Maya Maju (M) Sdn Bhd v Putrajaya Homes Sdn Bhd (WA-22C-28-04/2018)

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

An arbitration agreement shall be in writing.

An arbitration agreement is in writing -

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

if it is contained in an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.;

The requirement that an arbitration agreement be in writing is met by any electronic communication that the parties make by means of data message if the information contained therein is accessible so as to be useable for subsequent reference; and

A reference in an agreement to a document containing an arbitration clause shall constitute an arbitration agreement, 7 provided that the agreement is in writing and the reference is such as to make that clause part of the agreement.”

For the purpose of this section, “data message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange, electronic mail, telegram, telex or telecopy.” (emphasis added) [22] Learned counsel for the Plaintiff said that in construing the terms of the Conditions of Contract, it would be helpful to bear in mind the dicta of Gopal Sri Ram JCA (later FCJ) in Bauer (M) Sdn Bhd v Daewoo Corp [1999] 4 MLJ 545, as follows: “The starting point must be the arbitration clause itself. Counsel on both sides of the Bar have referred us to several cases on the question of interpretation. While I have found the authorities interesting, I must confess that I have derived little assistance from them. In my judgment, the true ambit of the arbitration clause in the present instance falls to be determined by reference to its own language. Although decided cases do assist in providing general guidelines, they are, save in very exceptional cases, merely decisions upon their own facts and are not to be taken as establishing the meaning that is to be assigned to the words used by parties to express themselves in a given case. As Sir Thomas Bingham M.R. (now Lord Bingham, L.C.J.) said in Giffen (Electrical Contractors) Ltd. v. Drake & Scull Engineering Ltd. [1993] 37 Con. LR 84, at p. 90: 8 “... it follows that we have to look very closely at the particular language of the provisions that we have to construe and the particular circumstances or the contract in question. Unless clear rules have been laid down - and they sometimes have been - for example, as to the meaning to be given to the expression 'condition' in the context of charterparty and a bill of lading, one has, I think to be cautious in reasoning from one case to another since cases appear to turn very much on their own particular terms and their own particular facts.” In the present case, the relevant portion of the arbitration clause reads: In the event that any disputes or differences should arise ... either during the progress or after the completion or abandonment of the works, as to any matter or thing of whatsoever nature arising thereunder or in connection therewith then such disputes or differences shall be referred to arbitration.”(emphasis added) [23] Condition 63 of the present Conditions of Contract reads as follows: “63. Arbitration

If any dispute or difference shall arise between the Employer and the Contractor, either during the progress or after completion of the Works, or after the determination of the Contractor’s employment, or breach of this Contract, as to :

the construction of this Contract, or

(ii) any matter or thing of whatsoever nature arising under this Contract, or 9

(iii) the withholding by the E.R. of any certificate to which the Contractor may claim to be entitled, then such dispute or difference shall be referred to the E.R. for a decision.

The E.R.’s decision which is to be in writing shall subject to sub-clause (e) hereof be binding on the parties until the completion of the Works and shall forthwith be given effect to by the Contractor who shall proceed with the Works with all due diligence whether or not notice of dissatisfaction is given by him.

If the E.R. fails to give a decision for a period of forty-five (45) days after being requested to do so by the Contractor or if the Contractor be dissatisfied with any decision of the E.R., then in any such case the Contractor any within forty-five (45) days after the expiration of forty-five (45) days after he had made his request to the E.R., or within forty-five (45) days after receiving the decision of the E.R., as the case may be, require that such dispute or difference be referred to arbitration and final decision of a person to be agreed between the parties to act as the Arbitrator. The arbitration shall be held at the Regional Centre for Arbitration at Kuala Lumpur, using the facilities and assistance available at the Centre.

Such reference, except on any difference of dispute under Clause 63 hereof shall not be commenced until after the completion or alleged completion of the Works or determination or alleged determination of the Contractor's employment under 10 this Contract, or abandonment of the Works, unless with the written consent of the Employer and the Contractor.

The Arbitrator shall have power to review and revise any certificate, opinion, decision, requisition or notice and to determine all matters in dispute which shall be submitted to him, and of which notice shall have been given in accordance with sub-clause (c) aforesaid, in the same manner as if no such certificate, opinion, decision, requisition or notice had been given. The rights to any extension of time to be certified under Clause 43 (DELAY AND EXTENSION OF TIME) together with the right to the sum to be ascertained by the E.R. in accordance with Clause 44 (LOSS AND EXPENSE CAUSED BY DELAYS) shall except as expressly provided elsewhere in the Contract be deemed to be in full compensation and satisfaction for all or any loss, expense or damages, whatsoever and howsoever sustained or incurred in respect of or arising out of any matter or thing in connection with which such extension of time has been or could have been granted or such sum has been or could have been ascertained as aforesaid. Such rights shall be to the exclusion of any other rights (whether at common law or otherwise wherever) which the Contractor may otherwise have had in respect of or arising out of any such matter or thing aforesaid.

