Majlis Agama Islam Wilayah Persekutuan v Johawaki Development Sdn Bhd (WA-24C(ARB)-11-03/2019 & WA-24C(ARB)-12-03/2019)

The business relationship between the parties, Majlis Agama Islam Wilayah Persekutuan (‘MAIWP’) and Johawaki Development Sdn Bhd (‘Johawaki’), which began approximately in September 2003 when Johawaki offered its wide experience in property development to develop a piece of MAIWP’s land by way of privatisation, has been through a chequered history. Following a letter issued on 21.6.2004 indicating MAIWP’s acceptance of the said offer, the parties entered into a Joint Venture Agreement (‘JVA’) on 24.8.2004.

Unfortunately, what started as good intentions to build the Institut Kemahiran Baitumal (‘IKB’) for MAIWP in exchange for the balance of the land to be transferred to Johawaki for purposes of mixed development consisting of commercial and residential properties, 3 ended with the parties being embroiled in a dispute leading to MAIWP’s termination of the JVA on 26.6.2012.

MAIWP then initiated arbitration and naturally, this was met with resistance by Johawaki who submitted its own counterclaim. The learned Arbitrator, Bhag Singh, eventually dismissed MAIWP’s claim against Johawaki and allowed Johawaki’s counterclaim in his Final Award dated 14.12.2018 (‘Award’).

Johawaki filed Originating Summons (O.S.) No. WA-24C(ARB)-11- 03/2019 on 15.3.2019 pursuant to s 38 of the Arbitration Act 2005 [Act 646] (‘AA 2005’) seeking an order to enforce the Award (‘Enforcement Application’). This was followed by MAIWP’s O.S. No. WA-24C(ARB)-12-03/2019, which was filed on 30.3.2019, wherein MAIWP sought, inter alia, to set aside the Award under s 37 AA 2005 (‘Setting Aside Application’).

Having heard oral submissions by learned counsels representing the parties and having read the O.S., Affidavits and written submissions filed, I had allowed MAIWP’s Setting Aside Application with costs of 4 RM30,000.00 and dismissed Johawaki’s Enforcement Application with costs of RM5,000.00. Both order as to costs are subject to the payment of allocatur fees.

Johawaki has since appealed against my entire decision in allowing the Setting Aside Application whilst MAIWP is also pursuing its right of appeal against part of my decision where I refused to grant an extension of time for MAIWP to refer questions of law pursuant to s 42 AA 2005. The detailed prayers in respect of both O.S. will be elaborated further below together with my full reasons for the decision.

The evidence before the Court in respect of the Setting Aside Application is in the following affidavits:

MAIWP’s Affidavit in Support (‘AIS’) affirmed by its Legal Manager, Wan Mohd Sanusi Bin Mohd Noor on 29.3.2019 (Enclosures 2 - 5); 5

Johawaki’s Affidavit in Reply (‘AIR’) affirmed by its Director,

MAIWP’s AIR affirmed by its other Legal Manager, Izalina Binti

Johawaki’s Additional Affidavit affirmed by its counsel, Nur Allya Binti Abd Rahim on 8.8.2019 (Enclosure 22). [8] The cause papers in relation to the Enforcement Application are as follows:

Johawaki’s AIS affirmed by Muhammad Yazid Bin Mohamad Salim, advocate and solicitor, on 13.3.2019 (Enclosure 2);

MAIWP’s AIR affirmed by Wan Mohd Sanusi Bin Mohd Noor on 30.4.2019 (Enclosures 5 - 8); 6

Johawaki’s Additional Affidavit affirmed by Nur Allya Binti Abd

Johawaki’s AIR affirmed by Mohamad Akmal Bin Johari on 29.5.2019 (Enclosure 10); and

Johawaki’s Additional Affidavit affirmed by Nur Allya Binti Abd Rahim on 31.7.2019 (Enclosure 21). Background facts [9] MAIWP is the registered proprietor of a piece of land measuring 31.55 acres under registration number H.S. (D) 82758, P.T.14301, Mukim Batu, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan (‘said Land’). The said Land is originally leasehold land with a tenure of 99 years which will expire on 30.1.2095. The express condition endorsed on the document of title to the said Land (refer to “JADUAL KEDUA” in the JVA, exhibit “P-3” in MAIWP’s AIS at pp 196 - 202, 7 Enclosure 2) is stated as “Tanah ini hendaklah digunakan untuk tapak professional Institut Baitulmal Wilayah Persekutuan sahaja” while the restriction in interest is stated as “Tanah ini tidak boleh dipindahmilik, digadai, dicagar dan dipajak tanpa kebenaran Jawatankuasa Kerja Tanah Wilayah”. [10] As stated earlier, MAIWP and Johawaki entered into the JVA on 24.8.2004 to jointly develop a project known as “Cadangan Pembangunan Institut Kemahiran Baitumal, Pusat Perdagangan dan Perumahan di atas H.S.(D) 82758 P.T.14031, Tempat Taman Kepong Indah, Mukim Batu, Daerah Kuala Lumpur” on the said Land (‘said Development’). [11] In consideration of MAIWP’s agreement to enter into the JVA and in providing the covenants therein, Johawaki agreed to bear all costs of the said Development and to pay MAIWP the sum of RM18,140,000.00 for the value of part of the said Land where the IKB will be built, and RM39,690,000.00 for the value of IKB which will be built by Johawaki in accordance to the approved plans and 8 specifications. The total amount to be paid to MAIP according to the JVA is thus RM57,830,000.00. [12] In so far as Johawaki’s obligations are concerned, the JVA provides, inter alia, that Johawaki is responsible for the management, marketing and sale of the said Development, save for IKB, and the successful execution, construction and completion of the same. In addition, Johawaki shall apply and obtain the necessary approval or permission from the relevant authorities as defined under the JVA for the said Development, including for conversion of land use or to apply for amendment of any express condition or restriction in interest endorsed on, or referred to in, the document of title to the said Land. [13] In accordance with its obligation under the JVA, Johawaki had, vide letter dated 6.2.2006 from the architect to Pengarah, Jabatan Perancang Bandar, Dewan Bandaraya Kuala Lumpur (‘DBKL’) submitted the documents for purposes of obtaining the planning approval. DBKL had considered Johawaki’s application in a meeting on 5.7.2006, and by a letter dated 27.7.2006 to the architect, DBKL conveyed the decision taken at the meeting viz. “… permohonan ini 9 ditangguhkan untuk mendapatkan terlebih dahulu ulasan daripada Jawatankuasa Tanah Wilayah Persekutuan mengenai projek usahasama … Cadangan pembangunan perumahan dan perdagangan ini didapati bercanggah dengan tujuan asal kerajaan menganugerahkan tanah tersebut kepada Majlis Agama Islam Wilayah Persekutuan. …” (exhibit “P-5” at pp 260 - 261 and 263 - 264, Enclosure 2). [14] It appears that Jawatankuasa Kerja Tanah Wilayah Persekutuan (‘JKT WPKL’) in its meeting on 22.12.2006 had requested MAIWP to “memperhalusi semula bentuk dan nilai pulangan yang akan diterima” and/ or “memperhalusi semula cadangan pembangunan dan penukaran syarat nyata tanah tersebut kerana MAIWP akan kehilangan tanah yang luas” (refer Johawaki’s letter dated 24.11.2007 to MAIWP at pp 278 - 279 and MAIWP’s letter dated 9.4.2008 to PTG KL at pp 285 - 286 in exhibit “P-5”). [15] Apart from the JKT WPKL meetings, there were additionally decisions taken at the Mesyuarat Jawatankuasa Pembangunan dan Pelaburan, 10 MAIWP (‘JPP’) and Mesyuarat MAIWP. The long and short of it is that Johawaki was asked to review –

the said Development;

the amendment of the express condition endorsed on the document of title to the said Land to cater for the proposed mixed development; and

the returns to MAIWP due to, inter alia, the change in the status of the said Land from leasehold to freehold. [16] Following from the letters sent by MAIWP, Johawaki submitted its first offer to increase the profits to MAIWP in the sum of RM65,403,500.00 on 13.2.2007, and second offer of RM66,783,500.00 on 21.1.2008. The second offer was accepted by MAIWP vide letter dated 27.2.2008. However, Johawaki claimed that by another letter dated 11.6.2008, MAIWP had a change of mind and again asked for a further increase in the share of profits. 11 [17] MAIWP had in fact informed Johawaki vide letter dated 30.10.2007 that the said Development cannot proceed “… kerana kegagalan mendapatkan kelulusan penukaran syarat kegunaan tanah Jawatankuasa Kerja Tanah Wilayah Persekutuan Kuala Lumpur”, and that MAIWP at its 99th Meeting on 12.2.2007 had decided not to proceed with the said Development and instead planned to develop Kompleks Pendidikan Islam MAIWP on the said Land whereby Johawaki could apply to be the contractor, if interested (p 276 exhibit “P-5”). The seeds of dispute had thus been planted. [18] Despite attempts to resolve the issues, problems and challenges, where Johawaki even wrote letters to the Prime Minister of Malaysia dated 3.9.2007 (pp 274 - 275 exhibit “P-5”), and to the Minister in the Prime Minister’s Department in charge of Islamic Affairs dated 4.6.2008, 12.12.2008, 23.6.2011 and 28.5.2012 (pp 289, 298 - 300, 308 - 311 and 322 - 323 exhibit “P-5”), these were of no avail. [19] In the letter dated 3.10.2011 from the Federal Territories Director of Lands and Mines Office (‘PTG KL’) to MAIWP, with the said 12 Development and “Permohonan Kelulusan Jawatankuasa Kerja Tanah Wilayah Persekutuan Kuala Lumpur (JKT WPKL) Untuk Menukar Syarat Nyata Tanah” as its title (p 203 exhibit “P-3”), and apparently in reply to MAIWP’s letter dated 23.8.2011, PTG KL informed that: “2. … pihak kami telah menyemak dokumen permohonan yang dikemukakan. Walau bagaimanapun, permohonan ini masih tidak dapat diproses kerana dokumen-dokumen berikut seperti yang disenaraikan perlu dikemukakan;

