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TUNE GROUP SDN BHD [Company No.: 200701040836 (798868-P)]
WA-24NCC(ARB)-21-03/2022
High Court of Malaysia4 Aug 2022
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Citations and treatment detected automatically from later judgments and the authorities this decision relies on.
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“In the Matter of the Arbitration Award dated 8 March 2022 of the Arbitrator (Mr. Robert Amirtharaj Lazar) in the above Arbitration (received on 10 March 2022) And In the Matter of Section 37 of the Arbitration Act, 2005 And in the Matter of Order 69 of the Rules of Court 2012 BETWEEN”
“ation' and 'the award contains decisions on matters beyond the scope of the submission to arbitration', William & Kawharu supra at 17.5.4 thus commented on the first limb of art. 34(2)(a)(iii) of the NZ Arbitration Act (the equivalent of section 37(1)(a)(iv) and (v) of AA 2005): **Note : Serial number will be used to v”
“] MLJU 1537; [2013] 2 CLJ 395; Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Sdn Bhd [2009] MLJU 793; [2010] 5 CLJ 83; and Lesotho Highlands Development Authority v Impregilo SpA and others [2005] UKHL 43). In this regard, the court needs to recognise the autonomy of the arbitral process by encouraging finali”
“g PT Prima International Development v Kempinski Hotels SA and other appeals [2012] SGCA 35; [2012] 4 SLR 98, the Singapore Court of Appeal case of PT ASURANSI JASA INDONESIA (PERSERO) V DEXIA BANK SA[2006] SGCA 41; [2007] 1 SLR 597; Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126; [2015] 1 CLJ 61”
“tice (see: Ajwa For Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd & another appeal [2011] MLJU 1537; [2013] 2 CLJ 395; Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Sdn Bhd [2009] MLJU 793; [2010] 5 CLJ 83; and Lesotho Highlands Development Authority v Impregilo SpA and others [2005] UKHL 43)”
“ts in that section are fulfilled (which is the case here) and there are no grounds for refusal of recognition and enforcement under s 39 of the AA”. [79] In Bauer (M) Sdn Bhd v Embassy Court Sdn Bhd [2010] LNS 1260, the High Court held: " ……….. The grounds for refusal of recognition are exhaustive and if none of these”
“for all intent and purposes, is to promote one-stop adjudication in line with the international practice (see: Ajwa For Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd & another appeal [2011] MLJU 1537; [2013] 2 CLJ 395; Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Sdn Bhd [2009] MLJU 793; [20”
“n 20th December 2019’, the ‘new difference’ examined against the pleadings would be outside the scope of arbitration, citing PT Prima International Development v Kempinski Hotels SA and other appeals [2012] SGCA 35; [2012] 4 SLR 98, the Singapore Court of Appeal case of PT ASURANSI JASA INDONESIA (PERSERO) V DEXIA BANK”
“ard for reasons other than those that are listed.” See Pancaran Prima at [141]. See also Carr v Gallaway Cook Allan [2014] 1 NZLR 792 (SC NZ) at paragraph 76, ADG and another v ADI and another matter [2014] SGHC 73; [2014] 3 SLR 481 (HC SG) at paragraph 97 and KB v S & ORS - [2016] 2 HKC 325 (CFI HK) at paragraph 22. T”
“A at [2], [10], [11], [21] to [24], **Note : Serial number will be used to verify the originality of this document via eFILING portal 19 Kluang Health Care Sdn Bhd v Lee Yong Beng [2016] 1 CLJ 281;[2015] MLJU 773 HC at [36], [37] & [40];”
“ent to set aside an award for breach of the rules of natural justice.” [22] The Chief Justice of Singapore, Menon CJ, in delivering the judgment of the Court of Appeal in AKN v ALC [2015] 3 SLR 488; [2015] SGCA 18 cautioned the courts against attempts by ingenious counsels to disguise what is substantially an appeal on”
“v) and (v) AA was explained in the judgment of the Federal Court delivered by Jeffrey Tan FCJ in Thai-Lao Lignite Co Ltd & Anor v. Government of the Lao People's Democratic Republic [2017] 9 CLJ 273; [2017] MLJU 1196: "[197] In relation to 'the award deals with a dispute not contemplated by or not falling within the te”
“g the “active remedy” of applying to set aside the Award in its Setting Aside OS, i.e. OS 17. In Kejuruteraan Bintai Kindenko Sdn Bhd v Serdang Baru Properties Sdn Bhd and another originating summons [2017] MLJU 1332, Lee Swee Seng J (now JCA) explained “’Active remedy’ is understood to mean an award debtor applying to”
“couraging finality; and its advantage as an efficient alternative dispute resolution process should not be undermined.’ [53] In Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd and another appeal [2017] MLJU 1530, the Court of Appeal stated: “[19] …”
“1546 CA at [33], [41] and [44]; MRCB Engineering Sdn Bhd v Lee Hon Min & Others [2018] 1 LNS 835 HC at [22] - [27]; The Government of India v Vedanta Ltd (legal successor to Cairn India Ltd) & Anor [2018] MLJU 630 HC at [64];”
