhd v. Trans Samudera Lines (S) Sdn Bhd [1993] 2 MLJ 396, it was similarly held that a party who had been given every opportunity to submit and to take part in arbitration proceedings in London ought to have challenged the conduct of the arbitrator and/or validity of the award in the English Courts and not 59 here. Similarly in Hebei Import & Export Corp v. Polytek Engineering Co Ltd FAC V No 10 of 1988 (Hong Kong), the Court of Final Appeal of Hong Kong held that a party may be precluded by his failure to raise a point before the court of supervisory jurisdiction from raising that point or issue before the court of enforcement. [45] For the above reasons, I am in agreement with the appellant's submission that this issue could not be raised in the court here being the court of enforcement. If at all the respondent wanted to raise the issue that the respondent was not a party to the arbitration agreement this must be done in the English courts as the supervisory courts. [51] Lombard Commodities Ltd concerns s. 27 of the 1952 Act which reads as follows: An award on an arbitration agreement may, by leave of the High Court, be enforced in the same manner as a judgment or order to the same effect, and, where leave is so given, judgment may be entered in terms of the award. [94] Although the case in Lombard Commodities Ltd was concerned with s. 27 of the Arbitration Act 1952, the learned Judge is of the view that the Lombard Commodities Ltd is applicable to cases under ss. and 39 of the AA with regard to the role of the court being an enforcement court – [52] Section 27 of the 1952 Act is different from ss. 38 and 39 AA. Nonetheless, I am of the view that Lombard Commodities Ltd applies to ss. 38 and 39 AA. In deciding whether to recognise and enforce foreign arbitral awards under ss. 38 and 39 AA, the court is merely an enforcement court which does not exercise any supervisory jurisdiction 60 or power over foreign arbitral awards. Only the courts of the country which is designated the seat of arbitration, have supervisory jurisdiction and power over the arbitral award in question. [95] Following the authorities above, the function of this court is to give effect to the decision of the Arbitration Tribunal as manifested in the Disposition of the Final Award which is a foreign arbitral award. It is not the duty of this court to recognise the Summary of findings made by the Arbitration Tribunal as binding and enforceable as this would pave the way for the Applicants to re-open the issues which had been duly arbitrated. In any event, as stipulated in the Settlement Agreement, any disputes arising out of or in connection with the Settlement Agreement ought to be disposed of by way of arbitration (where seat of arbitration is in Singapore) and not by way of court process. Also, the Respondent’s application to have the Final Award set aside was dismissed by the Singapore High Court. That is the end of the matter in so far as the disputed issues and the declaratory relief sought by the Respondent. [96] Arbitration is a private means of dispute resolution between disputing parties and the award made binds parties who had consensually submitted to arbitration proceedings. Due to the private nature of an arbitration, it imposes certain implied obligation of 61 confidentiality. In regards to confidentiality of the award, Russell on Arbitration states – The duty of confidence is qualified in relation to the award itself, when disclosure is reasonably necessary to establish or protect a party’s legal rights as against a third party by founding a cause of action or a defence to a claim. In these circumstances disclosure of the award, including any reason given (but not the materials such as pleadings, witness statement, discovery etc use to give rise to the award) will not be a breach of the duty of confidentiality [97] In Insurance Company v Lloyd’s Syndicate [1994] C.L.C. 1303 the plaintiff applied to continue an injunction granted ex parte restraining the defendants from breaching the confidentiality of an arbitration award by disclosing it to third parties. The defendants obtained an arbitration award against the leading insurer which was not binding on the following insurers, but the defendant wished to send the arbitration award to them on the basis it might persuade them to accept liability. The plaintiffs refused consent on the ground that the award and its reason was confidential and although they would not suffer any specific damage as a result of its disclosure they were entitled to enforce that duty of confidence. The court granted the plaintiff’s application. At the headnotes, Held - 62

A party was only entitled to disclose an arbitration award to a third party if such disclosure was necessary to establish that party’s legal right against the third party. Disclosure was not justified, and would be in breach of the implied term of confidentiality in the agreement to arbitrate, if disclosure would be merely helpful.