Surat kebenaran daripada pemegang kaveat persendirian

(ii) Surat kelulusan Perintah Pembangunan / surat pengesahan zoning daripada Dewan Bandaraya Kuala Lumpur

(iii) 21 salinan pelan tapak yang telah ditandatangani dan dimetrai oleh pemohon. …”. 13 [20] The private caveat as mentioned in aforesaid letter was lodged by Johawaki on 24.10.2008 (pp 294 - 297 exhibit “P-5”) so as to protect its rights under the JVA. [21] Subsequently, MAIWP wrote to Johawaki on 11.10.2011 (pp 312 - 313 exhibit “P-5”) requesting that Johawaki issue a letter of permission in its capacity as caveator to be addressed directly to PTG KL to enable MAIWP to submit Form 19 under the National Land Code [Act 56 of 1965] (‘NLC’) to apply to amend the express condition on the said Land. [22] However, Johawaki in its reply letter dated 3.11.2011 (p 314 exhibit “P-5”) sought confirmation from MAIWP that “… dengan surat kebenaran yang dipohon dari Johawaki bermaksud MAIWP telah memutus untuk mengekalkan keperluannya bersesuaian dengan persetujuan menerima tawaran pulangan tambahan dari Johawaki yang diberikan sebelum ini” (‘said Confirmation’). 14 [23] MAIWP retorted that by virtue of Clause 5.1(a)(iii) of the JVA, it is Johawaki’s responsibility to apply to PTG KL to amend the express condition on the said Land and that “Tindakan MAIWP mengemukakan permohonan tersebut kepada PTG adalah bertujuan memudahkan urusan permohonan semata-mata.”. As for Johawaki’s request for the said Confirmation, MAIWP stated that it was “… di luar tanggungjawab MAIWP untuk berbuat demikian. Tindakan MAIWP mengemukakan permohonan tukar syarat nyata tanah adalah selaras dengan Perjanjian Usahasama yang telah dimeterai dan tanpa prasangka kepada mana-mana peruntukan di dalam Perjanjian Usahasama tersebut, tertakluk kepada kelulusan dari PTG bagi maksud tukar syarat nyata tanah.” (refer MAIWP’s letter dated 2.12.2011 at pp 315 - 316 exhibit “P-5”). [24] Despite a discussion between the parties that took place on 16.1.2012 (see the Notes of Discussion at pp 317 - 318 exhibit “P- 5”), MAIWP claimed that Johawaki’s failure in complying with the conditions as imposed by PTG KL is tantamount to a breach of the JVA. A letter dated 21.3.2012 (refer exhibit “P-3” in Johawaki’s AIS 15 for the Enforcement Application at pp 204 - 205 Enclosure 2) was then sent requiring Johawaki to remedy the alleged breach within 60 days, failing which MAIWP will invoke Clause 8 in the JVA to terminate the JVA without any further notice to Johawaki. [25] By a letter dated 26.6.2012 from MAIWP’s solicitors to Johawaki (pp 324 - 325 exhibit “P-5”), MAIWP terminated the JVA pursuant to Clause 8 of the JVA. Johawaki’s solicitors responded vide letter dated 12.7.2012 (p 326 exhibit “P-5”) that Johawaki does not accept the purported termination of the JVA. [26] MAIWP then commenced arbitration. In its Statement of Claim (‘SoC’) dated 13.3.2013 (see the Bundle of Pleadings at the arbitration at pp 135 - 159 in exhibit “P-2”, Enclosure 2), MAIWP prayed for a declaration that the termination of the JVA is valid and effective, and for general damages to be paid by Johawaki for the breach of the JVA. [27] Johawaki filed its Defence and Counterclaim, which was re-amended on 16.4.2014, for an order for specific performance of the JVA, actual 16 losses in the sum of RM6,237,316.32 and loss of profit to be assessed (pp 146 - 153 exhibit “P-2”). [28] On 14.12.2018, the learned Arbitrator made the following award: “11.1 In the light of matters and the decision on the findings I have made, I now make an award as follows:-

The claim of the Claimant against the Respondent is dismissed with Costs;

Claimant to pay the Respondent Costs of RM50,000.00 to the Respondent;

Claimant to pay the Costs of the AIAC (KLRCA) in accordance with the KLRCA Rules for payment due to the AIAC, the amount deposited with Kuala Lumpur, Regional Centre for Arbitration to be used for this purpose;

Claimant to pay the Costs of the Arbitrator Fee in accordance with the KLRCA Rules including expenses and disbursements incurred by the Arbitrator, the 17 amount deposited with Kuala Lumpur Regional Centre for Arbitration to be used for this purpose;

11.2 Similarly in the light of finding make by me:-

The Claimant to pay the Respondent the sum of RM119,869,718.47 as damages made up of special damage in the sum of RM12,622,275.43 and general damages in the sum of RM107,247,443.04;

Interest at the rate of 5% per annum from the date of the filing of the Respondents Statement of Defence and Counterclaim to the date of payment;

11.3 Pursuant to the above, I further direct the Claimant to pay the sums award under the above paragraphs within thirty (30) days of the date of this Award.”. [29] It should be mentioned that the learned Arbitrator wrote the Award in both the national language and English language (see pp 75 - 101 and 102 - 131, respectively in exhibit “P-1”, Enclosure 2). This was explained in the Award under the sub-heading “Language and Proceedings”: 18 “2.2 Of course, there was a request made that a copy of the award be translated into English. In this regard, I informed the parties that I will write the award myself both in English and Malay. This would dispense the need for a third party and a translator who may not capture the essence of the entire matter.”. [30] However, I noticed that there are parts in the English text of the Award that have not been translated from the national language to English. Nevertheless, for purposes of my grounds of decision, I shall make reference to the English text of the Award.

(A) O.S. No. WA-24C(ARB)-12-03/2019: Setting Aside Application [31] The various grounds on which an arbitral award may be set aside are provided in s 37 AA 2005 as follows: “Application for setting aside

(1) An award may be set aside by the High Court only if— 19

the party making the application provides proof that—

a party to the arbitration agreement was under any incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of Malaysia;

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present that party’s case;

(iv) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;

subject to subsection (3), the award contains decisions on matters beyond the scope of the submission to arbitration; or 20

(vi) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Act; or

the High Court finds that—

the subject matter of the dispute is not capable of settlement by arbitration under the laws of

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

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

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

a breach of the rules of natural justice occurred— 21

during the arbitral proceedings; or

(ii) in connection with the making of the award.

Where the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside.”. [32] Specifically, para 37(1)(a) AA 2005 deals with six grounds which imposes the burden of proof on the applicant while para 37(1)(b) provides two grounds where the High Court may of its own volition order an arbitral award to be set aside. Sub-s 37(2) AA 2005 clarifies that awards induced or affected by fraud or corruption and awards made in breach of the rules of natural justice are deemed to be contrary to the public policy of Malaysia. Sub-s 37(3) is particularly relevant to applications to set aside awards under subparas 37(1)(a)(iv) and (v), where part of the award being challenged is capable of severance (see The Arbitration Act 2005: UNCITRAL Model Law as applied in Malaysia by Sundra Rajoo and WSW Davidson, Sweet & Maxwell Asia, 2007 at pp 168 - 169, 175 and 178, 22 and Law, Practice and Procedure of Arbitration (Second Edition) by Datuk Professor Sundra Rajoo, Lexis Nexis, 2017 at p 753). [33] In Arbitration in Malaysia: A Practical Guide, Editor-in-Chief The Right Honourable Tun Ariffin Zakaria, General Editors Datuk Professor Sundra Rajoo and Philip Koh, and a team of expert contributors, Sweet & Maxwell, 2016, Dato’ Mohamad Ariff bin Md Yusof who contributed the chapter on “Challenge of Arbitral Awards” opined at p 365 that: “[14.021] The opening statutory words in section 37(1) of the Arbitration Act 2005 read: “An award may be set aside by the High Court only if …” ... This formulation recognises the discretionary element reposed in the High Court (a matter alluded to earlier in this chapter) in addition to the important element of the limited list of rounds available. The section also draws a distinction in terms of where “the party making the application” provides “proof” (section 37(1)(a)) and where “the High Court finds” (section 37(1)(b)). Technically, the grounds under section 37(1)(b) can be raised by the High Court on its own initiative, but in practice a more likely scenario will be for the applicant party itself to raise these grounds.”. 23 [34] In view of the rather extensive reliefs sought by MAIWP by virtue of this O.S., the prayers are set out in full below for ease of reference: “(a) That the Award be set aside pursuant to sections 37(1)(b)(ii) and 37(2)(b)(i) and (ii) of the Arbitration Act 2005 premised on the ground that the Award, in particular paragraphs 6.3 to 6.10 and paragraphs 10.1 to 11.3 of the Award thereof is in conflict with the public policy of Malaysia and/or that there is a breach of the rules of natural justice occurred during the arbitral proceedings and/or in connection with the making of the award;

That pursuant to sections 37(i)(a)(v) and 37(3) of the Arbitration Act 2005 that part of the Award be set aside, in particular paragraphs 6,3 to 6.10 and paragraphs 10.1 to 11.3 of the award, on the ground that the said paragraphs contained decisions on matters beyond the scope of submission to arbitration;

That an extension of time be granted to refer questions of law pursuant to section 42 of the Arbitration Act 2005; 24

That there are questions of law which arise on the face of the Award to be determined by this Honourable Court pursuant to Section 42 of the Arbitration Act 2005 and that the Award:- i) To be varied under Section 42 of the Arbitration Act 2005; ii) To be remitted in whole or in part, together with the High Court’s determination on the question of law to the arbitral tribunal for reconsideration pursuant to the Section 42 of the Arbitration Act 2005; and /or iii) To be set aside, in whole or in part pursuant to the Section 42 of the Arbitration Act 2005.