“aiver seeks to achieve. Thus, a genuine claim on the ground that an award would offend the public policy of the state cannot be easily waived – Belinda Ang J in Baz v Bba and others and other matters [2018] SGHC 275; [2020] 5 SLR 266. [18] Having considered the rival contentions of the parties, my short answer to resol”
“specifically under s.42 which was appealed and dealt with at a later part of this judgment - Huawei Technologies (Malaysia) Sdn Bhd v Maxbury Communications Sdn Bhd & Another Appeal [2019] 6 CLJ 588; [2019] MLJU 1755 CA at [38], [41] to [43] which held that error of law could only be appealed under s. 42 and not s. 37”
“tion or mandate of the arbitrator. To hold otherwise would result in every award being subject to review, and in effect, appeal by the courts; Ketua Setiausaha Dalam Negeri & Anor v Salconmas Sdn Bhd [2020] MLJU 476 HC at [60] on the effect of the deletion s.42 and that all arbitral awards can no longer be challenged o”
“of the subject arbitration in order to decide whether the allegations made by Respondents seeking to impugn the Award on the basis of breach of natural justice have substance – BZW and another v. BZV [2022] SGCA 1 [31] It is clear from the ‘objective record’ that the issue whether there was a valid acceptance by Gurtaj”
Auto-detected from judgment text; not a substitute for a citator check.
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TUNE GROUP SDN BHD [Company No.: 200701040836 (798868-P)]
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KALIMULLAH BIN MASHEERUL HASSAN (NRIC No.: 580315-07-5319)
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LIM KIAN ONN (NRIC No.: 561012-05-5691)
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CHRISTOPHER MARK ANTHONY LANKESTER (NRIC No.: 650805-10-5243) … PLAINTIFFS AND PADDA GURTAJ SINGH (Singapore Passport No.: K0031196E) … DEFENDANT HEARD TOGETHER WITH IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) ORIGINATING SUMMONS NO. WA-24NCC(ARB)-21-03/2022 In the matter of the Arbitration Act 2005 and in the matter of an Arbitration between Padda Gurtaj Singh (Singapore Passport K0031196E) (Claimant) and 1. Tune Group Sdn Bhd (Company 200701040836 / 798868-P);
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Kalimullah Bin Masheerul Hassan (NRIC No. 580315-07-5319); 3. Lim Kian Onn (NRIC No. 561012-05- 5691); 4. Christopher Mark Anthony Lankester (NRIC No. 650805-10- 5243) (collectively, Respondents); And In the matter of a Final Award published by Mr Robert Lazar on 8.3.2022 and the Correction to Final Award dated 24.3.2022; And In the matter of Section 38 of the Arbitration Act 2005 and Order 69 of the Rules of Court 2012; And In the inherent jurisdiction of this Honourable Court. BETWEEN PADDA GURTAJ SINGH (Singapore Passport No.: K0031196E) … PLAINTIFF
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TUNE GROUP SDN BHD [Company No.: 200701040836 (798868-P)]
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KALIMULLAH BIN MASHEERUL HASSAN (NRIC No.: 580315-07-5319)
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LIM KIAN ONN (NRIC No.: 561012-05-5691)
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CHRISTOPHER MARK ANTHONY LANKESTER (NRIC No.: 650805-10-5243) …DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] Originating Summons WA-24NCC(ARB)-17-03/2022 (“OS 17”) was filed by the Plaintiffs (collectively “the Respondents”) against the Defendant (“Gurtaj”) to set aside a Final Award dated 8.03.2022 (“the Final Award”) and the Correction to Final Award dated 24.3.2022 (collectively “the Award”) pursuant to s. 37 of the Arbitration Act 2005 (“AA”). [2] Gurtaj as Plaintiff in OS No: WA-24NCC(ARB)-21-03/2022 (“OS 21”) applied to recognise and enforce the Award. [3] Both OS 17 and OS 21 were heard together as the Award is either recognised and not set aside, or not recognised and is to be set aside. [4] After having read the cause papers, considered the submissions and heard oral arguments, I dismissed OS 17 and allowed OS 21. This judgment contains the reasons for the decisions delivered on 04.08.2022. Background Facts [5] Gurtaj and the Respondents together with others are shareholders in a company known as Tune Talk Sdn Bhd (“the company”). The shareholders and the company are parties to a Shareholders Agreement dated 23.12.2008 (“SHA”). The SHA contained an arbitration agreement in Clause 16 that reads: “16.1 If any controversy, claim or dispute arises out of or in relation to this Agreement (including any question regarding its existence, validity or termination) or with respect to any breach thereof, the Parties shall seek to resolve the matter amicably through discussions between the Parties or by way of mediation. Only if the Parties fail to or compromise within sixty (60) days from the date of written notice of dispute, the aggrieved Party shall seek arbitration as set forth in this Clause 16.