Upon every or any such reference the costs of such incidental to the reference and award shall be in the discretion of the Arbitrator who may determine the amount thereof, or direct the amount to be taxed as between solicitor and client or as 11 between party and party, and shall direct by whom and to whom and in what manner the same be borne and paid.

The award of the Arbitrator shall be final and binding on the parties.

In the event of the death of the arbitrator or his unwillingness or inability to act, then the Employer and the Contractor upon agreement shall appoint another person to act as the arbitrator, and in the event the Employer and the Contractor failing to agree on the appointment of an arbitrator, an arbitrator shall be appointed by the person named in the Appendix I hereto.” (emphasis added) [24] The Plaintiff submitted that the language used in Condition 63 is clear and unequivocal in its meaning. In the first instance at sub-paragraph (a), that disputes or differences arising between the parties shall be referred to the ER. [25] Thereafter, and in the event the E.R. fails to give a decision or if the Plaintiff is dissatisfied with the decision given by the E.R., the Plaintiff may require that the dispute or difference be referred to arbitration. [26] According to the Plaintiff Contractor, the option is available and open at the instance of the Contractor to proceed to arbitration if the Contractor is minded to. If the Plaintiff intends to refer the matter to arbitration under Condition 63, the Plaintiff would have to comply with the pre-requisite set out under Condition 63 requiring the Plaintiff to refer the dispute to the E.R. first. However, in the event the Plaintiff does refer the dispute to the E.R. first, the Plaintiff is thereafter not compelled to refer the dispute to arbitration, and can still opt to file an action in Court. 12 [27] I do not think the Contractor has the option not to follow the pre-arbitration procedure by referring the dispute to the E.R. but that the Contractor could proceed straight to the Court. To proceed to Court would be to short-circuit and bypass the agreed procedure with respect to arbitration which is in the nature of a precondition to be fulfilled before proceeding with arbitration. [28] I agree that there is a typographical error in the underlined word “any” in the relevant portion of Condition 63 which provides “…then in any such case the Contractor any within forty-five (45) days after the expiration of forty-five (45) days after he had made his request to the E.R….” (emphasis added). The word “any” does not make any sense nor supply any meaning to the sentence. The use of the word “any” is clearly a typographical error and is meant to read “…then in any such case the Contractor may within forty-five (45) days after the expiration of forty-five (45) days after he had made his request to the E.R….” (emphasis added) [29] I agree with learned counsel for the Plaintiff that this is obviously the case as the language employed in Condition 63 is in fact based entirely upon the 1983 version of the JKR Form 203A Standard Form Contract (also known as the PWD Form 203A [Ed 1983]) [apart from the reference to “E.R.” rather than “SO”], where the language utilized in Clause 54 thereof, equivalent to Condition 63 now under consideration, contains the permissive word “may” rather than the word “shall” in sub-clause (c). [30] Learned counsel for the Plaintiff then submitted rather strategically that the use of the word “any” by mistake by the Defendant in drafting Condition 63 ought to be construed against the Defendant, such that the relevant portion of Condition 63 should in fact be read as “…then in any such case the Contractor may within forty-five (45) days after the 13 expiration of forty-five (45) days after he had made his request to the E.R….”. [31] The Plaintiff harnessed the contra proferentum rule of interpretation to help them further. This rule provides that any ambiguity in a document must be construed against the party preparing the document and who seeks to rely upon the terms thereof. See : Stanta Metal Drum Sdn Bhd v Tokio Marine Insurans (Malaysia) Berhad [2012] 2 MLRH 179 (High Court), Hing Auto Sdn Bhd v Unidive Marine Services (M) Sdn Bhd [2015] MLRHU 299 (High Court) and New Ace Digital Print Sdn Bhd & Anor v Public Bank Berhad [2018] 2 MLRA 346 (Court of Appeal). [32] I am not persuaded by learned counsel for the Defendant in the position he had taken that there is no typographical error in Condition 63, and that the word “any” was intended to be used. This position is completely untenable as the Condition makes no sense whatsoever if read with the word “any”. A comparison between Condition 63 and Clause 54 of the 1983 version of the JKR Form 203A Standard Form Contract will immediately confirm that there was indeed a typographical error in copying Clause 54 and that Condition 63 should indeed be read with the word “may”. This is no doubt made more prevalent with the “copy and paste” approach taken in drafting without proper checking with the result that some words had fallen through the cracks and that the substituted word is not the correct word. [33] It cannot be that when the form of English used is almost impeccable in the rest of the Conditions of Contract, the drafter could have introduced a misplaced word “any” that does not fit nor flow in the context and the clause. 