A stay on the enforcement of interest to be imposed on the Award pending this Honourable Court’s determination of Plaintiff’s application herein;

Consequent to prayers (a), (b), (c) and/or (d) above, that the granting of the sum of RM119,869,718.47 and interest of 5% per annum thereon in favour of the Defendant be set aside; 25

Costs of this application to be borne by the Defendant; and

Such further or other relief/order as this Honourable Court deems fit and proper.”. MAIWP’s Principle Contentions [35] In its submissions, MAIWP recognised that the intention underlying AA 2005 is non-interventionist as exemplified by s 8 which states that “No court shall intervene in matters governed by this Act, except where so provided in this Act.”. This reminder was also borne out throughout Johawaki’s submissions and therefore, it bears relevance to state that this Court is certainly mindful of the spirit and philosophy of non-interference in enacting AA 2005, and the background policy of encouraging arbitral finality and minimalist intervention approach as stated in many decisions of high authority. However, MAIWP was quick to argue that the intention as aforesaid must give way to the 26 express provisions of AA 2005 which allow the Court to step in and intervene under ss 37 and 42, if the situation warrants it. [36] MAIWP’s principle contentions as to why the Award ought to be set aside under s 37 AA 2005 are set out below:

the Award dealt with a dispute not contemplated by, or not falling within, the terms of submission to arbitration when the learned Arbitrator awarded special damages which exceeded the pleaded damages by Johawaki;

there was a breach of natural justice in connection with the making of the Award when the learned Arbitrator exercised its discretion to allow Johawaki’s claim for special damages despite recognising the same was not strictly proven;

the Award dealt with matters which were not contemplated within the terms of submission to arbitration and there has been a breach of natural justice in connection with the making of the Award when the learned Arbitrator – 27

made an arbitrary discount of 25% on the defective expert evidence based on his own theorising which was not submitted and argued by the parties and in doing so, failed to invite parties to submit upon the extraneous evidence; and

(ii) decided on Johawaki’s unpleaded defence, notwithstanding MAIWP’s objection, and failed to address the pleaded claim and defence put forth by the parties; and

the Award is in conflict with the public policy of Malaysia –

in the sense that the Award was induced or affected by fraud and/or fraudulent and egregious misrepresentation which is evinced by Johawaki’s expert evidence on loss of profit which deviates substantially from Johawaki’s contemporaneous documents; and 28

(ii) when the learned Arbitrator had granted damages both wasted expenditure and loss of earnings, thus double-compensating and unjustly enriched Johawaki. [37] Apart from the aforesaid, MAIWP further contended that the learned Arbitrator had erred in deciding the following questions of laws arising out of the Award:

Whether Johawaki is entitled to recover both wasted expenditure (in the form of Development Costs) as well as Loss of Profit in the circumstances of the case?

Whether the Learned Arbitrator is entitled to found in favour of the Defendant on Defendant’s unpleaded case, notwithstanding that the Evidence Act 1950 does not apply in arbitration? 29 The Legal Principles [38] Before I embark on my analysis of MAIWP’s grounds of challenge against the Award, it is useful at the inception to recall the germane legal principles in an application to set aside an arbitral tribunal’s award premised on sub-paras 37(1)(a)(v); 37(1)(b)(ii); 37(2)(b)(i) and

(ii); and sub-s 37(3) AA 2005. [39] The appeal to the Court of Appeal in Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLRA 219 concerned an application to set aside an arbitration award under similar provisions as the present case before this Court i.e., ss 37 and 42 AA 2005, and specifically subparas 37(1)(b)(ii) and para 37(2)(b). The Court made several observations as regards the terms of s 37 AA 2005 in paras 24 - 27 of the judgment and recounted the approach of the High Court in dealing with the ground of conflict with the public policy of Malaysia in paras 30 - 39. In stating the latter, the Court referred to the decision of the Court of Appeal in Petronas Penapisan (Melaka) Sdn Bhd v 30 Ahmani Sdn Bhd [2016] 3 CLJ 403 and agreed with the views expressed in that case, namely –

where the award conflicts with the public policy of Malaysia for the reason of there being a breach of the rules of natural justice, it is the whole award which will be set aside and not merely a part of it;

the threshold to satisfy under s 37 AA 2005 is very low as compared to that under s 42, though the courts are slow in setting aside an award, and upon proof, if successful, the court has an option, at either party’s behest, to send back the matter to the arbitral tribunal to eliminate the grounds for setting aside, as set out in sub-s 37(6) AA 2005; and

the threshold to be met under subpara 37(1)(b)(ii) or sub-s 37(2) is on a balance of probabilities that there has been a breach of the rules of natural justice either during the arbitral proceedings or in connection with the making of the award. 31 [40] The Court of Appeal also held that there is no requirement for proof of actual or real prejudice to be met where reliance is placed on subpara 37(1)(b)(ii) read with para 37(2)(b) AA 2005. As for the provision in para 21(3)(b) and s 20 AA 2005, the Court opined that although an arbitrator has the power to draw from his own knowledge and expertise, this power must be read with the arbitrator’s overarching duty to act fairly and in accordance with the rules of natural justice. The said duty is a continuous duty, consistent with the universal concept of fair play that permeates and prevails throughout the whole arbitral process. The parties must be given a reasonable opportunity to present their case or arguments, including supporting or rebuttal evidence on any live issue in the arbitration irrespective of whether the issue was brought up by the parties or the arbitrator. Further, the Court agreed with the ratio in Trustees of Rotoaira Forest Trust v Attorney General [1999] 2 NZLR 452 that, unless there is express or implied agreement to the contrary, the arbitrator is precluded from taking into account evidence or argument extraneous to the hearing without giving the parties further notice and the opportunity to respond. 32 [41] Apart from the judgment in Sigur Ros, the recent decision of the Federal Court in Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 provides useful guidance as the appellants in that case had also complained that the arbitral award was in conflict with the public policy of Malaysia and/or the rules of natural justice under sub-paras 37(1)(b)(ii) and 37(2)(b)(ii) AA 2005. These same provisions are being relied upon by MAIWP. Ramly Ali FCJ delivered the judgment of the Court and at pp 427 - 430 expounded that: “[49] The term ‘public policy’ is not defined in the AA 2005. However, the term appears in three different sections, namely of ss 4, 37 and 39 of the AA 2005. As commonly used, the term ‘public policy’ signifies some matter which concerns public good and public interest. It is a fundamental principle of justice in substantive and procedural aspects. … 33 [52] The term ‘public policy’ as appears in s 37(1)(b)(ii) of the AA 2005 covers a scope of ‘public policy’ elements as used generally. However, in s 37(2)(b)(ii) the scope is more specific. It specifically categorises a breach of the rules of natural justice which occurred in connection with the making of an award as being in conflict with the public policy of Malaysia. [53] The decision of the Singapore Court of Appeal in PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR 597, provides a good guidance on the interpretation of the term ‘public policy’ in an application to set aside an arbitral award made by a tribunal, on the ground of a breach of the rule of natural justice for being in conflict with the public policy. In that case Chan Sek Keong CJ (delivering the judgment of the court) ruled: Although the concept of public policy of the State is not defined in the Act or the Model Law, the general consensus of judicial and expert opinion is that public policy under the Act encompasses a narrow scope. In our view, it should only operate in instances where the upholding of an arbitral award would ‘shock the conscience’ (see Downer Connect (58) at (136), or is ‘clearly injurious to the public good or … wholly offensive to the ordinary reasonable and fully informed 34 member of the public’ (see Deutsche Schachbau v Shell International Petroleum Co Ltd [1987] 2 Lloyds Rep 246 at 254, per Sir John Donaldson MR), or where it violates the forum’s most basic notion of morality and justice: see Parsons & Whittemore Overseas Co Inc v. Societe Generalede L’Industrie du Papier (RAKTA) 508 F 2d 969 (second Cir, 1974) at 974. [54] In a recent case of Sigur Ros Sdn Bhd v MasterMulia Sdn Bhd [2018] 3 MLJ 608; [2018] 3 MLRA 219, the Court of Appeal held, inter alia, that a breach of the rules of natural justice that occurred in an arbitral proceedings which has a real and substantial impact on the outcome of the arbitration and the eventual award rendered, is plainly said to be in conflict with the public policy of Malaysia. [55] Section 37(2)(b)(ii) of the AA 2005 provides that an award made by an arbitral tribunal would be in conflict with the public policy of Malaysia if a breach of the rules of natural justice occurred in connection with the making of the award. The circumstances stated in s 37(2) are by no means exhaustive. Other appropriate circumstances may also fall under the category of ‘public policy’ in view of the opening phrase ‘without limiting the generality of sub-para (1)(b)(ii)’ as appears in s 37(2) of 35 the AA 2005. However, it must be appreciated that the concept of public policy generally is itself a broad concept. But in applying the concept for the purpose of setting aside an award under s 37 of the AA 2005, the concept of public policy ought to be read narrowly and more restrictively. The court’s intervention should be sparingly used. The court must be compelled that a strong case has been made out that the arbitral award conflicts with the public policy of Malaysia. As clearly stated by the Court of Appeal in Sigur Ros (with which we agree): ‘The concept of public policy must be one taken in the higher sense where some fundamental principle of law or justice is engaged, some element of illegality, where enforcement of the award involves clear injury to public good or the integrity of the court’s process or powers will be abused’. … [58] The scope of public policy ground for setting aside an arbitral award could only be invoked in deserving case ie in instances where it appears a violation of the most basic notions of morality and justice. It covers fundamental principles of law and justice in substantive as well as procedural respect. Instances where the upholding of an arbitral award would shock the conscience, or clearly 36 injurious to the public good, or wholly offensive to the ordinary reasonable and fully informed member of the public, had been held by courts in various jurisdiction to fall within the category of public policy ground for setting aside an arbitral award. Thus, instances such as ‘patent injustice’, ‘manifestly unlawful and unconscionable’, substantial injustice’, ‘serious irregularity’ and other similar serious flaws in the arbitral process and award, would also fall within the applicable concept of public policy and therefore by virtue of s 37(1)(b)(ii) of the AA 2005 when proven, can be a ground for the court to exercise its discretion to set aside the award (see: Ajwa for Food Industries). Such instances fall within ‘the basic and fundamental notions or principles of justice’. The court must adopt the principle as laid down by Howard M Holtzmann and Joseph E Neuhans as found in their commentary in A Guide to the UNCITRAL Model on International Commercial Arbitration: Legislative History and Commentary ‘that the term ‘public policy’ which was used in the 1958 New York Convention and many other treaties, covered fundamental principles of law and justice in substantive as well as procedural respects’. The terms ‘patent injustice’ or ‘substantial injustice’ or ‘manifestly unlawful and unconscionable’ as often used by the court in setting aside arbitral awards, do not mean injustice which is more than de minimis; what is required is that the injustice had real effect 37 and had prejudiced the basic right of the applicant (see: Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86).” (emphasis added). [42] With the aforesaid well imbedded legal principles in mind, I will now proceed to deal firstly, with the issue related to the part of the Award on liability and thereafter, the other issues which pertain to the Arbitrator’s assessment of the quantum of damages, and finally the issue of reference of questions of law under s 42 AA 2005. ISSUE ON LIABILITY: Arbitrator Decided On Unpleaded Case/ New Issue MAIWP’s Submissions [43] MAIWP took the position that the termination of the JVA was valid and Johawaki’s failure to obtain the requisite approvals or permissions from the relevant authorities in accordance with Clause 38