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16.2 Any such controversy, claim or dispute shall be finally settled by arbitration by the Regional Centre for Arbitration Kuala Lumpur (“RCAKL”) in accordance with the UNCITRAL Rules.
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16.3 The number of arbitrators shall be one (1), to be mutually agreed upon by the parties, failing which the arbitrator shall be appointed by the Director of the RCAKL.
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16.4 All arbitration proceedings shall take place at the RCAKL, in accordance with the Rules of the RCAKL and the language to be used in the arbitral proceedings shall be English. The decision of the arbitrators is final and is binding on the Parties and the Parties agree to exclude any right of application or appeal to any courts of competent jurisdiction in connection with any question of low arising in the course of the arbitration or in respect of any award made.” [6] A dispute arose between the Respondents and Gurtaj as to whether there was a valid and binding contract for the sale of 1,232,870 shares at RM3.00 per share in the company from the Respondents to Gurtaj. The dispute was referred to arbitration before a sole arbitrator, Mr Robert Amirtharaj Lazar, a senior practising lawyer (“arbitrator”), appointed by the Asian International Arbitration Centre (‘AAIC’). Gurtaj as the claimant in the arbitration claimed for specific performance, with the Respondents defending. The arbitrator found in favour of Gurtaj and on 8.03.2022 and 24.3.2022 respectively, the arbitrator issued the Final Award and the Correction to Final Award. [7] The Award runs to 38 pages. The dispositive decision in the Award reads as follows: “i. A declaration that there is a concluded contract for the Claimant (Gurtaj) to purchase from the Respondents 850,934 shares in Tune Talk Sdn Bhd at RM3.00 per share as follows: a) Tune Group Sdn Bhd: 666,563 units of TTSB shares for RM1,999,689; b) Kalimullah bin Masheeral Hassan: 83,568 units of TTSB shares for RM250,704; c) Lim Kian Onn: 83,568 units of TTSB shares for RM250,704; and d) Christopher Mark Anthony Lankester: 17,235 units of TTSB shares for RM51,705. ii. Specific performance of the contract between the Claimant (Gurtaj) and the Respondents as set out in (i) above in that the Respondents are to transfer the requisite number of shares as set out above to the Claimant (Gurtaj) and that the Claimant (Gurtaj) is required to furnish payment for the same, such acts to take place within 15 days from 8.3.2022 (the date of the publication of the award) to the Respondents or such other date as may be mutually agreed or as ordered by the High Court of Malaya in the event an application is made pursuant to section 38(1) of the Arbitration Act 2005. iii. Costs to the Claimant (Gurtaj) of party and party costs in the sum of RM135,000.00; and iv. That the Respondents either jointly or severally pay the Claimant (Gurtaj) the sum of RM63,722.00 being the Claimant (Gurtaj)’s share of the Arbitrator’s costs and the sum of US Dollars 2873.12 being the Claimant (Gurtaj) ’s share of the administrative costs of the AIAC.” [8] The Respondents seek to set aside the Award and on 22.03.2022 filed OS 17 whilst Gurtaj, on the other hand, on 22.03.2022 filed OS 21 to recognise and enforce the Award. Parties’ case on Setting-aside the Award (OS 17) [9] The Respondents’ case focused on 4 heads of complaint:
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9.1 The Final Award deals with a dispute not contemplated by nor falling within the terms of submission to the Arbitration:
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9.1.1 the pleaded case of Gurtaj was that of a ‘concluded contract on 13.3.2020’ under the December 2019 Offer, the Arbitrator proceeded to redefine Gurtaj’s case and concluded instead on a ‘new case’ i.e. there was ‘a valid and binding contract on 20th December 2019’ despite the absence of tender of payment on 20.12.2019; with the result that the Respondents has been taken by complete surprise;
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9.1.2 the Arbitrator did not address ‘Broad Issue 1’ (no concluded contract) and ‘Broad Issue 2’ (conduct of claimant – inconsistent and devoid of equity; no basis for suggesting ‘ready, willing and able’) specifically raised by the Respondents;
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9.1.3 the Arbitrator did not address ‘Broad Issue 3’ and ‘Broad Issue 4’ which stemmed from the Respondents’ ‘Celcom Challenge’ – Celcom had taken a stand that the 5 December 2019 offer has lapsed and a fresh offer is to be made by the Respondents of their shares; there is also the ‘other pending arbitration’; Gurtaj’s tactical non-inclusion of the indispensable parties including Celcom makes Gurtaj’s claim of a concluded contract unsustainable;