14 [34] In this respect I draw comfort from the authoritative text of Keating on Construction Contracts by Stephen Fust and Vivian Ramsey, (8th Edn, Thomson Sweet & Maxwell 2006) and to the following passage: “[2-021] Meaningless words. An apparent agreement containing meaningless words may be treated in one of three ways: the meaningless words may be ignored and the rest of the clause in which they appear enforced; or the clause in which they appear may be struck out but the rest of the agreement enforced; or the whole agreement may exceptionally be vitiated. Which of these may occur depends on the importance which the parties are considered to have attached to the clause and, presumably, on the remaining integrity of the agreement shorn of the meaningless words. If a clause taken literally is almost incomprehensible, the court may be prepared to ‘translate’ it if the parties’ intention is clear, even though this might involve using words not to be found in the contract.” (emphasis added) [35] I agree that “shall” may mean directory and not mandatory as in Condition 63(a), even though Condition 63 utilizes the word “shall” in connection with a reference of the dispute or difference to the E.R. for a decision. The parties may choose to live with the dispute and so in spite of the use of the word “shall” it does not render such a reference mandatory. [36] However if the Contractor chooses to proceed with reference to the E.R. for the resolution of the dispute or difference then contractually parties have agreed to follow the procedure and consequences that have been provided for. [37] It had been remarked that “shall” is the most confusing word in the English language when it comes to drafting as whether or not it is 15 mandatory or merely directory would depend on the context in which it was used. This proposition has the support of many an authority. See: Hee Nyuk Fook v Public Prosecutor [1988] 1 MLRA 482 (Supreme Court), Lim Phin Khian v Kho Su Ming [1995] 2 MLRA 239 (Supreme Court) and Al Emas Sdn Bhd v Pentadbir Tanah Daerah Kuala Muda, Kedah Darul Aman (Unreported) (Court of Appeal). [38] I would conclude that Condition 63 is an Arbitration Agreement binding on the Contractor if they should choose to proceed further after reference to the E.R. with or without a decision from him. The Arbitration that is to commence shall follow the procedure as set out in Conditions (d) to (h) with respect to the appointment of the Arbitrator and the powers given to the Arbitrator. [39] It may be commented that there is no option to the Employer to similarly proceed with arbitration and that is because they have agreed to abide by the decision of the E.R. appointed by them, no matter how unpleasant the decision might be in the meanwhile. [40] Whether or not the Arbitration Agreement has with it an option for the Contractor to choose proceeding in Court rather than before an Arbitrator will be considered next. Whether Condition 63(c) of the Conditions of Contract gives an option to the Contractor to proceed with Arbitration or Litigation should the Contractor chooses to proceed further after a reference to the E.R. [41] As stated, the Plaintiff’s stand is that under Condition 63, if the Plaintiff has referred a dispute to the E.R. and where the E.R. either does not give a decision, or if the Plaintiff is dissatisfied with the decision given, the Plaintiff can elect to proceed with arbitration, in which event the ensuing 16 provisions of Condition 63 will apply. The Plaintiff also has the equally valid option of electing to have the dispute or difference resolved through other means. In the present case, the Plaintiff has elected to have the dispute resolved by the High Court, which the Plaintiff said it is clearly entitled to do, under Condition 63(c). [42] Learned counsel for the Plaintiff cited the case of Lembaga Pelabuhan Kelang v Kuala Dimensi Sdn Bhd and another appeal [2011] 2 MLJ 606 in support of the above proposition. In this case, the Court of Appeal considered a plethora of cases in deciding upon the proper interpretation of an arbitration clause which, similarly to Condition 63 in the present case, that : “Any such dispute or difference which cannot be resolved amicably may be referred to arbitration in accordance with this Agreement.” [43] Low Hop Bing JCA opined on the use of the word “may” in the relevant arbitration clause as follows: “[30] In addition, unlike the peremptory word “shall”, the permissive word “may” used in the arbitration clause ie cl 11.1 of DA1 is capable of readily abandoning the discretion to refer to arbitration, and opting for litigation instead, as expressed and contractually agreed by the parties in the supplemental agreements DA2 and DA3 via the ‘submission to jurisdiction’ clauses….” [44] Learned counsel also sought to persuade the Court by referring to the case of Syarikat Pembinaan Anggerik Sdn Bhd v Malaysia Airports Holdings Berhad [2017] MLJU 2019; [2017] MLRHU 1, where the High Court originally granted a stay to the Defendant/Applicant under Section 10 of the Act, but this decision was reversed on appeal to the Court of Appeal (grounds of decision pending). The basis upon which the High Court 17 decision was reversed is, inter alia, that Condition 53 of the Conditions of Contract in that case (exactly the same as Condition 63 in the case, save for the typographical error in using the word “any”) did not amount to an arbitration agreement and as such, Section 10 had no application to the matter. The approved Court of Appeal Order dated 30 March 2018 was produced. [45] It was argued by the Plaintiff that as it stands therefore, the Court of Appeal has determined that an identical provision, applying the contra proferentum rule (Condition 53 in that case) did not amount to an arbitration agreement, as a result of which the Defendant/Applicant could not apply to stay the same pending a reference to arbitration under Section 10 of the Act. [46] Therefore applying the doctrine of stare decisis, learned counsel for the Plaintiff submitted confidently that this Court ought to arrive at a similar conclusion, as the provision relied upon by the Defendant/Applicant in this case is identical, applying the contra proferentum rule, to that in the Syarikat Pembinaan Anggerik Sdn Bhd case (supra). See: Dalip Bhagwan Singh v PP [1997] 1 MLRA 653. [47] Learned counsel for the Plaintiff then sought to prevail upon its Court to conclude that there is no arbitration agreement as between the Plaintiff and the Defendant contained