5.1 in the JVA amounted to a breach which entitled MAIWP to exercise its right to terminate the same under Clause 8. [44] Based on its Re-Amended Statement of Defence, Johawaki contended that the parties had agreed to vary the terms of the JVA to the extent that it then became MAIWP’s obligation to make the necessary applications to the relevant authorities. However, in its submission, Johawaki is said to have departed from its pleadings and raised for the first time that Johawaki’s responsibility was only to make the application to the relevant authorities and not to obtain approval of the same. Mr. Alan Wong submitted that, despite the objection that was made in MAIWP’s Submission In Reply dated 22.3.2018 to Johawaki’s change of stance, the Learned Arbitrator neglected, refused and/ or failed to address the objection and went on a frolic of his own to ultimately conclude that Clause 5.1 only relates to the making of an application to, and not obtaining an approval from, the relevant authorities. [45] MAIWP additionally submitted that the Arbitrator failed to decide on Johawaki’s pleaded case as to whether there was in fact a “switch in 39 obligation” to secure the necessary approvals from the relevant authorities. Instead, the Arbitrator speculated on whether approval could be obtained if Johawaki had pursued the application when this was never the parties’ case. [46] Learned counsel asserted that parties must be bound by their respective pleadings and the Arbitrator must decide within the ambit of such pleadings. In deciding on Johawaki’s unpleaded defence, MAIWP was taken by surprise and was deprived of the opportunity to adduce evidence to rebut the argument and was therefore, denied the right to a fair hearing. Furthermore, it was contended that the learned Arbitrator’s decision on the new issue raised in Johawaki’s submission is tantamount to a decision on a “new difference” within the meaning of cases such as Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126. [47] In the circumstances, MAIWP argued that there is a breach of natural justice in the making of the Award where the learned Arbitrator had taken irrelevant matters into consideration and failed to take into account the relevant matters. 40 Johawaki’s Submissions [48] Mr. Robert Lazar submitted that if the pleadings, evidence and submissions in the arbitral proceedings are scrutinised, it will become clear that the matters complained of by MAIWP are in fact part of the learned Arbitrator’s remit and upon which he made his findings. The nature of the obligation to obtain the necessary approvals is a question of law dependent on a matter of interpretation of the JVA and the parties’ obligations in contract. Johawaki had submitted accordingly in this regard i.e., that the only obligation pursuant to Clause 5.1 of the JVA was an obligation to make the applications to the relevant authorities. [49] It was contended that the learned Arbitrator had interpreted the JVA and considered the submissions before answering the core issue as to whether MAIWP had validly terminated the JVA in favor of Johawaki. MAIWP therefore cannot fault the Arbitrator’s findings as going on a frolic of his own and nor did he rely on a “new difference” irrelevant to the arbitral proceedings. 41 [50] In the final analysis, Johawaki emphasised that MAIWP is actually inviting the Court to examine the merits of the Award, which is not allowed in an application pursuant to s 37 AA 2005. The Court can neither usurp the position of the Arbitrator in determining the merits of the dispute nor substitute its own interpretation of the law and facts, especially when the parties have agreed to accept the Award as final and conclusive as provided in Clause 9.13(d) of the JVA. Findings of the Court [51] There are several Clauses in the JVA that require closer examination, not merely for this sole issue on liability, but across the board in respect of the other issues on quantum of damages. These are set out in full below in the order as they appear in the JVA. [52] Firstly, the words “Petak tersebut” is defined in Clause 1.11 in the JVA as “sebahagian daripada Tanah tersebut yang lebih khusus ditandakan dan berlorek HIJAU dalam Pelan Tapak yang dikepilkan 42 sebagai Jadual Ketiga dengan kelulusan lebih kurang 7.126 ekar di mana Institut Kemahiran Baiulmal akan didirikan.”. Secondly, the provision on consideration states: “4. BALASAN

4.1 PULANGAN TUAN PUNYA Pihak-pihak di dalam Perjanjian ini bersetuju bahawa sebagai balasan kepada persetujuan Tuan punya untuk memasuki Perjanjian ini dan memberi akujanji kepada waad-waad dan kewajipan yang terdapat di dalamnya (termasuk membenarkan Pemaju untuk memulakan Pembangunan tersebut ke atas Tanah tersebut tertakluk kepada terma-terma dan syarat-syarat di dalamnya), maka nilai pulangan Tuan punya akan berjumlah sebanyak RINGGIT MALAYSIA LIMA PULUH TUJUH JUTA LAPAN RATUS TIGA RIBU SAHAJA (RM57,830,000.00) dan akan mengambil bentuk seperti berikut:

Nilai Petak tersebut di mana Institut Kemahiran Baitulmal akan didirikan … RM18,140,000.00

(ii) Nilai Institut Kemahiran Baitulmal 43 yang akan didirikan di atas Petak tersebut oleh Pemaju mengikut Pelan-pelan dan spesifikasi yang diluluskan oleh Pihak Berkuasa Yang Berkenaan dan merukpakan bangunan-bangunan kosong tanpa sebarang lekapan dan kelengkapan … RM39,690,000.00 Jumlah RM57,830,000.00” [53] Thirdly, for present purposes, the relevant Clauses relating to the submission of applications to “Pihak Berkuasa Yang Berkenaan”, which is defined in Clause 1.12 as “… mana-mana pihak berkuasa yang diberi kuasa di bawah mana-mana undang-undang yang berkuatkuasa di Malaysia untuk meluluskan menguatkuasakan dan/atau mengatur mana-mana perkara berkaitan dengan Pembangunan tersebut, dan meliputi mana-mana kerajaan, kementerian samada persekutuan atau negeri, quasi kerajaan dan/atau perbadanan-perbadanan, jabatan-jabatan dan agensi-agensi persendirian yang dilesenkan oleh Pihak Berkuasa Yang Berkenaan”, are as follows: 44 “4.2 PETAK TERSEBUT

Kelulusan Pihak Berkuasa Yang Berkenaan Pemaju akan dalam tempoh tiga (3) bulan dari tarikh Perjanjian ini ditandatangani dengan kos dan perbelanjaannya sendiri menyerahkan permohonan pertukaran kategori penggunaan tanah dan selepas permohonan pertukaran kategori tersebut diluluskan oleh Pihak Berkuasa Yang Berkenaan, Pemaju akan dengan kos dan perbelanjaannya sendiri menyerahkan permohonan untuk kelulusan Pelan Susun Atur dan permohonan untuk pecah bahagi Tanah tersebut mengikut Pelan Susun Atur yang diluluskan.

Dokumen hakmilik berasingan/pindah milik Pemaju akan dengan kos dan perbelanjaannya sendiri memperoleh pengeluaran dokumen hakmilik berasingan bagi Petak tersebut. … …

5.1 PERMOHONAN MENDAPATKAN KELULUSAN 45

Pemaju perlu memohon dan mendapatkan kelulusan atau kebenaran yang perlu atau wajib daripada Pihak berkuasa Yang Berkenaan berkaitan dengan Pembangunan tersebut dan perlu mengambil langkah-langkah tersebut:-

menyebabkan semua pelan dan spesifikasi (termasuk pelan jalanraya parit, pembetung, tempat pembuangan sampah, dan bekalan elektrik dan air) disediakan oleh arkitek yang munasabah, mengemukakan kepada Pihak Berkuasa Yang Berkenaan untuk mendapatkan kelulusan;

(ii) memastikan Tanah tersebut diukur dan mendapatkan kelulusan Pihak Berkuasa Yang Berkenaan bagi memecah-bahagi Tanah tersebut kepada Petak tersebut dan lot-lot bangunan yang lain mengikut Pelan Susun Atur yang diluluskan bagi tujuan, inter-alia, mendapatkan hakmilik berasingan bagi Petak tersebut dan lot-lot bangunan tersebut;

(iii) sekiranya perlu, memohon kepada Pihak Berkuasa Yang Berkenaan untuk perubahan 46 mana-mana jenis penggunaan tanah yang Tanah tersebut pada masa kini tertakluk atau memohon untuk pemindaan apa-apa syarat nyata atau sekatan kepentingan yang tercatitera di atas, atau di sebut di dalam dokumen hakmilik Tanah tersebut.

