Mrcb Builders Sdn. Bhd. v Brilliant Star Construction (M) Sdn Bhd (WA-24C(ARB)-34-05/2024)

Originating Summons No. WA-24C(ARB)-34-05/2024 (OS 34) is MRCB Builders Sdn Bhd (“MRCB”) an application to set aside the Award dated 18.4.20204 (“Award”) made in favour of Brilliant Star Construction Sdn Bhd (“BSC”) pursuant to inter alia section 37(1)(a)(iv)(v), (b)(ii), section 37(2)(b)(i) and/or 37(2)(b(ii), and section 37(6) of the Arbitration Act 2005.

On the other hand Originating Summons No WA-24C(ARB)-49-07/ 2024 (OS 49) is BSC’s application to enforce the Award as binding and enforceable by entering a judgement against MRCB in the High Court of Malaya in accordance with section 38 of the Arbitration Act 2005.

OS 34 is premised on the following grounds

3.1 the Learned Arbitrator (“Arbitrator”) had breached the rules of natural justice in connection with the making of the Award

3.2 the Award contains matters beyond the terms and/or scope of the submission to Arbitration Back Ground Facts [4] The Plaintiff is the construction arm of MRCB and is in the business of, inter alia, construction works. [5] The Defendant is in the business of outsourcing and supplying manpower, local and foreign workers, to the construction sector in Malaysia [6] The Plaintiff and the Defendant entered into a Manpower Supply Agreement on 31.1.2019 (Ref: V5- 02072018)2018.CONS.MBSB.0251 3/TNB BALAI ISLAM/024), (“MSA 024”) in which the Defendant was appointed by the Plaintiff to supply and manage the manpower for a project named ‘TNB HQ Campus Development (Phase 1) – The Construction and completion of Balai Islam and Staff Quarters at Part of Lot 490 and Lot 6266, Kuala Lumpur for Tenaga Nasional Berhad’ (‘TNB Balai Islam Project’) for an original sum of RM142,344.00 exclusive of GST (‘the Original Contract Sum’), for a fixed term of two (2) months, from 17.12.2018 to 17.2.2019. [7] Pursuant to Clause 10.2 of the MSA 024, the Defendant was required to supply ‘Skilled Workers’ to the Plaintiff. The ‘Skilled Workers’ supplied by the Defendant was to be for reinforced concrete (‘RC’) work, which includes, inter alia, plastering of cement mortar to make good of the casted RC finishes. The rate for these ‘Skilled Workers’

a Declaration that the Plaintiff is entitled to the backcharge for the repair of 275kV Cable amounting to RM3,821,809.18;

a Declaration that the Plaintiff is entitled to the backcharge for the poor workmanship and defective works amounting to RM516,122.31;

a Declaration that the Plaintiff is entitled to the backcharge for the penalties amounting to RM600.00;

a Declaration that the Plaintiff is entitled to other backcharge (i.e.: stamping fee) amounting to RM180.00;

an Order that the Defendant is to pay the Plaintiff the sum of RM2,492,277.98 being the net amount due and owing from the Defendant as per the proposed statement of final account as of 17.1.2020;

an Order that the Defendant is to pay the Plaintiff the sum of RM80,028.41, being the interests incurred by the Plaintiff for the

an Order that the Defendant is to pay the Plaintiff the sum of RM190,000.00 as the legal costs incurred by the Plaintiff; and

pre-award interest at the rate of 5% per annum on the total amount payable to the Plaintiff from the date of the Proposed Statement of Final Account. [23] Pursuant to the Final Award and save and except for prayer (d), which is for the stamping fee, the Arbitrator dismissed the Plaintiff’s claim and allowed the Defendant’s entire counterclaim. In respect of the Plaintiff’s claim, the Arbitrator had dismissed the following reliefs/prayers sought against the Defendant:-

Backcharge for the repair of the 275kV Cable amounting to RM3,821,809.18;