in the Conditions of Contract, within the meaning of Section 9 of the Act, and that therefore, Section 10 of the Act does not come into operation. [48] As this Court does not have the benefit of the judgment of the Court of Appeal, this Court is not able to conclude as to whether the dismissal of the appeal is on the ground of there being no arbitration agreement or on some other grounds. It is to be noted that other grounds were raised as 18 could be gleaned from the judgment of the High Court in Syarikat Pembinaan Anggerik case (supra) as follows: “[13] On clause 5 providing Supplemental is governed by the laws of Malaysia and parties irrevocably submit to jurisdiction of the courts in Malaysia reinforcing Plaintiff submission it can elect to refer to arbitration or litigation Hamidah Fazilah Sdn Bhd v Universiti Tun Hussein Onn Malaysia [2017] 7 MLJ 274 is instructive. There one issue was whether a clause on governing law and submission to exclusive jurisdiction of courts would negate the arbitration agreement and the court preferred a harmonious interruption in an apparent contradiction at first reading. It was stated at page 291 - “[57] This is clearly a case where a holistic and harmonious approach is to be followed, giving effect to the clear intention of the parties to resolve all matters arising out of or in connection with the contract to arbitration. At the same time parties affirm that where they have to approach the court to aid and assist them in the instances set out above, they would then submit to the exclusive jurisdiction of the Malaysian courts.” Thus clause 5 of Supplemental would not affect the validity of the arbitration agreement contained in clause 53 and clause 4. [14] Plaintiff’s contention that Defendant had by conduct evinced an intention not to be bound by the strict compliance of Main Contract or Supplemental as it failed to comply with clauses 43 and 47 of Main Contract was not proved but only a bare assertion. In any event the agreement in clause 53 and clause 4 are subject to the doctrine of separability which 19 provides for the severability or autonomy of the arbitration agreement. The doctrine of separability treats the arbitration clause and the underlying contract as two distinct contracts.”(emphasis added) [49] The decision in the case of Hamidah Fazilah Sdn Bhd v Universiti Tun Hussein Onn Malaysia (supra) in the High Court was affirmed by the Court of Appeal on 28.2.2017 in Civil Appeal No. W-02(IM)(C)-1597- 08/2016. [50] In fact a similar argument was mounted in this case to buttress the argument that parties had intended the reference to arbitration as optional at the instance of the Contractor. [51] Learned counsel for the Plaintiff submitted that the fact of an option available to the Contractor to proceed either with Arbitration or Litigation can be gathered from some other Conditions in the Contract, for example, Condition 45, which expressly recognizes the right of the Plaintiff to bring a dispute arising between itself and the Defendant, to Court. Condition 45 provides as follows: “No certificate of the E.R. under any provision of this Contract shall be considered as conclusive evidence as to the sufficiency of any work, Equipment, materials or goods to which it relates, nor shall it relieve the Contractor from his liability to amend and make good all defects, imperfections, shrinkages, or any other faults whatsoever as provided by this Contract. In any case, no certificate of the E.R. shall be final and binding in any dispute between the Employer and the Contractor if the dispute is brought whether before an arbitrator or in the Courts” (emphasis added) 20 [52] As pointed out earlier the Employer may proceed to Court because the route of resolving disputes via arbitration is open only to the Contractor and not the Employer. Obviously when there is a Claim by the Employer and a Counterclaim by the Contractor invariably the issue of the finality of E.R. Certificate shall be reopened and reviewed. [53] Conversely the Employer might have no objection to the Contractor proceeding to Court to resolve the disputes or that the Employer have taken further steps in the proceedings in Court such that they have lost their right to apply for a stay of the proceedings under section 10 AA 2005. [54] I do not think one should read Condition 45 so narrowly as to confine it to just one scenario when a few permutations are probable. [55] In Hamidah Fazilah Sdn Bhd v Universiti Tun Hussein Onn Malaysia (supra) the High Court rejected the argument that the arbitration agreement had been negated by the parties’ agreement to submit to the jurisdiction of the Court as follows: [53] I find no contradiction between the applicability of the arbitration clause in the said contract document in cl 67.0 and the cl 70.0 in relation to the submission of parties to the jurisdiction of the High Court. [54] As we are all aware, when it comes to certain reliefs in aid of arbitration and more so when it comes to setting aside and enforcement of an arbitral award, the parties seeking such reliefs would still have to come to the relevant court for assistance. To avoid bickering over what law to apply and which court to apply for such reliefs, parties have addressed this issue at the outset in governing law clause. As both the parties are incorporated in Malaysia and carrying out their business here and as the project is here, it makes 21 every sense for the laws of Malaysia to apply. Parties have agreed to submit to the exclusive jurisdiction of the courts of Malaysia where there is a need to come to the Malaysian courts to apply for interim measures such as an injunction for instance under s 11 of the Arbitration Act 2005 or for setting aside the award under s 37 or to refer a question of law under s 42 or under s 38 for enforcement of the arbitral award. [55] Section 11 of the Arbitration Act 2005 reads as follows: 11 Arbitration Agreement and Interim Measures by High Court

