Multazam Development Sdn Bhd v FGV Plantations (MALAYSIA) Sdn. Bhd. (Dahulunya dikenali sebagai FELDA Global Ventures Plantations (Malaysia) Sdn. Bhd.) (WA-24C(ARB)-28-05/2024)

2.1 There is no prejudice suffered by the Plaintiff as the losing party in the Arbitration to pay the Award Sum into Court or to a stakeholder account held by the Defendant’s solicitors pending the determination of the Setting Aside OS.

2.2 There is credible evidence to show that the Plaintiff will be unable to comply with the Award in the event its Setting Aside OS is unsuccessful. i. The CCM search conducted on the Plaintiff shows that the Plaintiff is in a weak financial position. ii. Despite the Defendant’s letters of demand dated 5.4.2024 and 24.5.2024, the Plaintiff has, as of the date of the Defendant’s application, failed, refused and/or neglected to comply with the Award and make payment of the Award Sum or any portion thereof to the Defendant.

2.3 The Award is final and binding on the parties. The Plaintiff is bound to make payment of the Award Sum to the Defendant as the winning party in the Arbitration.

2.4 The Plaintiff has filed the Setting Aside OS to set aside the Final Award.

2.5 The Setting Aside OS is merely instituted by the Plaintiff to delay and avoid making payment of the Award Sum to the Defendant.

2.6 Such grounds as stated in the affidavits to be filed in support of this application and/or as may be submitted by the counsel during the hearing of this application. Brief Background [3] FGV appointed Multazam Development Sdn Bhd (“MDSB”) as the design and build contractor for a project known as “Design & Build and Development of Estate Workers’ Housing Comprising of Workers’ Hostel and 6 Door Single Storey Terrace and Other Ancillary Works in Peninsula Malaysia & Sarawak” (“Project”). [4] The contract between the parties for the Project comprised, amongst others, the following:

A Letter of Award and Acceptance dated 30.1.2018 (“LoA”) as supplemented by a ‘Surat Kelulusan Pengesahan (Endorsement) Kali Pertama’ dated 04.04.2018; and

(ii) The PWD Standard Form for Design & Build Contract PWD Form DB (Rev 1/2010) (“Conditions of Contract”) with Special Provisions to the Conditions of Contract. [5] Disputes between MDSB and FGV were, in 2019, referred to arbitration by MDSB (“Arbitration”) with MDSB as the “Claimant” and FGV as the “Respondent”, with the Arbitration being administered by the Asian International Arbitration Centre (“AIAC”) and conducted under the AIAC Arbitration Rules 2018 and the Arbitration Act 2005 before a sole arbitrator, Mr. Christopher Leong (“Tribunal”). [6] In the Arbitration, MDSB allegedly advanced significant monetary claims against FGV for “unpaid work done” and damages for “wrongful termination”. FGV disputed MDSB’s claims and advanced counterclaims for damages for breach of contract. [7] Following extensive pleadings, documents, witness testimony and written and oral submissions from both sides over a period of 4½ years, the Arbitration concluded in 2024 with the Tribunal rendering the Final Award, the Additional Award and the Corrective Award (collectively “Award”). [8] The net effect of the dispositive provisions in the Award, was that the Tribunal dismissed MDSB’s claims and awarded FGV the following amounts in respect of its counterclaims:

8.1 a principal sum of RM12,517,317.10 with interest at 5% per annum from 11.1.2024 until full satisfaction;