Order for the Defendant to pay the Plaintiff the sum of RM80,028.41, being the interest incurred by the Plaintiff to repair the damaged 275kV Cable;

Backcharge for poor workmanship and defective works amounting to RM516,122.31;

Backcharge for penalties amounting to RM600.00; and

Order for the Defendant to pay the Plaintiff the sum of RM190,000.00 as the legal costs incurred by the Plaintiff. [24] In respect of the Defendant’s counterclaim, the Learned Arbitrator allowed and ordered as follows:-

The Plaintiff is to pay the Defendant a total sum of RM1,629,601.56, being the balance remaining unpaid by the Plaintiff under MSA 024;

The Plaintiff is to pay the Defendant a total sum of RM74,089.73, being the balance remaining unpaid by the Plaintiff under MSA 027 (hereinafter referred to as the “Awarded Sum”);

The Awarded Sum together with the Interest and Awarded Costs shall be paid by the Plaintiff to the Defendant not later than five

weeks from the date of the Final Award (“Due Date for Payment”);

The Plaintiff to pay simple interest at the rate of 5% per annum on the Awarded Sum from 23.2.2020 until the due date for payment;

The Plaintiff is to pay simple interest at 5% per annum on the Awarded Sum from the due date for payment until the date of full payment of the Awarded Sum; and

The Plaintiff is to pay the Defendant the Awarded Costs of RM649,695.05. Court’s Analysis & Findings [25] MRCB submits that by reference to the pleadings in the Arbitration, the Award

deals with a dispute not contemplated by or not falling within the terms of submission to Arbitration; and

contains decision on matters beyond the scope of the submission to Arbitration [26] It is also submitted that the Arbitrator had breached the rules of natural justice in connection with the making of the Award thereby rendering the same contrary to the public policy of Malaysia. In this respect, MRCB’s learned counsel had argued that the Arbitrator disregarded the mandatory statutory requirement under sec 33A of the CIDB Act 1994 for accreditation. [27] It is contended in furtherance of the said mandatory statutory requirement under sec 33A of the CIDB Act 1994 that BSC is required to provide ‘skilled workers’ under Schedule 2 of the MSA 024 with regards carpentry, bar bending and plastering and that such skilled workers must be duly registered and accredited under the said sec 33A of the CIDB Act 1994 and that it is a mandatory requirement that cannot be disregarded by BSC. [28] Section 33A of the CIDB Act 1994 reads “(1) No construction site supervisor or skilled construction worker shall be involved or engaged, or undertake to be involved or engaged as a construction site supervisor or skilled construction worker unless he is accredited and certified by the Lembaga and holds a valid certificate issued by the Lembaga under this Act.

For the purpose of this Act, skilled construction workers are those specified in the Third Schedule.” [29] The Third Schedule of the CIDB Act specifies the categories of a “skilled construction worker” as THIRD SCHEDULE [Section 2 and subsection 33A(2)]

1.

Blaster and painter

Air conditioning and mechanical ventilation specialist

Drywall installer

Ceiling installer

Petrochemical fitter

Roof truss installer

Precast concrete installer

Formwork system installer

Block system installer

Bar bender

Wireman Bricklayer

Plant operator

Crane operator

Chargeman

Cable jointer

Slinger and rigger

Painter

Tiler

Carpenter

Welder

Concretor

Plasterer

Plumber

Scaffolder [30] It was contended by MRCB that section 33A of the CIDB Act 1994 being a statutory requirement was recognized by the Arbitrator in the Award. However, MRCB further contends that the Arbitrator then erroneously concluded that it was not the parties intention to ensure the workers accreditation under the CIDB Act on the basis that the MSA 024 did not explicitly mention such accreditation as to be complied with by BSC. [31] After perusing the Award at exhibit MBSB 1 in OS 34, I find that the Arbitrator had

made reference to sec 33A of the CIDB Act 1994 in the context of, and I quote from the Award “…determine(ing) the following facts will assist the Tribunal to ascertain the Parties intention at the material time”

