Termination of Proceedings 1) The arbitral proceedings shall be terminated by a final award or by an order of the arbitral tribunal in accordance with subsection (2). S/N Z91q3tOXNkKqmfv4Wjoxdw 2) The arbitral tribunal shall order the termination of the arbitral proceedings where— a) the claimant withdraws the claim, unless the respondent objects to the withdrawal and the arbitral tribunal recognises the respondent’s legitimate interest in obtaining a final settlement of the dispute; b) the parties agree on the termination of the proceedings; or c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. [49] It is pertinent to be aware that the foundation of OASB’s 2nd jurisdictional challenge (under section 34(2)(c) of the Arbitration Act 2005) seeks to cease the CONTINUATION of the arbitral proceedings. Res ipsa of a ‘jurisdictional challenge’ (coupled with the ceasing the continuation of an arbitral proceedings), it is evidently clear that the discontinuation or a ceasing of an arbitration (vide termination) would mean that the arbitration would be stymied and halted even before the arbitration can proceed to be heard and be determined proper. It is a summary termination before or latest being, in the ‘midst’ of the arbitral process due to the 2nd Arbitrator’s belief that the dispute was ‘no longer arbitrable’ owing to the belief that all of the parties’ disputations had been fully determined via the 1st Arbitration (which was certainly far from the actual truth of the matter). The direct effect and consequence of which was that the Respondent-S/N Z91q3tOXNkKqmfv4Wjoxdw Ragawang barred from its rights to be heard and to ventilate its case and complaints before an arbitral panel. [50] Thus, in the hypothetical instance that the 2nd Arbitrator was correct in his decision to terminate the 2nd and 3rd Arbitrations, the Respondent would not have a right to be heard in limine as the dispute was not even arbitrable from the outset. On the contrary, in the opposite instance that the 2nd Arbitrator’s termination of the 2 Arbitrations was wrong, then the Respondent effectively would have been unlawfully deprived its right to be heard before an arbitral panel. [51] The Respondent’s ground to set aside the 2nd Final Award was leveraged on section 37(2)(b) (read together with Section 37 (1)(b)(ii) of the Arbitration Act 2005. In essence, Ragawang contended that the 2nd Final Award ought to be set aside as it was in conflict with the public policy in Malaysia primarily on the grounds that the wrongful termination of the 2nd and 3rd Arbitrations had breached the rule of natural justice (for depriving its right to be heard). [52] The term “public policy” within section 37 (1)(b)(ii) of the Arbitration Act 2005 is an umbrella term which covers a myriad of circumstances (although all the circumstances must not merely be unjust by merit, and must necessarily occasion an injustice that affects and prejudices the basic right of an applicant). Thus, despite the term “public policy” had worn many hats over a plethora of precedents, the immutable rule remains that the conflict or transgression against public policy must not merely be an issue of merit in an arbitration, but must necessarily go to the very fabric of the decision-making process itself. And this typically means that the error in decision-making was so manifest that it had S/N Z91q3tOXNkKqmfv4Wjoxdw breached the rule of natural justice. We refer to the salutary words of the Federal Court in the landmark case of Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 [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 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 S/N Z91q3tOXNkKqmfv4Wjoxdw as well as procedural respect. Instances where the upholding of an arbitral award would shock the conscience, or clearly 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 and had prejudiced the basic right of the applicant.” (Emphasis added.) [53] Considering the above, we are in agreement with the Respondent that a wrongful summary termination of the 2nd and 3rd Arbitrations would certainly deprive the Respondent off of the most rudimentary right in law S/N Z91q3tOXNkKqmfv4Wjoxdw (being the very right to be heard). It goes without saying that allowing or condoning a wrongful finding that a disputation is not arbitrable in limine (during or even before the substantial hearing of an arbitral proceeding) would be immensely injurious to the interest of the public. It would be in the public’s best interest that the Court reinstate and uphold an Applicant’s right to arbitrate its dispute as and when an arbitrator’s summary termination of an arbitration was found to be erroneous. [54] With all of the above in mind (and to determine whether or not the 2nd Final Award had occasioned a breach of natural justice) we must now proceed to determine whether the Learned JC was correct in finding that res judicata does not apply and that