A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and the High Court may make the following orders for:

security for costs;

discovery of documents and interrogatories;

giving of evidence by affidavit;

appointment of a receiver;

securing the amount in dispute, whether by way of arrest of property or bail or other security pursuant to the admiralty jurisdiction of the High Court; [Am. Act A1395: s.5]

the preservation, interim custody or sale of any property which is the subject-matter of the dispute;

ensuring that any award which may be made in the arbitral proceedings is not rendered ineffectual by the dissipation of assets by a party; and 22

an interim injunction or any other interim measure. (emphasis added) [56] Where a harmonious interpretation is possible in an apparent contradiction at first reading, that interpretation is to be preferred lest the baby is thrown out together with the water in the bath tub. It must not be forgotten that such clauses are present in almost all standard form contracts and here we are dealing with the PWD Form DB contract. I cannot read cl 70.0 here as reflecting the intention of the parties to abandon arbitration altogether after having addressed their mind on the procedure to be followed before a reference to arbitration is made and when arbitration can be commenced as well as the consequences of proceeding with arbitration and the obligations of the parties set out in 11 subclauses in cl 67.0.” [56] It is important at this stage to ask what does the auxiliary verb “may” qualify. Here it qualifies the options of either not proceeding further after the E.R.’s decision or no decision from him or to proceed further. If the Plaintiff Contractor chooses to proceed further he has contractually committed himself to arbitration for there is no indication that he may refer the dispute to litigation. [57] Indeed the whole of the Condition is entitled “Arbitration.” It is not a contrast between 2 options i.e. arbitration or litigation. It is a contrast between requiring reference to arbitration or not to require such a reference. [58] To compel him to refer the dispute to arbitration with the use of the word “shall” rather than “may” for example, would constrain him to proceed further after either the E.R. has made a decision or after he has not made a decision within the time frame. As stated the Contractor may want to 23 proceed no further because he could live with the decision for the time being. [59] In as much as the word “shall” may at times convey a directional rather than a mandatory requirement, likewise the word “may” depending on the context may also denote a mandatory requirement rather than a directional one when the option is exercised. See the case of Wasim Beg v State of Uttar Pradesh AIR 1998 SC 1291 and Re Fettel (1952) 52 SR (NSW) 221. [60] By way of example one can refer to section 418 of the National Land Code 1965 which reads: “(1) Any person or body aggrieved by any decision under this Act of the State Director, the Registrar or any Land Administrator may, at any time within the period of three months beginning with the date on which it was communicated to him, appeal therefrom to the Court.