Sekiranya Tuan punya telah melakukan mana-mana daripada tindakan yang dinyatakan di dalam Fasal 5.1(a) di atas, maka Pemaju perlu memberi akujanji untuk meneruskan tindakan tersebut. …

6.1 PENYERAHAN SURATAN HAKMILIK Apabila sahaja Perjanjian ini ditandatangani, Tuan punya akan menyerahkan Suratan Hakmilik Asal (selepas ini dipanggil “Suratan Hakmilik”) Tanah tersebut kepada Pemaju untuk disimpan bagi tujuan perlaksanaan Perjanjian ini. Apabila diperlukan Suratan Hakmilik tersebut hendaklah dikemukakan kepada Pihak Berkuasa Yang Berkenaan untuk tujuan perubahan mana-mana jenis penggunaan tanah yang Tanah tersebut pada 47 masa kini tertakluk atau untuk pemindaan apa-apa syarat nyata atau sekatan kepentingan yang tercatitera di atas, atau di sebut di dalam Suratan Hakmilik dan atau pecah-bahagi Tanah tersebut di mana Pemaju diberi kuasa untuk mengemukakan Suratan Hakmilik tersebut untuk pengeluaran dokumen hakmilik berasingan bagi Petak tersebut dan lot-lot bangunan yang telah dipecah-bahagi (kemudian daripada ini disebut “hakmilik berasingan”)….”. (emphasis added). [54] The core provision governing termination of the JVA due to the default of Johawaki is Clause 8 and it reads: “8. PENAMATAN PERJANJIAN

gagal menjalankan keseluruhan Pembangunaan tersebut tanpa sebab yang munasabah; atau 48

dibubarkan samada secara paksa atau sukarela (kecuali bagi tujuan penstrukturan semula, penyatuan atau lain-lain tujuan yang sama yang tidak melibatkan penghasilan asetnya) atau menjadi tidak solven atau membuat apa-apa komposisi atau perkiraan dengan pemiutang-pemiutangnya; maka di dalam keadaan tersebut, Tuan punya perlu memberi notis enam puluh (60) hari kepada Pemaju untuk membetulkan kesilapan tersebut dan sekiranya selepas tamat tempoh tersebut, kesilapan tersebut masih tidak dibetulkan, maka: (aa) Perjanjian ini boleh ditamatkan oleh Tuan punya dengan memberikan notis bertulis kepada Pemaju (penamatan tersebut hendaklah berkuatkuasa tanpa prejudis terhadap hak mana-mana pihak bagi perlanggaran terdahulu) DENGAN SYARAT (i) Tuan punya hendaklah mengembalikan dan membayar kepada Pemaju semua Perbelanjaan Pembangunan mengikut dasar quantum meruit yang telah dibayar oleh Pemaju berkaitan dengan Pembangunan tersebut dan

(ii) Pemaju hendaklah membayar semua kos untuk 49 pelepasan gadaian sekiranya Tanah tersebut dicugarkan oleh Pemaju; atau (bb) Tuan punya boleh mengambil tindakan undang-undang untuk menguatkuasakan perlaksanaan spesifik mengikut Perjanjian ini terhadap Pemaju. (emphasis added). [55] The term “Perbelanjaan Pembangunan” is defined in Clause 1.9 as “… semua kos dan perbelanjaan yang timbul atau kena dibayar yang berkaitan dengan Pembangunan tersebut termasuk tanpa had kos pembinaan, cukai tanah, penilaian, yuran perhitungan, yuran professional perunding, yuran guaman, insurans, perbelanjaan promosi dan pemsaran, kos pembiayaan pinjaman, kos pengurusan dan kewangan, dan lain-lain kos dan perbelanjaan secara langsung atau secara tidak langsung yang berkaitan dengan Pembangunan tersebut.”. 50 [56] Turning next to the pleadings, in paras 9 and 10 of the SoC, MAIWP referred to the letter from PTG KL dated 3.10.2011 and alleged that Johawaki failed and/ or was negligent in fulfilling the conditions as determined by PTG KL. This failure is said to amount to a breach of Clause 5.1 in the JVA. [57] Johawaki’s response are in the following paras from its Re-Amended Statement of Defence: “3. Paragraph 8 is admitted only to the existence of clause 5.1. in the Agreement. The Respondent will however contend that on or about the 27-2-2008, the parties hereto agreed to vary the terms of the Agreement and in particular clause 5.1 to the extent that the parties agreed that the responsibility for obtaining the requisite approvals or permissions would now be undertaken by the Claimant who as the registered proprietor was the correct entity in any event and in whose name any such application would have to be made. To this extent the Claimant then proceeded to do the following which will show the extent of the variation agreed to by the parties hereto: 51 Particulars of Variation i. The Claimant vide their letter dated 9-4-2008, have made an application to the Director of Office of Lands and Mines, Federal Territory of Kuala Lumpur requesting for cancellation of express condition and imposition of new express condition on the said Land; ii. The Claimant vide their letter dated 16-4-2008 addressed to the Director of Office of Lands and Mines, Federal Territory of Kuala Lumpur requesting for approval for the change of the express condition of the said Land; iii. The Claimant vide their letters dated 4-10-2010 and 18-1-2011 addressed to the Director of Office of Lands and Mines, Federal Territory of Kuala Lumpur inquiring the status of their application for the change of the express condition of the said Land;

Further and in the alternative, the Respondent will contend that the conduct of the Claimant in submitting the application for the required approval and 52 authorization from relevant authority pertaining to the said development caused the Respondent not to undertake the necessary action in applying for the said approvals and that by reason of such conduct the Respondent relied on the Claimant’s conduct. The Respondent will contend that the Claimant is therefore estopped from now attempting to rely on clause 5.1 of the said Agreement. …

The Respondent has no knowledge about paragraphs 9 and 10. The Respondent furthermore denies that they have failed and/ or neglected to fulfil the conditions imposed by the Director of Office of Lands and Mines, Federal Territory of Kuala Lumpur.

The Respondent avers that based on a search conducted with the Office of Lands and Mines of Federal Territory of Kuala Lumpur, the Respondent was informed that the application that was submitted by the Claimant was incomplete.

In addition to the above paragraph, the Respondent avers that Respondent had as early as 7-10-2009 it 53 had informed the Claimant about the incomplete application made by the Claimant.

The Claimant nevertheless took two years to act, namely vide the Claimant’s letter dated 11-10-2011. The laches on the part of the Claimant clearly shows their lackadaisical attitude in obtaining the required approval and authorization from the relevant authority which contradicts Clause 6.9 of the said Agreement.”. Johawaki further pleaded that MAIWP was negligent in submitting the application and/ or obtaining the required approval/ authorisation and gave the particulars of negligence. [58] In MAIWP’s Penyata Pembelaan Kepada Tuntutan Balas Dan Jawapan Kepada Pembelaan Terpinda Semula, it basically denied Johawaki’s contentions and asserted that whatever action it took, it was with a view of fulfilling the requirements as stipulated in the JVA and not with the objective of taking over Johawaki’s responsibilities. [59] In the Notes of Proceedings (‘NoP’) relating to a Preliminary Meeting between the learned Arbitrator and counsels representing the parties 54 on 16.7.2014 (exhibit “P-29” at pp 1211 – 1214 Enclosure 5), the Arbitrator noted that the “Agreed Facts and Issues have not been prepared and served and submitted as earlier directed” and accordingly gave directions for the same to be finalised and submitted to the Arbitrator two weeks before the hearing date. The Agreed Facts and Issues are not mentioned anywhere in the Award and nor are they exhibited in the Affidavits before this Court. [60] In the circumstances, and having thoroughly read the parties’ pleadings, it is my considered view that the issues on liability which arose for determination of the learned Arbitrator, based on the pleadings, are as follows:

Whether Johawaki was in breach of the JVA by failing to provide the documents as per subparas (i), (ii) and (iii) in the letter dated 3.10.2011 from PTG KL to MAIWP (refer para 19 above). In this regard –

it is undeniable that Johawaki is the “pemegang kaveat persendirian”; and 55

(ii) it is observed that this letter together with the letters written by MAIWP on 9.4.2008, 16.4.2008, 4.10.2010 and 18.1.2011 support the fact that MAIWP had submitted the application to amend the express condition on the said Land, which would be in accordance with sub-s 124(1) NLC, as quoted in part below: “(1) The proprietor of any alienated land may apply to the State Authority under this section for-

the alteration of any category of land use to which the land is for the time being subject or, where it is not so subject, for the imposition of any it is not so subject, for the imposition of any category thereon;

the rescission of any express condition or restriction in interest endorsed on, or referred to in, the document of title thereto, …; or (ba) … 56

the amendment of any express condition or restriction in interest endorsed on, or referred to in, the document of title thereto, or the imposition of any new express condition or restriction in interest: …”. In the context of the Federal Territory of Kuala Lumpur, “State Authority” means the Government of the Federation (see the Federal Territory (Modification of National Land Code) Order, 1974 [P.U.(A) 59/1974]). Furthermore, by P.U.(B) 108 dated 18.2.2003 and published in the Gazette on 3.3.2003, the Government of the Federation, in exercise of the powers conferred by section 13 NLC as modified by P.U.(A) 56/1974, had delegated to the JKT WPKL, the exercise and performance of the powers and duties conferred and imposed on the Government of the Federation by or under certain provisions of the NLC. 57 MAIWP’s application to PTG KL would also be consistent with Clause 5.1(b) in the JVA, which appears to have anticipated that MAIWP, as the registered proprietor of the said Land, may carry out any of the action required under Clause 5.1(a) of the JVA, including to apply to PTG KL to amend any express condition or restriction in interest endorsed on, or referred to in, the document of title to the said Land as per subpara (iii). Clause 5.1(b) provides that if MAIWP should do so, then Johawaki has to give an undertaking that it will continue with whatever action that MAIWP has taken.