the 2nd Arbitrator was in error to find that Ragawang’s dispute was no longer competent (or no longer arbitrable). [55] As we have iterated in the previous heading of this judgment, the 2nd Arbitrator had ceased or terminated the 2nd and 3rd Arbitrations primarily on the basis that Ragawang’s claims had already been determined as early as the 1st Arbitration. On the contrary, we find that this issue does not simply lie on the principle of estoppel per rem judicatam (or res judicata) but instead a complex web of estoppel by conduct. It was less estoppel in the sense of Court determination, but more so estoppel in view of the conducts and admissions of parties. [56] For clarity, we are of the considered view that the two Appeals here ought NOT to be allowed but yet still warranted a minor variation in the Learned JC’s decision (Not to reinstate the 2nd Final Award, but only to limit the scope of Ragawang’s claim in any upcoming arbitration post the S/N Z91q3tOXNkKqmfv4Wjoxdw 1st Final Award). The Learned JC’s ultimate decision to set aside the 2nd Final Award by and large was proper and valid. [57] The only qualm we have identified against the Learned JC’s decision was specific and limited to the proper scope of claim that Ragawang may still mount for further arbitration (if any) after the 1st Arbitration. It was certainly wrong for the 2nd Arbitrator to find that the entirety of Ragawang’s claims were barred or estopped by res judicata. [58] For the record, we find that the Appellant instead ought to be barred by estoppel (by its own conduct and admission) from insisting that the 1st Final Award had finally determined all of Ragawang’s remainder claims against OASB. As aptly appreciated by the Learned JC, the Appellant cannot go against its own admission and insistence (within its 1st Jurisdictional Challenge) that 1st Arbitrator only had jurisdiction (at that time) to determine OASB’s claim for LAD and Ragawang’s claim for L&E. Thus, at the time of the conclusion of the 1st Arbitration (and upon the award of the 1st Final Award) Ragawang’s claims and disputation against the subject APCs, the Architect’s Final Account, claims for late payment interests had not been addressed let alone been determined vide the 1st Arbitration. [59] It would be gravely unjust for the Appellant on one breath contend that the 1st Arbitrator had no jurisdiction to decide on Ragawang’s claims and on the same singular breath also contend the exact opposite – in that the 1st Arbitrator had already determined all of Ragawang’s claim vide the 1st Arbitration. No party ought to be allowed to blow both and called and shift the goal post at his whims and fancies (see: Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 ; of S/N Z91q3tOXNkKqmfv4Wjoxdw Cheah Theam Kheang v City Centre Sdn Bhd & Other Appeals (2012) 2 CLJ 16; Vila Mekar Sdn Bhd v Wong Yie Dee [2025] MLJU 2104; Ho Yau Hong & Ors v How Yaw Ming and another appeal [2023] MLJU 933). [60] Unfortunately, on the same principle and authorities, estoppel should also equally set in against Ragawang when Ragawang had acquiesced to the full settlement (via OASB’s unilateral set off exercise) of all remainder sum under the subject APCs and the release of the retention sum. Within the realm of commercial disputes, it is a rule of law that if one party had taken a certain stance in a letter to the counterparty, the counterparty must necessarily respond in protest, or at least reply to the letter recording the counterparty’s dissent. A failure to do so may (although not necessarily automatically) be deemed to be an admission. Depending on the circumstances of a given case, if the letter so issued was in nature critical against the recipient, then it ought to be equally critical against the recipient to respond and record its stance or narrative in opposition to the contents of that letter. (see PECD Construction Sdn Bhd v Freehold Point Sdn Bhd [2008] MLJU 127; Mohd Zin bin Omar & Anor v Jentayu Padu Sdn Bhd [2017] MLJU 407; Halim bin Saad v Chan Yok Peng [2021] 3 MLJ 717 ; Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v Lim Woon Katt [2016] 5 MLJ 220) [61] Especially in the Appeal before us, OASB in its Set Off Letter had made clear pronouncement as to the extent and remainder balance unpaid under the subject APCs (interim Progress Certificates 32 & 33) as well as the retention sum and its intention to set off the total amount due from its entitlement for LAD as awarded in the 1st Final Award. It ought to be S/N Z91q3tOXNkKqmfv4Wjoxdw incumbent upon the Respondent-Ragawang to voice out their dissatisfaction against the supposed inadequacy or shortfall in OASB’s calculation of the settlement vide a set off. But instead Ragawang had not only failed to record and respond against the set off exercise, Ragawang had even adopted the set off exercise within its Statement of Claim in the 2nd Arbitration. [62] Thus, despite the fact that the 