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9.2 The Final Award in so far as it introduces a “new difference” would be beyond the scope of submission to arbitration;
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9.3 The subject matter of the dispute is not capable of settlement by arbitration under Malaysian law;
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9.4 Matters in the Award falling beyond the scope of arbitration in connection with the “new difference’ and the issue of indispensable party would also fall to be decided under those provisions on public policy and breach of natural justice. [10] The Award is not final and binding and given that the Award should be set aside, the Respondents contended that Gurtaj’s application to enforce and recognise the Award in OS 21 should be dismissed. [11] Gurtaj disagreed and argued that the grounds advanced by the Plaintiffs to set aside the Award:
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11.1 are without basis in law and in fact and in the nature of an appeal; the issues decided upon, fell within the parties’ contemplation;
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11.2 do not fall within any of the grounds set out in s.37 AA (grounds to set aside an award) or s. 39 AA (grounds to refuse registration of an award);
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11.3 invoked neither provision in s. 18 (3) and (5) AA (i.e. Arbitrator did not exceed his jurisdiction nor acted in excess of authority); and
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11.4 do not seek appropriate direction under s.37(6) AA; and is an abuse of court process and OS 17 ought to be dismissed in limine. [12] Gurtaj further argued that the Award is final and binding; OS 17 was filed in breach of clause 16.4 of the SHA and on this ground alone, OS 17 should be dismissed, and consequently, OS 21 be allowed.
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Procedural Approach to hearing OS 17 and OS 21 [13] The Respondents’ “passive remedy” in resisting OS 21 adopted the same grounds in pursuing the “active remedy” of applying to set aside the Award in its Setting Aside OS, i.e. OS 17. In Kejuruteraan Bintai Kindenko Sdn Bhd v Serdang Baru Properties Sdn Bhd and another originating summons [2017] MLJU 1332, Lee Swee Seng J (now JCA) explained “’Active remedy’ is understood to mean an award debtor applying to set aside an Award and ‘passive remedy’ as in an award debtor resisting or opposing an application by an award creditor to recognize and enforce the Award.” [14] At the outset, during case management, I had directed both OS17 and OS 21 to be heard together as I held the view that the Award is either recognised and not set aside, or not recognised and is to be set aside. This is also in accord with Kejuruteraan Bintai Kindenko where Lee Swee Seng J pronounced; “[23] Granted, in a domestic arbitration, both an application for setting aside under section 37 and also a corresponding application under s 38 of the AA 2005 to recognize and enforce the Award, generally the Court would hear both applications together as one would be a flip side of the other in that if the Award is set aside than correspondingly it will not be enforced and conversely if not set aside it would generally be enforced. “
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(ii) Finality of the Award [15] I will deal with the point on finality of the Award and whether OS 17 should be dismissed in limine. [16] Gurtaj argued in effect that OS17 is unsustainable ab initio:
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16.1 The Award is final and binding on the parties by virtue of s. AA: ‘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 court.’
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16.2 Parties to the SHA (including Gurtaj and the Respondents) have expressly agreed to accept the Final Award – and waived their right to challenge the same:
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16.2.1 Clause 16.4 of the SHA provides: ‘All arbitration proceedings shall take place at the RCAKL, in accordance with the Rules of the RCAKL and the language used in the arbitral proceedings shall be English. The decision of the arbitrators is final and binding on the Parties and the Parties agree to exclude any right of application or appeal to any courts of competent jurisdiction in connection with any question of law arising in the course of the arbitration or in respect of any award made.’ (counsel’s emphasis)
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16.2.2 Clause 16.2 of the SHA reads: ‘Any such controversy, claim or dispute shall be finally settled by arbitration by the Regional Centre for Arbitration Kuala Lumpur (“RCAKL”) in accordance with UNCITRAL Rules.’ (emphasis added).