(ii) “MSA 024 requires the Respondent’s workers to be registered with CIDB vide clause 10.2(i) but does not expressly state that the skill workers supplied are to be accredited under the CIDB Act” [32] I further find that the Award then concludes on this point that

32.1 “..the Claimant is equating ‘skilled workers’ under MSA 024 with the ‘skilled construction workers’ under section 33A of the CIDB Act. However I find that, while MSA 024 is for the supply of workers in accordance with the requirements stipulated in the Bill of Quantities as per Schedule 2, Schedule 2 refers to ‘skilled workers’ as opposed to the ‘skilled construction worker’ , which is the phrase under section 2 of the CIDB Act. Section 33A has been conveniently left out in the MSA 024. If the parties really intended that the workers supplied under the MSA 024 are to be both registered and accredited with CIDB, without which will amount to breach of contract on the part of the Respondent, it should be expressly spelt out in MSA 024”

32.2 “..the Claimant is under a duty to check the accreditation status of the Respondents Skilled Workers. It is rather unreasonable foe the Claimant who is equally responsible to comply with the law…to have omitted to check the accreditation status. Of the Respondent’s workers before allowing them to enter the Project Site for the entire duration of MSA 024…” [33] From my findings above, I do hold that the Arbitrator did not make any specific finding on the breach of 33A of the CIDB Act 1994 and I agree with learned counsel for BSC that the Arbitrator’s decision only related to whether the MSA 024 was not breached and that the Arbitrator’s findings stated that there was no violation of 33A of the CIDB Act 1994. [34] BSC however in turn further argues that the crux of the issue in dispute was essentially whether BSC workers are skilled workers under sec 33A of the CIDB Act 1994 which was part of MRCB’s “Issues To be Tried” before the Tribunal and as such the Arbitrator had not introduced any new issue nor decide on a matter she created or added to the Arbitration. [35] After due consideration of the arguments put before this Court on this point, I hold that BSC must comply with the statutory requirement under section 33A of the CIDB Act to provide the ‘skilled construction workers’ that are both registered and accredited with CIDB as the same is a mandatory requirement under the CIDB Act. Accordingly, the absence of the word ‘accredited’ in the MSA does not in this Court’s view exempt BSC from complying the aforesaid statutory obligation. [36] Be that as it may, does this Court’s determination render the Arbitrator’s Award to be set aside in accordance with the Arbitration Act 2012? For this I must examine MRCB’s Points of Claim to determine if the issue of ‘skilled construction workers’ was indeed an issue before the Tribunal. [37] I have examined MRCB’s Points of Claim at exhibit MRCB 3 in particular paragraphs 27, 29 and 31 thereto and noted that it had stated as follows:- Paragraph 27 At the outset, the Claimant avers that the Respondent was well aware of the requirement to provide “Skilled Workers” pursuant to the Third Schedule…..and this was made known and communicated to the Respondent by the Claimant Paragraph 29 However, in breach of, inter alia, clause 10./3 of the Manpower Supply Agreement, the Respodent had provided almost all unskilled workers…… In this regard the Claimant avers that the workers provided by the Respondent did not fall within the definition of “Skilled Workers” under Act 520 Paragraph 31 As the Respondent did not provide “Skilled Workers” in accordance with the Manpower Supply Agreement … [38] I acknowledge that the Award is final and binding on the parties as per section 36 of the Arbitration Act which states “(1) An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied upon by any party by way of defence, set-off or otherwise in any proceedings in any court.” [39] Is this the ‘new difference’ as mentioned in Kerajaan Malaysia V Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126 where the Court of Appeal held “…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 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. 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. 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. This basic principle arose in the High Court case of Government of the Lao People’s Democratic Republic v Thai-Lao Lignite Co Ltd and Hongsa Lignite Co Ltd [2013] 3 MLJ 409, where Lee Swee Seng JC (as he then was) said: Whilst it is generally stated that under the Model Law regime as reflected in the AA 2005, there is a palpable shift towards non interference in international arbitration award especially on issues of error of law so called, yet where jurisdiction is concerned, the Model Law does recognise and respect court’s interference where arbitrators have acted outside their jurisdiction and this principle is reflected in s 37(1)(a)(iv) and (v) of the AA 2005 …’ (at p 18 of the judgment).” [40] In essence the new difference referred to in the above mentioned case is that the Tribunal has no jurisdiction to resolve disputes which have not been referred to it in the submission to arbitration, as a party in the Tribunal cannot raise a new dispute in an arbitration without the consent of the other party. From my observation of the Points of Claim, the issue of skilled workers under sec 33A of the CIDB Act 1994 is a dispute which was raised in the Arbitration proceedings. [41] In Ocned Water Technology Sdn Bhd v UEM Builders Bhd & Anor And Another Case [2023] MLJU 3044 it was held that “The Legal Principles [24] Based on the provisions in the AA 2005 and the case authorities to date, the legal principles in relation to an application to set aside an award under s 37 AA 2005, and specifically, pursuant to the subparagraphs relied upon by UB-EP in the Setting Aside Application, may be summarised as follows:

(a)an award made by an arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties (see sub-s 36(1) AA 2005);

(b)the court shall not intervene in matters governed by the AA 2005 except where so provided in the said Act (see s 8 AA 2005);

(c)the grounds enumerated in s 37 are exhaustive and the court cannot set aside an award for reasons other than those that are listed. Further, the said grounds need to be construed narrowly as they represent exceptions to the finality of arbitration awards as stipulated in s 36 AA 2005. This is to avoid devaluing the arbitration agreement that arbitral awards are final and binding and also to preserve the autonomy of the forum selected by the parties by minimising judicial interference in arbitral awards [see Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 (FC) and Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd &

(d)when considering the exercise of discretionary power under subparagraphs 37(1)(a)(iv), 37(1)(a)(v) and 37(1)(b)(ii) AA 2005, the court does not sit as an appellate court and hence, the merits of the parties’ respective case before the arbitral tribunal are not open to scrutiny [see The Government of India v Cairn Energy

(e)in respect of subparagraphs 37(1)(a)(iv) and (v) AA 2005, the disputes which the parties choose to submit for arbitration will demarcate the jurisdiction of the arbitral tribunal in the arbitral proceedings between them. An arbitral tribunal has no jurisdiction to resolve disputes which have not been referred to it in the submission to arbitration. In deciding whether an award deals with a dispute not contemplated by or not falling within the terms or scope of submissions to arbitration and whether an award contains decision on matters beyond the scope of the submission to arbitration, the dispute that was referred to the arbitrator must be determined by reference to the pleadings which were submitted by the parties during the arbitration. Pleadings in arbitral proceedings provide a convenient way for the parties to define the jurisdiction of the arbitrator by setting out the precise nature and scope of the disputes in respect of which they seek the arbitrator’s adjudication. The burden lies on the party applying to set aside an award to prove, on a balance of probabilities, that there is a “new difference” which was not relevant to the determination of the dispute, and it was not an issue in dispute between the parties. In this regard, the parties’ pleadings and submissions during the course of the arbitration are relevant considerations [see PT Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR 98, Perwira Bintang Holdings Sdn Bhd v Kerajaan Malaysia [2014] 11 MLJ 561 (HC) and Kerajaan Malaysia v Perwira Bintang Holdings Sdn

(f)with regards to subparagraphs 37(1)(b)(ii) and 37(2)(b)(i) and

(ii) AA 2005 –

(i)in applying the concept of public policy for the purpose of setting aside an award under s 37 of the AA 2005, it must be read narrowly and more restrictively. 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. The injustice must have real effect and had prejudiced the basic rights of the applicant;