8.2 representation costs of RM294,000.00; and 8.3 costs of the award of RM125,680.55 (being the costs of the award paid by FGV in excess of the RM83,787.03 that was awarded to be borne by FGV under paragraph 355(11)(b) of the Final Award). (collectively “Award Sum”) [9] On 6.5.2024, MDSB filed the Setting Aside OS herein. [10] On 2.7.2024, FGV commenced an action for the enforcement of the Award under section 38 of the Arbitration Act 2005 (via Kuala Lumpur High Court Originating Summons No. WA-24C(ARB)-42-07/2024) (“Enforcement OS”). Analysis & Findings [11] I will start by referring to section 37 of the Arbitration Act 2005 which reads “(7) Where an application is made to set aside an award, the High Court may order that any money made payable by the award shall be brought into the High Court or otherwise secured pending the determination of the application.” [12] I have since heard learned counsels submit on Enclosure 28 at the hearing thereto and have also read the respective written submissions thereto. [13] I have considered the parties respective submissions with regards the Application For Security pursuant to section 37 of the Arbitration Act 2005 (“AA”) under Enclosure 28 herein which are as follows:-

13.1 FGVP has raised various grounds in support of Enclosure 28 being inter alia a. the Plaintiff, MDSB has no intention to honour the Award; b. MDSB’s impecuniosity; c. the issue of prejudice between the parties; and d. that the application to set aside the Award by MDSB is not bona fide and a mere delay tactic.

13.2 The Plaintiff, MDSB, has on the other hand contended that Enclosure 28 is a tactical maneuver to deny it a reasonable opportunity to be heard in relation to its Setting Aside Application under enclosure 1 herein. [14] I do hold that the ‘justice of the case’ is the test to be applied in a matter involving section 37 AA as per Mechanalysis Sdn Bhd (In Liquidation) v Appraisal Property Management Sdn Bhd [2016] 11 MLJ 566 where Mohd Nazlan JC (as His Lordship then was) had held: “[59] Pursuant to s 42(8)(b) of the AA, the court clearly has the requisite discretion to determine and make an order that the award sum adjudged by the arbitral tribunal to be payable to the winning party be brought into court or otherwise secured, provided that the exercise of such discretion as empowered under the said statutory provision does not in any non-inconsequential fashion, detrimentally affect or prejudice the losing party who is now seeking to set aside the arbitration award” [15] In exercising my discretion under section 37(7) AA and in applying the above said test, I have duly considered that there had been a lengthy and costly arbitration between the parties which culminated in the Award in favour of FGVP as well as MDSB’s alleged impecuniosity to which I have viewed the Companies commission of Malaysia’s search report dated 6.3.2024. [16] In this respect I have also noted that MDSB has despite its assertions of financial impecuniosity been able to fund its expenses in the Arbitration proceedings. [17] Be that as it may I have also observed that MDSB does not deny that it is financially impecunious as it was set up solely for the purpose of performing the works under the Project and that its income was derived solely from the Project. [18] I have also found that FGVP had known of MDSB’s financial position since the beginning of the Project and to now raise it as a ground to support its security application herein is in my considered view improper and inequitable. [19] I have therefore in coming to my decision balanced the prejudice as between the parties i.e whether FGVP has shown to this Court that it will be prejudiced by its inability to enforce the Award as opposed to the prejudice that maybe occasioned on MDSB in seeking to set aside the Award. [20] All in, after having carefully considered the issues raised by both sides, I hold that the risk to MDSB in not being afforded an opportunity to be heard in Court will outweigh the possible inability to enforce the Award as impecuniosity alone is to my mind not the sole ground to order security under section 37(7) AA. To this I have relied on the ratio in the case Ooi Meng Khin v Amanah Scotts Properties (Kl) Sdn Bhd & Ors And Another Appeal [2013] 5 MLJ 773; [2013] MLJU 718; [2013] 5 AMR 68 which although related to a case involving security for costs, I had found useful in determining the issue before me, as the Court of Appeal, Mohd Hishamuddin JCA in delivering the judgment of the Court had held therein that the court must also consider other circumstances in exercising its discretion. [21] In the circumstances, I hereby dismiss the application for security under enclosure 28 herein with costs in the cause. Dated: 29th day of November 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Mohanadass Kanagasabai and Thomas Shaun Mathews (Messrs Mohanadass Partnership] COUNSEL FOR THE DEFENDANT: Ooi Huey Miin, Dianne Hong Sze Wei and Lim Ven Shen (Messrs Raja, Darryl & Loh)