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16.3 The parties are bound by the terms of the arbitration agreement which they have voluntarily executed citing in support amongst others, Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd [2016] 5 MLJ 417 FC (a case that interpreted Section 10(1) of the AA at [53] and [56]. [17] The Respondents on the other hand contended that:
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17.1 An arbitration agreement may not confer powers on a tribunal to conduct an arbitration in a manner contrary to public policy and any attempt to contractually exclude the right to review for breach of natural justice is ineffective, citing amongst others, Noble China Inc et al v Lei Lei v Noble China Inc et al [Indexed as: Noble China Inc v Lei], 42 OR (3d) 69, [1998] OJ No 4677; Methanex Motunui Ltd v Spellman [2004] 1 NZLR 95 as upheld by the Court of Appeal in Methanex Motunui Ltd v Spellman [2004] 3 NZLR 454; Popack v Lipszyc, [2015] OJ No 2790, 2015 ONSC 3460;
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17.2 The statutory right to apply to set aside an arbitral award which offends public policy cannot be waived - lululemon athletica canada inc v Industrial Color Productions Inc, [2021] BCJ No 13, 2021 BCSC 15;
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17.3 The importance of ensuring that an award does not offend the most basic notion of morality and justice outweighs the principle of finality in arbitration that the doctrine of waiver seeks to achieve. Thus, a genuine claim on the ground that an award would offend the public policy of the state cannot be easily waived – Belinda Ang J in Baz v Bba and others and other matters [2018] SGHC 275; [2020] 5 SLR 266. [18] Having considered the rival contentions of the parties, my short answer to resolve this preliminary point lies in s. 37 AA providing statutory exceptions to finality in arbitration awards. I prefer to stand guided by the Federal Court in a neatly encapsulated passage in Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd and another appeal [2021] 1 MLJ 1: “[142] The grounds enumerated in section 37 need to be construed narrowly as they represent exceptions to the finality of arbitration awards (section 36). 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 minimizing judicial interference in arbitral awards: Jan De Nul (supra).” (emphasis added) Some Basic Principles [19] The Federal Court has outlined the considerations to be made when determining an application under s. 37 AA, in Jan De Nul (M) Sdn Bhd v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413: “[57] The court must evaluate the nature and impact of the particular breach in deciding whether the award should be set aside under s 37. The court must also consider the background policy of encouraging arbitral finality and minimalist intervention approach to be adopted in line with the spirit of UNCITRAL Model Law. The effect of ss 8, 9, 37 and 42 of the AA 2005 is that the court should be slow in interfering with or setting aside an arbitral award. The court must always be reminded that constant interference of arbitral award will defeat the spirit of the AA 2005 which for all intent and purposes, is to promote one-stop adjudication in line with the international practice (see: Ajwa For Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd & another appeal [2011] MLJU 1537; [2013] 2 CLJ 395; Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Sdn Bhd [2009] MLJU 793; [2010] 5 CLJ 83; and Lesotho Highlands Development Authority v Impregilo SpA and others [2005] UKHL 43). In this regard, the court needs to recognise the autonomy of the arbitral process by encouraging finality; and its advantage as an efficient alternative dispute resolution process should not be undermined. [58] The scope of public policy ground for setting an arbitral award could only be invoked in deserving case i.e., in instances where it appears a violation of the most basic notions of morality and justice. It covers fundamental principles of law and justice in substantive as well as procedural respect. Instances where the upholding of an arbitral award would shock the conscience, or clearly 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 (see: Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86).” [20] As such, in my judgment, the Respondents has to demonstrate substantial or patent injustice that has prejudiced their basic rights in order to succeed in the present application. [21] The relief of setting aside is also not automatically mandated by s.