Any such appeal shall be made in accordance with the provisions of any written law for the time being in force relating to civil procedure; and the Court shall make such order thereon as it considers just.” [61] Surely it is not mandatory for the aggrieved person to appeal to the Court for the decision of the Registrar for instance but if he elects to, he must follow the time frame provided of three months and that time frame is not optional and shall follow the relevant prisons in relating to civil procedure. [62] I agree with learned counsel for the Defendant that in the event the Plaintiff does not want to resolve the matter in Arbitration, the Plaintiff may choose to let the matter end there and then. It does not in any event, 24 confers a discretionary right for the Plaintiff to either litigate or arbitrate the matter. [63] Learned counsel for the Defendant submitted with considerable persuasion that it would be futile and indeed against sound commercial sense and it would militate against common sense to execute an Arbitration Agreement which is non-binding, particularly so when the Clause 63 is so comprehensive. [64] I agree with the Defendant that in the current context of Condition 63, it could be said that the Plaintiff was given an ‘option’ to either refer the dispute to arbitration or an ‘option’ to drop the matter. In any event, the Plaintiff was not at liberty to litigate the matter in court. [65] Learned counsel for the Defendant drew support from the cases below where the same argument had been ventilated in other jurisdictions, one from Western Australia and another from the United States. In the case of Pipeline Services WA Pty Ltd v Atco Gas Australia Pty Ltd [2014] WASC 10 at [65]-[67] Martin CJ held that: “[65] Finally Pipeline contends that cl 25.4 is uncertain because it provides that a party “may” refer a dispute to arbitration. However, there is no uncertainty arising from the fact that the parties have agreed that they should be given the option to withdraw their claim from the dispute resolution procedure should they wish to do so. So, in ABB Power Plants Ltd v Electricity Cmr of New South Wales (t/as Pacific Power) (1995) 35 NSWLR 596, the relevant dispute resolution clause provided for determination of disputes by the superintendent appointed under the relevant contract, and further provided that if either party was dissatisfied with that determination that party “may … give notice in writing to the other 25 party requiring that the matter at issue be referred to arbitration”. Handley JA observed: The use of the word “may” in cl 46.2 is readily explicable because a party dissatisfied with the superintendent’s decision, or with the breakdown in the procedure under cl 46.1 may prefer to take the matter no further (599). [66] The same approach may be taken to the proper construction and effect of cl 25.4. No uncertainty arises from the fact that the parties are given an option to refer a dispute to arbitration. However, as cl 25.1(b) provides that no party may commence court proceedings without first complying with cl 25, the clause, on its proper construction, has the effect that if a party decides not to refer the dispute to arbitration it cannot thereafter commence legal proceedings relating to that dispute. [67] For these various reasons there is no uncertainty in cl 25 or in its operation and Pipeline’s contention must be rejected” (emphasis added) [66] A similar approach was taken in the United State of America’s case of Bonnot v Congress of Independent Unions Local 331 F.2d 355 (1964) where the court held that: “We should mention, perhaps, the union's suggestion that the bargaining agreement does not compel arbitration but only provides that either party "may" request it; that it is thus permissive and optional; and that neither it nor the contractor elected to arbitrate. The result claimed to follow is that the arbitration here is not mandatory. We think the result is necessarily the other way. The obvious purpose of the "may" language is to give an aggrieved party the 26 choice between arbitration or the abandonment of its claim. The presence of this or similar language has not prevented the conclusion that a claim, if pressed, is compulsorily subject to arbitration. See American Mfg. Co., supra, p. 565 of 363 U.S. S.Ct. 1343, 4 L.Ed.2d 1403, where the contract provided that differences "may be submitted", and Drake, supra, p. 257 of 370 U.S., p. 1349 of 82 S.Ct. 8 L.Ed.2d 474, footnote 2, where the contract read, "either party shall have the right to refer the matter to arbitration". The Fifth Circuit has flatly rejected the union's argument. Deaton Truck Line, Inc. v. Local 612 etc., International Bhd. of Teamsters, 314 F.2d 418, 422 (5 Cir.1962). We agree. If either Employees Labor Ass'n v. Proctor & Gamble Mfg. Co., 172 F.Supp. 210, 214 (D.Kans.1959), or Wisconsin Motor Corp. v. Wisconsin Employment Relations Bd., 274 Wis. 85, 79 N.W.2d 119, 124 (1956), contains any implication to the contrary, we only note that both were decided before American Mfg. Co. and Drake. We follow the later federal precedents we have cited.” (emphasis added) [67] I have noted that the 2007 and 2010 revisions to the PWD Form 203A included changes to the arbitration clause, where there was an effort to render a reference to arbitration unambiguously mandatory under clauses 65 and 66 respectively, and the difference in wording between the 1983 edition, on which the Conditions of Contract applicable in the present case are based, and the 2007 and 2010 versions are readily apparent. Basically the auxiliary verb “may” has been replaced with “shall” perhaps resting on the implicit default position which is that parties may always choose to live and rest with the E.R.’s decision and not to proceed further. See: Exhibit “A-2” Defendant’s Affidavit. 27 Whether the Defendant’s application should have been made under the Arbitration Act 1952. [68] It is no doubt true that Condition 63(i) of the Conditions of Contract provides as follows: “(i) In this Condition, “reference” shall be deemed to be reference to arbitration within the meaning of the Arbitration Act 1952 (Revised – 1972).” [69] Learned counsel then submitted that based on the authority of Putrajaya Holdings Sdn Bhd v Digital Green Sdn Bhd [2008] 7 MLJ 757, the application should have been made under the Arbitration Act