1st Final Award have not barred the Respondent’s claims by res judicata, the Respondent’s apparent lack of response (as an admission) would necessarily bar the Respondent’s claim under the subject APCs, and retention sum by the operation of estoppel by conduct. Coupled with the fact that the set off exercise had later found further legitimacy by Court Order (up to the Federal Court), it is even more compelling for us to find that it no longer lies before the Respondent to stake any other or further claims in reliance of the subject APCs or for the retention sum. [63] Therefore, although we largely agree with the Learned JC that the Respondent’s claims ought not be barred by res judicata, we are not in total agreement as to the true extent and scope of claim that Ragawang may still claim against the Appellant post the 1st Final Award. [64] Thus, WITHOUT DISTURBING THE LEARNED JC’S ULTIMATE DECISION TO SET ASIDE THE 2ND FINAL AWARD, we find that estoppel does apply to bar any further claim under the interim Progress Certificates 32 & 33 (subject APCs) and any claim for the release of the retention sum. Thus, Ragawang’s other claims (inclusive of the alleged under-certified claims within the Architect’s Final Account, alleged late payment interest accrued for the delay in paying the alleged under-S/N Z91q3tOXNkKqmfv4Wjoxdw certified amount under the Architect’s Final Account, or alleged refund of sponsorship payment) as itemised in paragraphs 19.4, 19.5, and 19.6 of Ragawang’s Statement of Claim (“remainder claims”) HAVE NEVER BEEN DETERMINED before any arbitration (and thus can still be claimed via arbitration by Ragawang against OASB): [65] For full clarity, our findings above at no point in time whatsoever addresses or determines the merit of any of Ragawang’s remainder claims that can still be mounted against OASB. The final truth and actual entitlements of both parties regarding Ragawang’s remainder claims should appropriately be put to arbitration proper. [66] We shall not delve into the Appellant-OASB’s contention on the alleged non-compliance of the multi-tier dispute resolution clause as OASB had never applied to set aside the 2nd Final Award. S/N Z91q3tOXNkKqmfv4Wjoxdw [67] It must be reminded that the 2nd Arbitrator had dismissed OASB’s bid to prove want of jurisdiction by contending that the Respondent had not complied with the terms of the multi-tier dispute resolution clause. Despite this negative finding against OASB, OASB had never moved its own Application to set aside the 2nd Final Award. OASB cannot simply piggyback or ride on Ragawang’s Applications and Appeals to mount a ‘backdoor challenge’ against the 2nd Final Award. Thus, in actuality, the High Court was never clothed with the jurisdiction to entertain OASB’s complaint from the outset as there was no Application by OASB before the High Court for the High Court to be seised with the jurisdiction to enquire into the 2nd Arbitrator’s decision as to the multi-tier dispute resolution clause. In short, since OASB had never moved its own Application to set aside the 2nd Final Award, OASB in essence had admitted to the correctness of the 2nd Arbitrator’s dismissal of OASB’s contention regarding the multi-tier dispute resolution clause. [68] In any case, both the 2nd Arbitrator and even the Learned JC had both found that the Respondent had indeed issued its disputation against the Architect’s Final Account (on 11.4.2019) within the 3 months’ limitation period from the issuance of the Final Account (16.1.2019). Whether or not the disputation was merely a ‘document dump’ (as contended by OASB) or a genuine disputation, is a matter on merit that should be determined in an arbitration. There is no instance whatsoever that Ragawang had ‘admitted’ to or ‘failed to dispute’ the Architect’s Final Account. [69] In view of all of the above deliberation under this heading, we accordingly answer the Issue in the POSITIVE. The Learned JC was certainly correct to find that there were valid grounds to set aside the 2nd Final Award (save and except the Learned JC’s findings on the arbitrability S/N Z91q3tOXNkKqmfv4Wjoxdw of Ragawang’s claim under the Subject APCs and for the retention sum). E. OUR DECISION [70] All of the above deliberations considered, we find that, there are no merits in the Appeals. Albeit, we accordingly exercise our jurisdiction and authority to VARY the Learned JC’s decision (specific and limited to the scope of remainder claims that Ragawang may still claim against OASB via further arbitration). Thus, we hereby dismiss both the Appeals with costs. The Learned JC’s decision to set aside the 2nd Final Award is hereby upheld and affirmed. [71] Lastly, we order that the Appellant do pay costs of RM15,000.00 to the Respondent (in each Appeal), subject to allocatur. Dated 4th September 2025 SGD -------------------- (AZIMAH BINTI OMAR) JUDGE COURT OF APPEAL For the Appellant - Messrs. Cheah Teh Su