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The court has a residual discretion in the matter. As to how this discretion is to be exercised, I have adopted the Federal Court’s pronouncements and set this out in Segi Astana Sdn Bhd v. Malaysia Airport Holdings Bhd [2022] 7 MLJ 91, [2021] 1 LNS 1650 as follows: “[57] A year later, in the case of Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 9 CLJ 213, [2020] 12 MLJ 198, after reviewing local and international cases and academic authorities on this matter, the Federal Court speaking through Vernon Ong, FCJ enunciated: [53] In light of the above, we think that the guiding principles on the exercise of residual discretion when an application for setting aside an award is grounded on breach of natural justice may be stated as follows: First the Court must consider (a) which rules of natural justice was breached; (b) how it was breached; and (c) in what 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 outcomes, 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. Therefore, the materiality of the breach and the possible effect on the outcome are relevant factors for consideration by the Court; and Eighth, whilst materiality and causative factors are necessary to be established, prejudice is not a pre-requisite or requirement to set aside an award for breach of the rules of natural justice.” [22] The Chief Justice of Singapore, Menon CJ, in delivering the judgment of the Court of Appeal in AKN v ALC [2015] 3 SLR 488; [2015] SGCA 18 cautioned the courts against attempts by ingenious counsels to disguise what is substantially an appeal on the legal merits of an arbitral award as a challenge on process failures during the arbitration: “39. In the light of their limited role in arbitral proceedings, the courts must resist the temptation to engage with what is substantially an appeal on the legal merits of an arbitral award, but which, through the ingenuity of counsel, may be disguised and presented as a challenge to process failures during the arbitration. A prime example of this would be a challenge based on an alleged breach of natural justice. When examining such a challenge, it is important that the court assesses the real nature of the complaint. Among the arguments commonly raised in support of breach of natural justice challenges are these:
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(a)that the arbitral tribunal misunderstood the case presented and so did not apply its mind to the actual case of the aggrieved party; (b)that the arbitral tribunal did not mention the arguments raised by the aggrieved party and so must have failed to consider the latter’s actual case; and (c)that the arbitral tribunal must have overlooked a part of the aggrieved party’s case because it did not engage with the merits of that part of the latter’s case. Although such arguments may be commonly raised, more often than not, they do not, in fact, amount to breaches of natural justice.” [23] As such, the Court must be wary if the applicants in applying to set aside the award are seeking to widen the strictly narrow grounds for challenge in s.37 and s.39 AA, and not be carried away by the applicants’ resort to convoluted or fanciful arguments and interpretation of the facts, evidence and law which at any rate are not within the province of the court but is to be as found and determined by the tribunal as arbiter of fact and evidence. [24] The Court is to take note of trite principles as follows:
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24.1 The court is not an appellate court, and does not sit in appeal of a final arbitral award - Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 CA at [15]; Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113 CA at Held (1) and [14] – [16]; Infineon Technologies (M) Sdn Bhd v Orisoft Technology Sdn Bhd (previously known as Orisoft Technology Bhd) and another application [2011] 7 MLJ 539 HC at [75];
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24.2 An applicant cannot challenge the merits of, re-open and/or re-argue the findings and decision of the Tribunal on the substantive issues of the dispute decided by Tribunal - Master Mulia (supra) FC at [54]; Brunsfield Project Management Sdn Bhd v Ingeniur Bersekutu Consulting Engineers [2015] 1 LNS 1546 CA at [33], [41] and [44]; MRCB Engineering Sdn Bhd v Lee Hon Min & Others [2018] 1 LNS 835 HC at [22] - [27]; The Government of India v Vedanta Ltd (legal successor to
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24.3 The Award cannot be challenged on alleged points of law or interpretation of law. This would have been permissible only specifically under s.42 which was appealed and dealt with at a later part of this judgment - Huawei Technologies (Malaysia) Sdn Bhd v Maxbury Communications Sdn Bhd & Another Appeal [2019] 6 CLJ 588; [2019] MLJU 1755 CA at [38], [41] to [43] which held that error of law could only be appealed under s. 42 and not s. 37 of the AA 2005. All errors of fact and/or law are errors committed within the scope of jurisdiction or mandate of the arbitrator. To hold otherwise would result in every award being subject to review, and in effect, appeal by the courts; Ketua Setiausaha Dalam Negeri & Anor v Salconmas Sdn Bhd [2020] MLJU 476 HC at [60] on the effect of the deletion s.42 and that all arbitral awards can no longer be challenged on the ground that the arbitrator had fallen into an error of law;