In Putrajaya Holdings case (supra) the clause reads as follows: “Clause 63.5 of the arbitration agreement states that, “In this Condition, ‘reference’ shall be deemed to be reference to arbitration within the meaning of the Arbitration Act 1952 (Revised 1972)” [70] Learned counsel for the Plaintiff pointed out that Condition 63(i) of the Conditions of Contract is identical to Clause 63.5 of the agreement in the Putrajaya Holdings case where the High Court had observed as follows: “These provisions clearly show that it was always the intention of the parties in the arbitration agreement as clearly manifested by cl 63.5 of the arbitration agreement that the applicable statute to regulate the matter pertaining to arbitration is the 1952 Act”. [71] It was further submitted by the Plaintiff that the Learned High Court Judge further held that in view of clause 63.5, reference should be made to the 1952 Act which may or may not be the prevailing law applicable 28 generally and/or may or may not be repealed at the time the reference or proceedings are taken by the parties and concluded that the 2005 Act had no application to the dispute as follows: “[57] In law, an arbitration agreement, which forms the basis of an arbitration proceedings is an agreement or contract that originates from the consensus of the minds of all the parties to the said agreement. Therefore, the consensus or intention of the parties is the paramount consideration in enforcing the said agreement or contract. The Arbitration statutes cannot impose on what the parties did not agree in the agreement. In the present case, the court is fully satisfied that, based on the above consideration, the parties intended that their Arbitration Agreement is to be governed by reference to the provisions of the 1952 Act, as stipulated in cl 63.5. Based on the above considerations also, the court is satisfied that the law applicable between the Plaintiff and the Defendant is the 1952 Act, and not the 2005 Act. The court is also satisfied that the intention of Parliament in s 51(2) of the 2005 Act is to exclude the applicability of the 2005 Act to the parties where the arbitration agreement was made or where the arbitral proceedings were commenced before the coming into operation of the 2005 Act. The law governing the arbitration agreements and arbitral proceedings shall be the law which would have applied as if the 2005 had not been enacted. In this present case the 1952 Act shall be the law governing the Arbitration Agreement and the arbitral proceedings, since the Arbitration Agreement was made on 12 August 2002, before the coming into operation of the 2005 Act, which came into force on 15 March 2006. 29 [58] That being the case, the provisions of s 10(1) of the 2005 Act under which the present application by the Plaintiff to stay the present proceedings, is not applicable.” (emphasis added) [72] I would adopt the reasoning of Justice See Mee Chun in Syarikat Pembinaan Anggerik case (supra) as follows: [17] In Putrajaya Holdings (supra) the agreement in question was dated 12-8-2002, which was before the coming into force of the current Arbitration Act 2005 on 15-3-2006. It was in light of that the court there stated at page 776 - “…the court is satisfied that the law applicable between the plaintiff and the defendant is the 1952 Act, and not the 2005 Act. The court is also satisfied that the intention of Parliament in s 51(2) of the 2005 Act is to exclude the applicability of the 2005 Act to the parties where the arbitration agreement was made or where the arbitral proceedings were commenced before the coming into operation of the 2005 Act. The law governing the arbitration agreements and arbitral proceedings shall be the law which would have applied as if the 2005 had not been enacted. In this present case the 1952 Act shall be the law governing the Arbitration Agreement and the arbitral proceedings, since the Arbitration Agreement was made on 12 August 2002, before the coming into operation of the 2005 Act, which came into force on 15 March 2006.” [73] In the present case the contracts were entered into in 2013 and 2014, way after the coming into force of the Arbitration Act 2005 on 15.3.2006. [74] Surely the parties cannot agree to be bound by a repealed Arbitration Act 1952 and that any reference to the repealed Act must be read as 30 referring to the new Arbitration Act 2005 which is the prevailing Act governing Arbitration and matters incidental thereto. Whether assuming that there is an ambiguity on the Arbitration Agreement this Court should nevertheless lean in