(ii)the court’s intervention should be sparingly used, and the court must be compelled that a strong case has been made out that the arbitral award conflicts with the public policy of Malaysia. 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 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 this power must be exercised judiciously and only when it is just to do so. In considering whether the discretion should be exercised, the court must undertake an evaluation of relevant factors such as the seriousness, magnitude or materiality of the breach; its nature and its impact; whether the breach would have any effect on the outcome of the arbitration and leaving room for casual breach or occasional error; costs of rehearing and delay in raising the complaint. The policy of encouraging arbitral finality will dissuade the court from exercising discretion when the breach is relatively immaterial or was not likely to have affected the outcome [see Kyburn Investments Ltd v Beca Corporate Holdings Ltd [2015] 3 NZLR 644 Sigur Ros Sdn Bhd v. Master Mulia Sdn Bhd [2018] 8 CLJ 291(CA), Jan De Nul (supra) and Pancaran Prima (supra)]; and

(iii)the guiding principles on the exercise of residual discretion when an application for setting aside an award is grounded on breach of natural justice are as follows: “First, the court must consider: (a) which rule of natural justice was breached; (b) how it was breached; and (c) in what way the breach was connected to the making of the award; Second, the court must consider the seriousness of the breach in the sense of whether the breach was material to the outcome of the arbitral proceeding; Third, if the breach is relatively immaterial or was not likely to have affected the outcome, discretion will be refused; Fourth, even if the court finds that there is a serious breach, if the fact of the breach would not have any real impact on the result and that the arbitral tribunal would not have reached a different conclusion the court may refuse to set aside the award; Fifth, where the breach is significant and might have affected the outcome, the award may be set aside; Sixth, in some instances, the significance of the breach may be so great that the setting aside of the award is practically automatic, regardless of the effect on the outcome of the award; Seventh, the discretion given the court was intended to confer a wide discretion dependent on the nature of the breach and its impact. …” [see paragraph 53 in Master Mulia Sdn Bhd v. Sigur Ros Sdn Bhd [2020] 6 MLRA 51at pp 80 - 81 (FC)].” [42] Following Ocned Water Technology Sdn Bhd (supra), the Court should thus wherever possible uphold the party autonomy principle in arbitration. It is also trite that the Court must also exercise minimal curial intervention in arbitration matters as held in Government Of India, The v Cairn Energy India Pty Ltd & Anor [2011] 6 MLJ 441; [2011] 6 AMR 573; [2012] 3 CLJ 423 where the Federal Court held “[53] And as Scrutton LJ put it '… if you refer a matter expressly to the arbitrator and he makes an error of law you must take the consequences; you have gone to an arbitrator and if the arbitrator whom you choose makes a mistake in law that is your look-out for choosing the wrong arbitrator; if you choose to go to Caesar you must take Caesar's judgment' (see African & Eastern (Malaya), Ltd v White, Palmer & Co, Ltd (1930) 36 LI L REP 113; cited with approval by the Court of Appeal in Dato' Teong Teck Kim & Ors v Dato' Teong Teck Leng [1996] 1 MLJ 178; [1996] 2 CLJ 249).” [43] As to what is the definition of ‘public policy’ , I refer to Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 where the Federal Court held 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. [44] In coming to my decision, I have also looked at BSC’s counter claim which consists of

24.1 A declaration that MSA 024 dated 31.1.2019 was mutually terminated by the Parties and that the termination took effect on 15.7.2019; 32 24.2 A declaration that the present Arbitral Tribunal has no jurisdiction to arbitrate the Claimant’s claim against the Respondent for the damage of 275kV high tension cable in the amount of RM3,821,809.18 as the claim and incident do not fall within the purview of MSA 024;

24.3 In addition or in alternative to paragraph (c), a declaration that the Claimant has no cause of action to claim against the Respondent for the damage of 275kV high tension cable in the amount of RM3,821,809.18 as the incident was a result of the Respondent’s negligence itself or, alternatively, AR Mega Winner Trading Sdn Bhd’s negligence or, alternatively, both the Claimant’s and AR Mega Winner Trading Sdn Bhd’s negligence;