In the absence of a clause in the JVA governing “Amendment”, which usually provides that no amendment or modification shall be valid or binding upon the parties unless it is made in writing by way of a supplementary agreement, and the non-existence of a supplementary agreement in this case, the issue as to whether there was in fact an agreement on or about 27.2.2008 to vary the terms of the JVA, in particular Clause 5.1, such that the responsibility for obtaining the necessary approvals/ or 58 permissions lies on MAIWP. Johawaki’s Re-Amended Statement of Defence does not expressly state that the alleged variation of the terms of the JVA applies to all or only part of the requisite approvals or permissions that have to be obtained in respect of the said Development, and if merely in part, which type of approvals or permissions, and to whom. Nevertheless, from my reading of paras 3 and 4 of the said pleading, it seems to me that the purported variation pertains to all necessary approvals or permissions from the relevant authorities.

Flowing from Johawaki’s pleadings as to the particulars of variation, the issue as to whether the four letters dated 9.4.2008, 16.4.2008, 4.10.2010 and 18.1.2011 sent by MAIWP to PTG KL signify that there was a variation of the JVA and the extent of the variation.

Whether Johawaki relied on MAIWP’s conduct which caused Johawaki not to undertake the necessary action in submitting the applications for approvals and permissions from the 59 relevant authorities, and further, whether MAIWP is estopped from relying on Clause 5.1 of the JVA.

Whether MAIWP’s letter dated 11.6.2008 requiring Johawaki to “… mengemukakan semula cadangan baru dengan pulangan terbaik yang boleh diberikan kepada MAIWP …” reflects MAIWP’s intention of acquiring extra profit and a clear departure and contradiction of the spirit of the JVA.

Whether MAIWP was negligent in submitting the application for approvals or permissions to the relevant authorities as per the particulars pleaded in subparas 15(i) and (ii) of Johawaki’s Defence.

Whether MAIWP’s letter dated 2.12.2011 displayed a position which contradicted the purpose and intention in the JVA and amounted to a clear indication of MAIWP’s intention to resile from the position taken on 27.2.2008 when MAIWP accepted the second offer of RM66,783,500.00 as profit. 60

Whether MAIWP had wrongfully terminated the JVA unilaterally. [61] In its Initial Written Submission at the arbitration (exhibit “P-20” at pp 1074 - 1088 Enclosure 5), MAIWP submitted that the letter from PTG KL dated 3.10.2011 is “the primary evidence which forms the basis of the Claimant’s Notice To Rectify Default” and “serves as a conclusive evidence that the Respondent/Developer had failed to comply with Clause 3.1 (sic) of the Agreement”. [62] Johawaki’s submission (exhibit “P-21” at pp 1090 – 1146 Enclosure 5) highlighted that its obligation in relation to the change in category of use is to only make the application within time and that the JVA is silent on when the approvals must be obtained by. [63] MAIWP’s Submission In Reply (exhibit “P-22” at pp 1148 – 1181 Enclosure 5) included a table of Chronology of Events and a table of comparison between Johawaki’s pleaded defence and submission. Based on the former, MAIWP again drew attention to the letter dated 3.10.2011 from PTG KL as the relevant authority responsible to issue 61 approval for the conversion of land use and hence, serving a pivotal point in respect of the actual status of the matter and immediate steps which needed to be carried out at the material time. MAIWP contended that by the direct operation of the contractual obligation of the JVA, Johawaki’s deliberate failure to provide the caveator’s letter of consent amounts to a breach of the JVA. [64] I now turn to the Award. The learned Arbitrator stated that after the JVA was signed, there is evidence that Johawaki started to take steps in contemplation of moving forward with the said Development, however events then occurred which gave Johawaki reason to suspect that MAIWP was not going to fulfil its obligations. Paras 4.5 -

4.24 in the Award cover mainly MAIWP’s requests for increases in the profits and Johawaki’s reaction to the same. Para 6.0 is dedicated to the issue on “Shift in Responsibility” and at para 6.3, the learned Arbitrator said: “I have examined the Clauses and taken into account the Submissions of parties on the facts and the law and hold the position to be as follows:- 62 a. Clause 5.1 only relates to the making of an application and not obtaining an approval; b. Clause 5.10 is only a general clause requiring compliance in writing; c. Clause 8.1 is a clause relating to grounds of breach on which the Contract can be terminated. On the facts of this case none of the grounds is relevant for the purpose of termination of the agreement.”. [65] The learned Arbitrator then referred to para 3 in Johawaki’s Re-Amended Statement of Defence and para 1 in MAIWP’s pleadings in reply where, apart from denying the said para 3, MAIWP mentioned regarding “satu perjanjian surat wakil khusus bertarikh 25/8/2004” that was entered into between the parties and hence, “kuasa dan tanggungjawab Responden adalah jelas tidak berubah dan kekal”. The Arbitrator’s view on this (this being one part in the English text of the Award where some paras are in the national language) was that: “6.7 Ini adalah tidak menjawab dengan memuaskan apa yang dinyatakan oleh Responden tidak ada apa-apa 63 keterangan berkenaan dengan surat wakil yang menunjukkan apa-apa kaitan dengan aspek ini.

6.8 Apart from a bare denial there was merely reiteration that the parties had entered into the Agreement and that this remained unchanged.

6.9 All that the Claimant go on to say is that what was done by Claimant was not intended to take over the obligation.…”. [66] I pause here to note that I am unable to find any “perjanjian surat wakil khusus”, whether amounting to a “Surat Kuasa Wakil” within the meaning of Clause 6.3 of the JVA or some other agreement apart from the JVA, in the documentary exhibits before me. In view of the Arbitrator’s statements in the Award, it can be deduced that the “perjanjian surat wakil khusus bertarikh 25/8/2004” was not exhibited in the arbitration proceedings. [67] Moving on, the Arbitrator then remarked that “6.10 However, that alone does not bring the matter to an end or dispose off. This is because there are many facts to this dispute.” and thereafter, 64 embarked to speculate on the question as to whether Johawaki would have been willing to withdraw the caveat. Whilst the Arbitrator himself acknowledged that he was speculating, yet, in the very next sentence he said that the speculation is based on the facts of the case. The Arbitrator then made a finding on this “speculative” matter i.e. that Johawaki would not have withdrawn the caveat in any event because MAIWP was “acting contrary to the agreement and was not willing to abite (sic) by the agreement” as it kept increasing the returns that it wanted “which from the evidence indicate a trench that such demands could go on and was a situation where perhaps the end of the tunnel could not be seen”. [68] The learned Arbitrator further found that MAIWP was acting “under dictation or influence of third party with total disregard to the terms and conditions of the agreement” and that “This was not only improper but also unacceptable”. [69] The next sub-headings in the Award are regarding “The Caveat” and “Fiduciary Duties” with reference to Clause 9.8 of the JVA on 65 “Perjanjian Dimasuki Dengan Niat Baik” before the learned Arbitrator concluded on the issue of liability in the following paras in the Award: “9.1 Having regard to the matters set out above, I hold that the Claimant is not entitled to a declaration that the termination of Joint Venture Agreement was valid and effective. Apart from that the need to address myself on damages and costs and other reliefs is not necessary.

9.2 With this, I also do not agree in consequence that the Claimant has suffered damages amounting RM72,966,036.00. The reason for this is that this damage has not been approve (sic). Because on the one hand the situation was brought about by their own wrongdoing. In fact, by reason of the delay and what has transpired, I can and do take notice of the fact that they have actually benefitted from the work done by the Respondent and the appreciation of the land.”. [70] In Kempinski Hotels SA v PT Prima International Development [2011] SGHC 171, the High Court in Singapore had to deal with, inter alia, the issue of inadequate pleading and the equivalent to our subpara 66 37(1)(a)(v) AA 2005. The following excerpt from the judgment of Judith Prakash J touching on the parties’ pleadings is insightful: “55 … To determine whether matters in an award were within or outside the scope of the submission to arbitration, a reference to the pleadings would usually have to be made. It is therefore incorrect for the respondent to argue that jurisdiction in a particular reference was not limited to the pleadings or that there was no rule of pleading that requires all material facts to be stated and specifically pleaded as would be required in court litigation. An arbitrator must be guided by the pleadings when considering what it is that has been placed before him for decision by the parties. Pleadings are an essential component of a procedurally fair hearing both before a court and before a tribunal. ... 56 Singapore Arbitration Legislation Annotated by Merkin and Hjalmarsson (Informa, 2009) (“Merkin and Hjalmarsson”) states at p 38: Where an arbitration is conducted on the basis of Model Law, art. 23, the arbitrator is bound to decide the case in accordance with the parties’ pleadings, and he is not entitled to go beyond the pleadings and 67 decide on points on which the parties have not given evidence and have not made submissions. The above statement was adopted from Ng Chin Siau v How Kim Chuan [2007] 2 SLR(R) 789, a decision that I made in the context of the Arbitration Act (Cap 10, 2002 Rev Ed) ... In that case, I emphasized that abiding by the rule as to the pleading of material facts was essential in arbitration proceedings where the right of appeal was severely limited.” (emphasis added). [71] In another decision by our southern neighbour, the Chief Justice of Singapore, Menon CJ, in delivering the judgment of the Court of Appeal in AKN v ALC [2015] SGCA 18 and cautioning the courts against attempts by ingenious counsels to disguise what is substantially an appeal on the legal merits of an arbitral award as a challenge on process failures during the arbitration, held that: “38 In particular, there is no right of appeal from arbitral awards. That is not to say that the courts can never intervene. However, the grounds for curial intervention are narrowly circumscribed, and generally concern process failures that are unfair and prejudice the parties or instances 68 where the arbitral tribunal has made a decision that is beyond the scope of the arbitration agreement. It follows that, from the courts’ perspective, the parties to an arbitration do not have a right to a “correct” decision from the arbitral tribunal that can be vindicated by the courts. Instead, they only have a right to a decision that is within the ambit of their consent to have their dispute arbitrated, and that is arrived at following a fair process.”. [72] On the domestic front, Mary Lim JCA in delivering the judgment of the Court in Sigur Ros (supra, at pp 244 - 245) and dealing with the submissions on the issue of pleadings, said: “[83] We agree with the submissions of learned counsel for the appellant that Points of Claim, Responses/ Defences and Replies are to parties in an arbitration as pleadings are to the litigants in a Court of law. Unless the parties have agreed to the contrary, those “pleadings” define the disputes between the parties and the extent of jurisdiction and submission to the jurisdiction of the arbitrator - see section 25 of Act 646. … … 69 [85] Not only do these pleadings define the dispute(s) that are referred to arbitration, more importantly, the arbitrator takes his mandate and authority from those pleadings insofar as what is required for his determination. The arbitrator cannot exceed those terms of reference or limits of submission which have been demarcated by consensual agreement between the parties. Otherwise, these breaches may become the basis of setting aside of awards under other provisions of section 37(1)(a) of Act 646. [86] The arbitrator does not set those limits of jurisdiction, the arbitrator’s jurisdiction is defined for him by the parties. In this case, not only do the pleadings precisely demarcate and define the dispute, the terms were also agreed to at a Preliminary Meeting on 11.2.2014 between the arbitrator and the parties.”. [73] As for the meaning of a “new difference”, guidance can be obtained from the judgment of the Court of Appeal in Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd (supra), where after stating the approach taken by Mary Lim J (as Her Ladyship then was) in the High Court, Mohamad Ariff JCA elucidated at p 135 that: 70 “[22] … Her Ladyship considered the detailed finding of the arbitrator … but concluded that the arbitrator had decided on a dispute which was not contemplated by, or not falling within the terms of the submission to arbitration. This is an area of arbitration law which allows the court to set aside an award on the ground that an arbitrator had decided on a ‘new difference’ which is irrelevant to the claim, the ‘new difference’ being understood as a new dispute not contemplated by or not falling within the terms of the arbitration submission. The underlying rationale for this rule rests on the consensual nature of arbitration. Parties are not compelled to resort to arbitration contractually, but if they provide for it and refer their dispute to arbitration, the mandate of the arbitrator must be limited to the terms defined by the parties for him to exercise his jurisdiction. If the arbitrator strays from the confines of this mandate, he will be acting in excess of his jurisdiction, even though he may have the initial and primary jurisdiction to arbitrate between the parties. This rationale is stated succinctly by the Court of Appeal, Singapore in PT Prima International Development v Kempinski Hotel SA & Other Appeals [2012] SGCA 35: An arbitral tribunal has no jurisdiction to resolve disputes which have not been referred to it in the 71 submission to arbitration. Simply put, a party cannot raise a new dispute in an arbitration without the consent of the other party. These propositions flow inexorably from the consensual nature of arbitration. [23] This case was cited by Her Ladyship, together with several other decisions of the Singapore Courts, such as PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR (R) 597, CRW Joint Operation v PT Perusahaan Gas Negara [2011] 4 SLR 305 and Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd [2010] 3 SLR 1. [24] These persuasive cases, and others, that have been addressed by our courts lay down one basic principle–an arbitrator must decide the dispute according to the scope of the arbitration and he cannot decide the dispute on issues that have not been raised or addressed by the parties….” (emphasis added) [74] Having read the Award repeatedly, and having quoted excerpts therefrom in extenso, as well as having considered the evidence and submissions of the parties at the arbitration and in this Court, it is my finding that – 72