The duty of confidentiality was an implied negative covenant to maintain the essentially unquantifiable benefit of secrecy for both parties. It was not necessary to establish specify loss or damage to enforce such a covenant.

Although the court would exercise its discretion to refuse an injunction where hardship would be caused to the defendant by enforcement of the covenant, the defendant had failed to establish that hardship would result from the enforcement of the duty of confidentiality. Accordingly the plaintiffs were entitled to a continuation of the injunction to restrain disclosure by the defendant of the arbitration award to the following reinsurers. [98] It follows that an arbitration award and the reasons which gives rise to the final award may only be disclosed when it is reasonably necessary to establish or protect the legal right of a party to the arbitration proceedings as against third party. However in the instant case there is no issue raised as to the necessity of disclosing the entire Final Award for purpose of protecting the right of either the Applicants of the Respondent. It is therefore imperative for parties to duly observe the confidentiality obligation relating to an arbitration award and reasons in order to preserve the confidential and private nature of an arbitration. 63 [99] The decision of the court in The Insurance Company goes to show such obligation must be maintained at all times and legal redress may be obtained to safeguard the obligation even though no damage or loss was occasioned as a result of a breach of the confidentiality obligation. The duty of the parties to an arbitration proceedings to maintain the confidentiality of the arbitration proceedings, in particular the arbitration award and the reasons thereto is indeed a compelling ground for this court to decide against the Applicants’ OS. [100] Contrary to the Applicants’ illusory claim that it is the practice of Malaysian court to register an arbitration award in its entirety, there appear to be no cases which have dealt with the issue in the instant case. Under the circumstances the Respondent invited this court to consider the provision in the Reciprocal Enforcement of Judgments Act 1958 (Act 99) and adopt the approach under Act 99 which the counsel argued only the terms of the judgment of the original court is registered and not the reasoning or grounds of judgment of the original court that is registered. [101] Act 99 is an Act for the reciprocal enforcement of judgments of “superior court” which is defined as the courts of a reciprocating country 64 described in the First Schedule of the said Act. Under s. 2 of the Act “Judgment” refers to - "judgment" means a judgment or order given or made by a court in any civil proceedings, or a judgment or order given or made by a court in any criminal proceedings for the payment of a sum of money in respect of compensation or damages to an injured party, and, except in relation to a country or territory outside the Commonwealth, includes an award in proceedings in an arbitration if the award has, pursuant to the law in force in the place where it was made, become enforceable in the same manner as a judgment given by a court in that place; and a judgment given in any court on appeal from a judgment given in the High Court shall be deemed to be a judgment given in the High Court; (emphasis added) S. 3 of Act 99 reads – Part II to extend to reciprocating countries

(1) This Part shall extend to judgments given in the superior courts of reciprocating countries.

…

Any judgment of a superior court, other than a judgment of such a court given on appeal from a court which is not a superior court, shall be a judgment to which this Part applies, if -

it is final and conclusive as between parties thereto;

there is payable thereunder a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty; and 65

being a judgment from a country or territory added to the First Schedule pursuant to subsection (2), it is given after that country or territory is added to that Schedule.

For the purposes of this section, a judgment shall be deemed to be final and conclusive notwithstanding that an appeal may be pending against it, or that it may still be subject to appeal, in the courts of the country of the original court. S. 4 of Act 99 provides - Application for and effect of registration of judgment

(1) A person, being a judgment creditor under a judgment to which this Part applies, may apply to the High Court at any time within six years after the date of the judgment, or, where there have been proceedings by way of appeal against the judgment, after the date of the last judgment given in those proceedings, to have the judgment registered in the High Court, and on any such application the court shall, subject to proof of the prescribed matters and to the other provisions of this Act, order the judgment to be registered: Provided that a judgment shall not be registered if at the date of the application -

it has been wholly satisfied; or

it could not be enforced by execution in the country of the original court.