24.4 A declaration that the Claimant was acting beyond the purview or, alternatively, outside the scope of MSA 024 by instructing the Respondent’s workers to work unilaterally at a project site in Jalan Faraday, Kuala Lumpur which was not a location mutually agreed to by the Parties under the Agreement;

24.5 A declaration that the Respondent is entitled to a total sum of RM1,629,601.56 or such other amount as may be assessed by the Arbitral Tribunal being the balance remains unpaid by the Claimant under MSA 024; 33 24.6 An award or order that the Claimant is to pay the Respondent a total sum of RM1,629,601.56 being the balance remains unpaid by the Plaintiff under MSA 024 or such other amount as may be assessed by the Arbitral Tribunal;

24.7 Damages to be assessed by the Arbitral Tribunal;

24.8 Pre-award interests at the rate of 5% per annum on the total amount payable by the Claimant to the Respondent which is calculated from the due date of payment of each Progress Claim until the date of the award or any other period as may be deemed fit by the Arbitral Tribunal;

24.9 Post-award interests at the rate of 5% per annum on the total amount payable by the Claimant to the Respondent from the date of the award until full realisation or any other period as may be deemed fit by this Arbitral Tribunal;

24.10 An award or order that the Claimant is to pay the Respondent a sum of RM190,000.00 or any other sums as may be assessed by the Arbitral Tribunal being the legal costs incurred by the Respondent in this arbitration;

24.11 The costs of this arbitration and the costs of the award; and 24.12 Such further or other reliefs as the Arbitral Tribunal deems fit. [45] I have also looked at the Award on the reasonings and decision of the Adjudicator on the Counter Claim which is as follows:-

the Adjudicators decision was based on her findings on amongst others the effect of sec 33A of the CIDB Act on the MSA