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24.4 The limited grounds of challenge are as set out in ss. 37 and 39 AA - Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 CA at [12];
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24.5 Breaches of natural justice and public policy ought to be manifestly obvious and/or against the conscience or morality and entail a very high threshold. For breach of public policy - Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal (supra) FC at [143]; Jan De Nul supra at [55] and [58] Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLJ 608 CA at [31] – [33] PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR 597 (Singapore Court of Appeal) at [59]. On breach of natural justice - Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal (supra) at [139] & [140]; Master Mulia at para [53] & [62]; AKN and another v ALC and others and other appeals (supra) at [39]; Kyburn Investments Ltd v Beca Corporate Holdings Ltd [2015] 3
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24.6 Matters solely reserved to the Tribunal:
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24.6.1 finding and assessment of the facts and evidence - Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal (supra) at [132]; Garden Bay at [53]; Chain Cycle Sdn Bhd v Kerajaan Malaysia [2016] 1 MLJ 681CA at [61], Ketua Setiausaha Dalam Negeri & Anor v Salconmas Sdn Bhd [2020] MLJU 476 HC at [60];
24
24.6.2 interpretation of law - Huawei Technologies at [38], [41], [42] & [43] [Tab 22 of SSPC’s BOA (Vol II) Encl. 110 p. 158]; Ketua Setiausaha Dalam Negeri & Anor v Salconmas Sdn Bhd (supra) at [60], Cairn Energy India Pty Ltd & Anor v The Government of India [2009] 6 MLJ 795 CA at [2], [10], [11], [21] to [24], Kluang Health Care Sdn Bhd v Lee Yong Beng [2016] 1 CLJ 281;[2015] MLJU 773 HC at [36], [37] & [40];
24
24.7 In the context of a final arbitral award and the AA, the term in “excess of jurisdiction” is a reference to whether a dispute, matter or issue as determined by the Tribunal is within the terms or scope of a submission to arbitration, and therefore within the jurisdiction of the Tribunal. It is not a reference to whether the Tribunal made a wrong decision or an error of law in its interpretation, construction or application of a contract, a term thereof or the law in its determination and decision on the dispute or matter that was without question submitted to arbitration and within its jurisdiction to determine - Huawei Technologies (supra) at [38], [41} to [43], [45] and [46] ; The Government of India v Cairn Energy Pty Ltd & Ors [2014] 9 MLJ 149 HC at [130] to [137], PT Asuransi (supra) at [37] to [39] Otherwise, every challenge as to the correctness of an arbitration award would be said to be made without jurisdiction and amenable to appeal in circumvention of the AA - Huawei Technologies (supra) at [42] [25] Guided by these principles, I now deal with the issues. The issues [26] In my view, the issues for determination in OS 17 in effect are as follows:
i
whether the Arbitrator has acted in excess of his jurisdiction and whether he exceeded his scope of authority;
II
(ii) whether the Award is in conflict with the public policy of Malaysia encompassing breach of natural justice. Whether the Arbitrator has acted in excess of his jurisdiction and whether he exceeded his scope of authority [27] For ease of reference, s. 37 AA is set out: “37. Application for setting aside
1
An award may be set aside by the High Court only if:
a
the party making the application provides proof that:
i
a party to the arbitration agreement was under any incapacity;
II
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of Malaysia;
III
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present that party’s case;
IV
(iv) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;
IV
(iv) subject to subsection (3), the award contains decisions on matters beyond the scope of the submission to arbitration; or
v
the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Act; or
b
the High Court finds that:
i
the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or
II
(ii) the award is in conflict with the public policy of Malaysia.
2
Without limiting the generality of subparagraph (1)(b)(ii), an award is in conflict with the public policy of Malaysia where:
a
the making of the award was induced or affected by fraud or corruption; or
b
a breach of the rules of natural justice occurred:
i
during the arbitral proceedings; or
II
(ii) in connection with the making of the award.
3
Where the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside.
4
An application for setting aside may not be made after the expiry of ninety days from the date on which the party making the application had received the award or, if a request has been made under section 35, from the date on which that request had been disposed of by the arbitral tribunal.
5
Subsection (4) does not apply to an application for setting aside on the ground that the award was induced or affected by fraud or corruption.
6
On an application under subsection (1) the High Court may, where appropriate and so requested by a party, 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.