favour of Arbitration [75] There is a growing paradigm shift towards upholding the parties agreement to arbitrate as discernible from the decision in Malaysian Newsprint Industries Sdn Bhd v Bechtel International, Inc & Anor [2008] 5 MLJ 254 where it was held that “The parties are at liberty to decide on how to word the arbitration agreement provided it is clear and certain (Tan Kok Cheng & Sons Realty Co Sdn Bhd v Lim Ah Pat (t/a Juta Bena)). The agreement to arbitrate is just like a contract and it must be clear and certain. It will be construed to be void for uncertainty if its meaning is so ambiguous that it is incapable of being construed to give the agreement a certain degree of certainty. The courts will try to resolve the ambiguity that exists within the agreement, where possible, in order to support the parties in their intention to refer their dispute to arbitration. A classic example would be the case of Mangistaumunaigaz Oil Production Association v United World Trade Inc [1995] 1 Lloyd's Rep 617 where the arbitration agreement stipulated that, 'Arbitration, if any, by ICC rules in London'. It was argued that the phrase 'if any' rendered the arbitration agreement too vague. But the judge disagreed and held that the phrase 'if any' was meaningless and thus could be ignored. Alternatively the judge held that that phrase could be 31 construed as an abbreviation for 'if any dispute arises'. On either conclusion, the court held that the arbitration clause was not uncertain. In sharp contrast would be the case of JF Finnegan Ltd v Sheffield City Council [1989] 43 Build LR 124; [1989] 5 Const LJ 54 where the court held that a clause in the contract that it was a matter for further discussion as to whether disputes under the contract were to be referred to arbitration was said to be too vague. It must be borne in mind that no specific words or form are required to constitute an arbitration agreement. What is certain is this. That the agreement to refer disputes to arbitration is essential and the intention of the parties to arbitrate must be clear and unequivocal. Another certainty is this. That where there is a clear intention to arbitrate, the court will give effect to the agreement even if the clause is incomplete or lack certain particulars (Woh Hup (Pte) Ltd v Property Development Ltd [1991] 3 MLJ 82).” (emphasis added) [76] Further support for the above proposition may be found in the Court of Appeal case of TNB Fuel Services Sdn Bhd v China National Coal Group Corp [2013] 4 MLJ 857 where it was held as follows: “[24] The present form of s 10 of the Arbitration Act 2005 is the result of the amendment to that section which came into force on 1 July 2011 (Act A1395). It is generally accepted that the effect of the amendment is to render a stay mandatory unless the agreement is null and void or impossible of performance. The court is no longer required to delve into the facts of the dispute when considering an application for stay. Indeed, following the decision of the court in CMS Energy Sdn Bhd v Poscon Corp, a court of law should lean towards compelling the parties to honour the 'arbitration 32 agreement' even if the court is in some doubt about the validity of the 'arbitration agreement'. This is consistent with the 'competence principle' that the arbitral tribunal is capable of determining its jurisdiction, always bearing in mind that recourse can be had to the High Court following the decision of the arbitral tribunal.” (emphasis added) Pronouncement [77] For the reasons given above, I am more than satisfied that both the context and syntax of the usage of the auxiliary verb “may” when used in reference to Arbitration in Condition 63(c) and in the context of the whole sentence, both the clauses preceding and succeeding it, point inexorably to the intention of the Plaintiff to proceed to arbitration. [78] I had thus allowed a stay of this proceeding and the Defendant had agreed, for the avoidance of doubt, that the issues of fraudulent misrepresentation be allowed to be raised in the arbitration and further agreed that the arbitrator to be appointed has the jurisdiction to deal with the issue of fraudulent misrepresentation. [79] Liberty to apply. [80] I ordered costs of RM10,000.00 to the Defendant. Dated: 30 October 2018. - signed - LEE SWEE SENG Judge Construction Court High Court , Kuala Lumpur 33 For the Plaintiff : Mahathir Abdullah (Messrs Mahathir) For the Defendant : Alan Wong Teck Wei, Andrew Heng Yeng Hoe, Roger Leong Chun Lim and Lee Kai Jun (Messrs Zain Megat & Murat) Date of Decision: 17 August 2018.