(ii) the Adjudicator consequently decided that a) The Parties had, by conduct, extended the duration of MSA 024 to 15.7.2019 b) MSA 024 was mutually terminated on 15.7.2019 c) The Claimant is not entitled to reduce the skilled workers; rate of RM11 hour to unskilled workers; rate of RM8.13 per hour. d) The skilled workers of the Respondent are entitled to be paid at the RM11.20 per hour e) The times registered in both biometric attendance records and Kong Ca be accepted as the record of the attendance of the Respondent’s work hence, be used in the calculation of the working time and payment. Hence, the Respondent is entitled to be paid base on both the time recorded in the report from the biometric attendance system and the Kong Cards verified b the Claimant (ISSUE D). f) The Claimant is not entitled to deduct the break time taken prior to the commencement of overtime, and the working hours on the Christmas Day g) Except the stamping fee of RM180.00, the Respondent is not liable to pay the Claimant the sum of RM2,492,277.98, being the net amount due and owing from the Respondent as per the proposed statement of final account as of 17.1.2020 (ISSUE D). [46] Thus, taking guidance from the aforesaid referred cases as well as applying the said principles to the case before me and after a careful evaluation of all the factors in this case including the contents of MRTCB’s affidavit in enclosure 79 enclosing the email dated 7.11.2023 from the arbitrator to the parties and the Arbitrator’s Practice Direction No. 1 in BSC’s affidavit in enclosure 80, I hold that this Court’s conscience has been shocked as the said error was a serious and material error on the part of the Arbitrator which in this Court’s view was likely to have affected the outcome of the Award whereby the Arbitrator would likely have reached a different conclusion as to the effect of sec 33A of the CIDB Act on the MSA . [47] I thus hold that the case before me involves a fundamental and substantive principle of law and that the enforcement of the Award would be injurious to the public good and public interest. Such injustice would accordingly have a real effect and prejudice on the basic rights of MRCB and the public in general. As such I am exercising this Court’s power to set aside the Award under s 37 of the AA 2005. [48] In the circumstances as this Court has held that the Award should be set aside on the aforesaid ground, all the other issues raised by MRCB such as a defect in the chain of reasoning by the Arbitrator, and other breaches of natural justice including the right to be heard and treated with equality will now be academic. [49] I will however address the issue of costs of RM114,000.00 which the Arbitrator awarded to BSC for maintaining 2 witnesses over a period of 36 months allegedly over monthly salaries of RM4,000.00 per witness. I must reiterate that the Arbitrator has a discretion in awarding costs. However, it is trite that any discretion must be exercised judiciously. [50] After looking and examining the Arbitrator’s ground on the issue of costs of RM114,000.00 to BSC for maintaining 2 witnesses I hold that this is both excessive and unreasonable as it appears to be unsupported by any evidence such as pay slips or letters of appointment and such costs were not sought by BSC. [51] I was referred to by counsel for MRCB to the unreported Federal Court case of Ketua Setiausaha Kementrian Dalam Negeri & Anor v Salconmas Sdn Bhd where the damages therein were held to be exorbitant and unjustified which contravened the basic principles of substantive law and thus ordered to be set aside, and I respectfully apply such a principle herein. [52] At the end of the day, MRCB has sought and prayed that this Court remit the matter to a differently constituted arbitration tribunal for final determination. In support of this, MRCB contends that our Arbitration Act 2005 is based on the UNCITRAL Model Law on International Commercial Arbitration (Model Law) and thus section 37 of our Arbitration Act 2005 is in pari materia with section 34 of the Model Law. [53] I have looked at both section 37 of our Arbitration Act 2005 and section 34 of the Model Law, as well as to the Indian case of Juggilal Kamlapat v. General Fibre Dealers Ltd. AIR 1962 SC 1123 : 1962 Supp (2) SCR 101 and the Singapore Court of Appeal case of AKN and another v ALC and others and other appeals [2015] SGCA 58[2016] 1 SLR 966 which was relied on by MRCB to support their contention to remit the matter to a differently constituted arbitration tribunal for final determination and I have found, with respect, that these cases do not support MRCB’s point. In fact, a reading of the said cases in essence states inter alia that the court had no power to remit matters to a new tribunal and that an arbitrator having signed his award becomes functus officio. [54] I hold after a perusal of section 37 of our Arbitration Act 2005 that sub section (3) only allows for the Award to be severed where the decision can be separated from those not so submitted whilst sub section (4) only empowers the Court to “adjourn the proceedings for such period of time as it may determine in order to allow the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside” where appropriate. [55] As the decision in the Award before me with regards section 33A of the CIDB Act 1994 cannot be separated from the other parts of the Award and the Arbitrators Award is final, which in essence means that the Tribunal is now functus officio after making its Award, I hold that this Court has no power to order the dispute to a differently constituted arbitration tribunal for final determination. [56] For the record, I have in coming to my decision herein also considered enclosure 80 which was filed by BSC with respect to only the pre trial directions as per this Court’s directions given on 16.1.2025 but not as to any further submissions taken by BSC as per paragraph 10 vis a vis section 10 of the Arbitration Act 2005 which was not directed by this Court. [57] This Court will therefore in the circumstances, grant Order In Terms for prayers (a) and (e) of OS 34. [58] In accordance with my Order above, this Court hereby dismisses enclosure 1 of OS 49. Dated: 12th day of February 2025 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 PEGUAM BELA BAGI PIHAK PLAINTIF(OS34) / DEFENDANT(OS49): Faisal Moideen, Maximilian Tai Kam Sen and Syarifah Ameerah (Messrs Moideen & Max] PEGUAM BELA BAGI PIHAK DEFENDAN(OS 34) / PLAINTIFF(OS49): Krishna a/l Dallumah, Ahmad Syiimir Suffian, Shahrysham Kamran and Farah Syazmin Azman (Messrs Amar Syiimir Izzat & Sham]