Subject to the provisions of this Act with respect to the setting aside of registration-

a registered judgment shall, for the purposes of execution, be of the same force and effect;

proceedings may be taken on a registered judgment; 66

the sum for which a judgment is registered shall carry interest; and

the registering court shall have the same control over the execution of a registered judgment; as if the judgment had been a judgment originally given in the registering court and entered on the date of registration: Provided that execution shall not issue on the judgment so long as, under this Part and the rules of court made for the purposes thereof, it is competent for any party to make an application to have the registration of the judgment set aside, or, where such an application is made, until after the application has been finally determined.

Where the sum payable under a judgment which is to be registered is expressed in a currency other than Malaysian currency, the judgment shall be registered as if it were a judgment for such sum in Malaysian currency as, on the basis of the rate of exchange prevailing at the date of the judgment of the original court, is equivalent to the sum so payable. [102] Act 99 basically allows for a judgment (including an award made in arbitration proceedings conducted in a foreign country specified in the First Schedule Act 99) to be registered in the High Court of Malaya provided, among others, there is a sum of money payable and which has not been wholly satisfied. Thus the key person involves are referred to as judgment creditor and judgment debtor. 67 [103] Thus Act 99 is concerned with the registration of the operative part of the judgment which refers to the decision of the relevant court for the payment of a certain sum of money, for purpose of enforcement. The Act is not concerned with the finding or reasoning made by the superior court in arriving at such decision. As Act 99 and ss. 38 and 39 of the AA relate to enforcement of judgment (including award from arbitration proceedings) of reciprocating countries and enforcement of arbitral award from a foreign State respectively, I am of the view the approach in Act 99 (which is an older Act compared to the AA 2005) ought to be adopted for the purpose of determining the issue in the instant case. [104] Taking into consideration the above, I am of the view that there is no legal basis for the entire Final Award to be registered. It is only the Disposition in the Final Award which is capable of being registered, recognised as binding for purpose of enforcement. [105] As to the Respondent’s contention that there is no dispositive part of the Final Award that could be enforced in view of the Respondent’s declaratory reliefs sought in the arbitration was dismissed, I am of the view the Disposition at paragraphs 189 to 192 of the Final Award which evident the decision of the Arbitration Tribunal in relation to 68 the issues put before it for determination ought to be registered for the purpose of it being recognised as binding on both parties. Importantly there is no evidence adduced to satisfy this court that there are grounds (as stated in s. 39 of the AA) upon which the Final Award (that is the Disposition) ought not to be recognised or enforced. [106] As to whether it is capable of being enforced or otherwise, this issue should not hinder the registration of the Disposition for purpose of recognising the Final Award as binding. Although s. 38 of the AA seems to suggest that the process of recognition must be followed by enforcement action, I am of the view the said statutory provision ought not to be construed in such a manner. Adopting such proposition to the application of s. 38 of the AA would defy the reality and/or possibility of parties to the arbitration proceedings settling the dispute without having to be engulfed in the intricacies of legal enforcement. [107] In this respect I am in agreement with the Applicants that enforcement is a separate action to be pursued. Thus after the Final Award which is the Disposition is being registered and recognised as binding and enforceable, there is yet another process to be carried out for purpose of the enforcement per se. This was succinctly explained by the Federal Court in Christopher Martin Boyd case. The relevant 69 passage of the judgement of the said case is reproduced in paragraph 26 above. Conclusion [108] Premised on the aforesaid reasons I allowed partly the OS in that only the Disposition of the Final Award and not the entire of the Final Award which is to be registered, recognised as binding and be enforceable. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 28 FEBRUARY 2018 Counsel: Plaintiffs/Applicants : Dato’ Stanley Issacs together with Shara Ann Isaacs of Messrs Isaacs & Tan Defendant/Respondent : Dato’ Mohd Arief Emran bin Arifin with Raymond Tan (Pupil in Chambers) of Messrs Wong & Partners