nowhere in the Award did the learned Arbitrator analyse and make a finding on the issue as stated in subpara 60(a) above, which arose directly from MAIWP’s SoC, and which he was duty bound to decide;

it is not clear from the Award as to whether the learned Arbitrator made a finding of fact that the parties had agreed to vary the terms of the JVA in the manner as alleged by Johawaki in its Re-Amended Defence. In this regard, the learned Arbitrator had referred to MAIWP’s bare denials and then proceeded to consider the hypothetical question as to whether Johawaki would withdraw the caveat. The learned Arbitrator then drew on MAIWP’s repeated requests for an increase in its returns to conclude that MAIWP was bent on not keeping to its side of the bargain. By asking the said theoretical question and then tying it back to MAIWP’s purported intention in not wanting to honour the JVA, the Arbitrator had clearly gone on a frolic of his own and decided on matters beyond the scope of submission to arbitration; and 73

although the learned Arbitrator did not address MAIWP’s objection to Johawaki’s submissions which raised matters that it alleged were not pleaded in Johawaki’s pleadings, the Arbitrator’s finding that Clause 5.1 of the JVA only relates to the making of an application and not obtaining an approval does not amount to a “new difference” in the sense as laid down in the Perwira Bintang Holdings case (supra) since both parties had made reference to the said Clause in their pleadings and the interpretation of the same is within the ambit of the arbitration. [75] Based on the foregoing, and applying the test as enunciated in Jan De Nul (supra), I am of the opinion that the Award is in conflict with the public policy of Malaysia as it has violated the most basic notions of justice that the Arbitrator must deal with the issues arising from the pleadings which define the disputes between the parties, and the extent of jurisdiction and submission to the jurisdiction of the Arbitrator. To uphold the Award would be injurious to the public good 74 or wholly offensive to the ordinary reasonable and fully informed member of the public. [76] It is thus my considered view that on the facts and circumstances of this case, MAIWP has proven on a balance of probabilities that the Award is one that comes within subpara 37(1)(a)(v) AA 2005 and that there is evidence to bring this case within subparas 37(1)(b)(ii) and 37(2)(b)(ii) AA 2005 as per prayers (a) and (b) in the O.S. for the Award made and published on 14.12.2018 to be set aside. Exercise of the discretion of the Court [77] In para 56 of the judgment of the Federal Court in Jan De Nul (supra, at p 429), it was held that “Even though the court finds that a breach of the rules of natural justice has been established or that an arbitral award is in conflict with the public policy under s 37 of the AA 2005, it does not necessarily mean that the award must be set aside as a matter of course. The power of the court to set aside an award under s 37 is discretionary and will not be exercised automatically in every 75 case where the complaints are established (see: Kyburn Investments Ltd v Beta Corporate Holding Ltd [2015] 3 NZLR 644; Sigur Ros Sdn Bhd).”. [78] The Federal further outlined the factors to be considered in deciding whether an award should be set aside under s 37 AA 2005 and these include the nature and impact of the particular breach, and the background policy of encouraging arbitral finality and minimalist intervention approach. [79] Judging from the Award as a whole, and with the greatest respect, it is my view that the learned Arbitrator had overlooked the critical issues arising from the pleadings and thereby had breached the rule of natural justice which require the parties to be given a fair hearing wherein all the issues are adjudicated upon. The breach that occurred is substantial as opposed to being merely a casual breach or an occasional error since, had the issues been dealt with, the outcome of the Award may very well be different. 76 [80] The instant case is one that comes squarely within the illustration as stated by the learned authors Nigel Blackaby, Constantine Partasides QC, Alan Redfern and Martin Hunter in Redfern and Hunter on International Arbitration, 6th. Edition, Oxford University Press 2015 as follows: “10.48 Where an arbitral tribunal fails to deal with all of the issues referred to it for determination, it is usually said that the award should at least be held valid in respect of the issues with which it does deal. However, this is perhaps too simplistic. The significance of the issues that were not dealt with must be considered in relation to the award as a whole. For example, it is not difficult to envisage a situation in which the issues that were overlooked were of such importance that, had they been dealt with, the whole balance of the award would have been altered and its effect would have been different.” (emphasis added). [81] In the circumstances, I find that this is a situation which warrants the intervention of the Court and therefore, I exercised my discretion in favor of setting aside the Award on liability. As in the case of Sigur 77 Ros (supra), the option of sending the Award back to the learned Arbitrator does not arise as no application or request was made pursuant to sub-s 37(6) AA 2005 by either party at the material time. [82] Consequently, the issue as to whether the termination of the JVA was lawful or otherwise remains unresolved and it would logically follow that the Arbitrator’s findings on the issue of quantum of damages would similarly have to be set aside. Nonetheless, I will go on to consider each ground of MAIWP’s challenge as to the award on quantum of damages in the subsequent paras of this judgment. 78 ISSUES ON QUANTUM:

Actual Loss - Award Of Damages Exceeds The Pleaded Damages - Exercise of Arbitrator’s Discretion MAIWP’s Submissions [83] Based on subparas 36(a) and (b) above, it can be seen that MAIWP has launched a two-pronged attack on the Arbitrator’s award for actual loss. [84] MAIWP recapitulated the same fundamental principles on pleadings as submitted in respect of the issue on liability. Mr. Alan Wong argued that the learned Arbitrator committed a patent jurisdictional error under subpara 37(1)(a)(v) AA 2005, and the Award is contrary to the public policy under subpara 37(1)(b)(ii) as it was in breach of natural justice when he awarded special damages in the sum of RM12,622,275.43, which is in excess of the amount pleaded by Johawaki in its Re-Amended Statement of Defence and Re-Amended Counterclaim dated 16.4.2014 i.e., RM6,237.316.32. 79 [85] As regards the exercise of the Arbitrator’s discretion, MAIWP submitted that the Arbitrator is obliged to treat the parties equally as provided in s 20 AA 2005. Hence, the Arbitrator must abide by the basic notion of rules of law and decide on the quantum of damages based on the probative value of the evidence, and not to award damages based on discretion. [86] Mr. Alan Wong pointed out that Johawaki, in its submissions at the arbitration, had conceded that the documentary evidence it had produced proved an amount of damages up to RM4,132,434.49 only. However, the Arbitrator proceeded to exercise his discretion to take into account documents, which based on the evidence and by their nature, he opined can be accepted as proof of an actual loss of RM12,622,275.43. [87] Counsel for MAIWP then cited the case of Ahmani Sdn Bhd v Petronas Penapisan (Melaka) Sdn Bhd [2015] 11 MLJ 32 as authority for the proposition that where there is an absence of evidence to prove a claim for special damages, the arbitral tribunal was obliged to 80 dismiss the claim or at most, award nominal damages. An arbitral tribunal does not have inherent or residual powers or jurisdiction to alleviate the parties of their evidentiary burden. [88] It was further argued that the total amount committed in respect of the work items claimed may not be the actual total expenditure incurred/payable, especially in a case as the present where the JVA was terminated prior to completion. Moreover, the learned Arbitrator failed to proffer sufficient reasoning or particulars to demonstrate which heads of claim was allowed or disallowed. Johawaki’s Submissions [89] Johawaki similarly began its submissions with another trite legal principle that an application to set aside an award pursuant to s 37 AA 2005 is not an appeal and thus, there should be no examination as to the merits of the Award. Johawaki alleged that based on MAIWP’s AIS, and shorn of its trimmings, MAIWP’s submissions, essentially amount to an attempt to have this Court review the merits 81 of the Arbitrator’s findings on quantum of damages. These findings, it was argued, are findings of fact which this Court cannot interfere and reference was made to the recent decision in Huawei Technologies (Malaysia) Sdn Bhd v. Maxbury Communications Sdn Bhd [2019] MLRAU 79. [90] Mr. Robert Lazar further submitted that a perusal of the pleadings, evidence and submissions in the arbitral proceedings would show that the learned Arbitrator did not rely on a “new difference” irrelevant to the arbitral proceedings. The quantification of damages is precisely what the Arbitrator was tasked to do, as a consequence of him finding that MAIWP wrongfully terminated the JVA. In quantifying damages of the nature claimed by Johawaki, it is not unusual that an award of damages, particularly for loss of profit, carries with it an element of approximation that cannot be calculated with pinpoint accuracy. [91] Johawaki additionally highlighted the fact that the evidence on damages was led without any objection by MAIWP whose cross examination during the arbitration was wanting and rebuttal evidence was absent. Therefore, Johawaki submitted that MAIWP’s basic 82 rights have not been prejudiced since MAIWP was given every opportunity to submit and ventilate its claim during the arbitration. MAIWP’s grievance is with the outcome of the arbitration, which by itself is not a ground for setting aside the Award. Findings of the Court [92] I have, at para 72 of this judgment, alluded to the ratio in Sigur Ros (supra), and it is therefore irrefutable that the learned Arbitrator’s mandate and authority or terms of reference in the arbitration are derived from the pleadings of the parties, which in turn define the dispute for the Arbitrator’s determination. So, what were Johawaki’s pleadings in relation to the claim for special damages? [93] The answer to this question can be found in para 28 in the Re-Amended Counterclaim. However, in order to have a full appreciation of Johawaki’s pleadings in relation to its monetary claim, I would at the outset provide an excerpt of the particulars of loss of profit that 83 were pleaded, together with two other paragraphs sequential to para

These pleadings are as follows: “28. The Respondent further reiterates that the Respondent had spent a substantial amount of money in removing the squatters, cleaning, fencing, monitoring and planning of the Property as well as initial preparation in pursuing the said Agreement and due to the unilateral termination by the Claimant, the Respondent had sustained actual losses and loss of profit from the said joint venture. The Respondent will be referring to the relevant documents during the trial of this action. Particulars of Actual Loss i. Cost of Land (Inclusive of cost of removal of squatters) RM 83,642-90 ii. Planning / statutory fees RM 70,592-00 iii. Consultant and project management RM 5,522,976-51 iv. Physical works RM 308,125-51 84 iv. Site maintenance and security RM 51,979-50 Total RM 6,237,316-32 Particulars of Loss of Profit i. Estimation of profit RM107,932,408-00 To be assessed The Respondent will be referring to the relevant documents at the trial of this action.

Alternatively, the Respondent will contend that the Claimant would, in any event, have received an advantage from the works carried out by the Respondent at its own expense for the improvement of the Property as set out at paragraph 28 above. The Respondent adopts the claim with regard to the ‘Particulars of Actual Loss’ as enumerated above in this respect.

In such circumstances, the Respondent contends that it is entitled to be compensated for all the expenses incurred in relation to the works carried out for the 85 improvement of the said Property which is advantageous to the Claimant and benefits the Claimant.”. [94] Based on the aforementioned pleadings, Johawaki had clearly pleaded two categories of losses resulting from MAIWP’s alleged wrongful termination of the JVA, namely actual loss of RM6,237,316.32, and loss of profit which was initially estimated at RM107,932,408.00 and thereafter amended to an amount to be assessed. [95] MAIWP’s response to the above mentioned pleadings in the Penyata Pembelaan Kepada Tuntutan Balas Dan Jawapan Kepada Pembelaan Terpinda Semula is that - “16. Pihak Yang Menuntut merujuk kepada perenggan 28 dan 29 tuntutan balas dan menafikannya dan menyatakan bahawa adalah jelas tuntutan Responden adalah bercanggah dengan undang-undang statut relif ekuiti dan dengan itu adalah tidak berasas dan wajar ditolak dengan kos. 86

Pihak Yang Menuntut merujuk kepada perenggan 29 dan 30 dalam Tuntutan Balas Terpinda Semula dan menafikannya dan menyatakan bahawa terletak beban pembuktian yang ketat atas pihak Responden untuk membuktikan bahawa setiap satu perbelanjaan tersebut yang menepati prinsip quantum meruit.

Pihak Yang Menuntut juga menyatakan bahawa jumlah-jumlah yang didakwa sebagai kerugian itu adalah tidak berasa dan tidak benar atas dasar, kerja setakat ini yang boleh dilihat adalah semata-mata iaitu pagar premis yang uzur yang tidak mempunyai sebarang kawalan satu apa pun.

Pihak Yang Menuntut akan mengeluarkan segala bukti-bukti dokumen dan saksi-saksi yang wajar untuk membuktikan tuntutan Pihak Yang Menuntut semasa dalam bicara kelak.”. [96] The learned Arbitrator’s findings and conclusion on the issue of “Special Damages” are shown below: “10.1 With regards to actual loss and special damages, the Respondent have asked for RM16,234,958.00. This is on the basis of expenses committed made up of Land Costs, 87 Planning and Statutory Fees, Consultants and Solicitors, Physical Works and Site Security.

10.2 I have examined the items under Land Costs, Planning and Statutory Fees, Consultants and Solicitors, Physical Works and Site Security. [Bundle E @ p2]

10.3 In the documents submitted by the Respondent, this amount of RM16,234,958.00 is listed under amount committed and under heading of amount due

10.4 In view of this, I have examined the documents that were placed before the Tribunal and considered which items were acceptable and without actual proof.

10.5 On account of this, I have decided what is the amount to be allowed. Even though the Respondent have themselves considered that it could be RM4,132,434.49. So, taking into account documents which I do not accept have as having strictly been prove this come to RM3,261,683.00. Therefore, I allow a sum of RM12,622,275.43.

10.6 Therefore under the actual loss, I allow RM12,622,275.43 on the basis of RM16,234,958.43. 88

10.7 Of course, I agree with the Submission of the Counsel for the Claimant that actual loss or special damages must be strictly prove that notwithstanding, I exercise my discretion to take into documents which based on the evidence and by their nature can be accepted for what they say.”. [97] During the hearing of the Setting Aside Application, Mr. Robert Lazar had submitted on the source of documents from which the learned Arbitrator derived the sum of RM16,234,958.00 and these are –

Johawaki’s Statement of Expenditure As at 22/04/2014 (‘said Statement’) in its Ikatan Dokumen Tambahan Responden (‘IDTR’) 2 at pp 415 - 416 in exhibit “P-7” of MAIWP’s AIS (Enclosure 3) and marked as “Bundle E” in the arbitration;

the records of payments to support the said Statement in Johawaki’s IDTR 4 (Bahagian 1) at pp 589 - 803 in exhibit “P- 9” in MAIWP’s AIS (Enclosure 4) and marked as “Bundle G” in the arbitration; 89

further records of payments to support the said Statement in Johawaki’s IDTR 4 (Bahagian 2) at pp 805 - 1008 in exhibit “P- 10” in MAIWP’s AIS (Enclosure 4) and marked as “Bundle H” in the arbitration;

more records of payments to support the said Statement in Johawaki’s IDTR 5 at pp 1010 - 1027 in exhibit “P-11” in MAIWP’s AIS (Enclosure 5) and marked as “Bundle I” in the arbitration; and

the NoP at the arbitration, specifically the fact that MAIWP did not object to the production and marking of Bundles G, H and I, and that Johawaki’s witness, Abd. Rahman Bin Adam was cross-examined by MAIWP’s counsel on the very same Bundles [see the NoP for 2.9.2016 in exhibit “P-37” at pp 1295 - 1308 in MAIWP’s AIS (Enclosure 5)]. 90 [98] I have additionally noted the following:

Johawaki’s Written Submission dated 23.1.2018 on its counterclaim for actual loss: “103. RW-I, En. Abd Rahman Bin Adam has testified before this tribunal that Johawaki has incurred expenditure amounting to RM 16, 234, 958.00 as at 22.04.2014 in maintaining and securing the Subject Land and in carrying out the preliminary works pursuant to the Joint Venture Agreement including preparing and submitting all the development plans for approval. Reference was made to documents in Bundle E, in particular statement of expenditure at page 2 of Bundle E justifying the computation of RM 16, 234, 958.00.

RW-I was also recalled on 18.05.2016 to adduce additional evidence and has produced before this tribunal further documents to support Johawaki’s claim for actual loss which has been marked as Bundle G, Bundle H ad Bundle I respectively. His further additional witness statement was tendered and marked as RWSI-A. 91

Based on the documentary evidence before this tribunal actual costs of up to RM 4,132,434.49 was spent by Johawaki being payments made and due for all relevant services rendered by 3rd party professionals hired by Johawaki in maintaining and securing the Subject Land and in carrying out the preliminary works pursuant to the Joint Venture Agreement Documents entailing invoices from payee followed by internal memos and payment vouchers by relevant department in Johawaki and confirmed through issuance of cheques were all tendered in this arbitration.

All supplementing documents pertaining to Johawaki claim for actual loss is confined to documents in Bundle E, Bundle G, Bundle H and Bundle I. For easy reference, RW-I has relied on