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.” [28] To begin with, in considering OS 17, this Court shall only consider if the Respondents have successfully shown that one of the grounds for setting aside an arbitral award in s. 37 has been met. The Respondents have not discharged its burden. Each of the grounds will be dealt with below. “It must be remembered that the grounds enumerated in section 37 are exhaustive and as such the court cannot set aside an award for reasons other than those that are listed.” See Pancaran Prima at [141]. See also Carr v Gallaway Cook Allan [2014] 1 NZLR 792 (SC NZ) at paragraph 76, ADG and another v ADI and another matter [2014] SGHC 73; [2014] 3 SLR 481 (HC SG) at paragraph 97 and KB v S & ORS - [2016] 2 HKC 325 (CFI HK) at paragraph 22. These jurisdictions have similarly held the position that Article 34 of the Model Law (upon which s. 37 AA 2005 is based) sets out an exhaustive list of grounds upon which an award may be set aside. [29] OS 17 is made pursuant to s. 37(1)(a)(iv) and/or s. 37(1)(a)(v) and/or s. 37(1)(b)(i) and/or s. 37(1)(b)(ii) AA (read together with section 37(2)(b)(ii) AA. [30] In contending that, the Award should be set aside because the Award did not deal with a dispute contemplated by nor falling within the terms of submission, the Respondents’ learned counsel Mr. Logan postulated that:
30
30.1 The Arbitrator having rejected the pleaded case of an alleged ‘concluded contract on 13.3.2020’ under the December 2019 Offer, the Arbitrator proceeded to redefine Gurtaj’s case and concluded instead on a ‘new case’ i.e. there was ‘a valid and binding contract on 20th December 2019’, the ‘new difference’ examined against the pleadings would be outside the scope of arbitration, citing PT Prima International Development v Kempinski Hotels SA and other appeals [2012] SGCA 35; [2012] 4 SLR 98, the Singapore Court of Appeal case of PT ASURANSI JASA INDONESIA (PERSERO) V DEXIA BANK SA[2006] SGCA 41; [2007] 1 SLR 597; Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126; [2015] 1 CLJ 617 ; Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 9 CLJ 213, [2020] 12 MLJ 198 ; the Respondents were unable to present its case as such, there was breach of natural justice which could also amount to a breach of jurisdiction as held in Petronas Penapisan (Melaka) Sdn Bhd v Ahmani Sdn Bhd - [2016] 2 MLJ 697; a decision based on “unpleaded case” will, as a rule, occasion a “failure of natural justice” - Pembinaan SPK Sdn Bhd v Jalinan Waja Sdn Bhd [2014] 2 MLJ 322 CA.
30
30.2 The court may set aside an award if “made outside the pleadings of the parties and if it was not an issue in play at the end of the arbitration ….” – Sime Darby Property Bhd v Garden Bay Sdn Bhd and another case [2018] 7 MLJ 420;
30
30.3 The Arbitrator did not address ‘Broad Issue 1’ (no concluded contract) and ‘Broad Issue 2’ (conduct of claimant – inconsistent and devoid of equity; no basis for suggesting ‘ready, willing and able’) neither did the Arbitrator address ‘Broad Issue 3’ and ‘Broad Issue 4’ which stemmed from the ‘Celcom Challenge’; the Court is to review the ‘objective record’ of the subject arbitration in order to decide whether the allegations made by Respondents seeking to impugn the Award on the basis of breach of natural justice have substance – BZW and another v. BZV [2022] SGCA 1 [31] It is clear from the ‘objective record’ that the issue whether there was a valid acceptance by Gurtaj of the Respondents’ 1st ROFR shares was very much an integral part of the submission to arbitration. As such, in my view, this issue cannot in any way be said to be a new difference or for that matter, irrelevant to the Arbitration. [32] The Arbitrator did not decide on a matter that he created or added to the arbitration. The Arbitrator did not create or add new issues. It is plain to me that the Arbitrator considered the merits of parties’ respective positions and dealt with the same in some detail in the Award. Specifically, the Arbitrator examined the documents, the facts and points of Claim with care and concluded the substance of the claim against the Respondents viz whether there was a valid and subsisting agreement between the Claimant (Gurtaj) and the Respondents for the sale of the Respondents 1st ROFR shares to the Claimant. The Arbitrator found by the Claimant’s acceptance, as contained in the letter dated 26th December 2019 returning the letter of 5.12.2019 duly accepted and the Form of Acceptance dated 20.12.2019, that a valid, effectual and binding contract for the sale of the relevant shares had come into being. This Arbitrator did not rule on matters outside the claim. [33] The complaint as such has no merits. [34] Of importance to note, the Notice of Arbitration at paragraph 26 stated “There is a valid and subsisting agreement between the Claimant (Gurtaj) and the Respondents for the sale of the Respondents 1st ROFR shares to the Claimant, and the Claimant is at all material times, including now, ready, willing and able to purchase the Respondents 1st ROFR shares.” [35] The Award amongst others stated: “24. The dispute between the Claimant and the 4 Respondents is essentially whether there was a valid and binding contract for the sale of 1,232,870 shares in Tune Talk Sdn Bhd (TTSB) from the Respondents to the Claimant, at a price of RM3.00 per share. In this arbitration proceedings, the Claimant has claimed for specific performance of a concluded contract. …………
36
By the letter of 20th December 2019 through Fahri & Co, the Claimant informed the company secretaries of his intention to accept the offer. The letter enclosed the ‘Form of Acceptance’ and the ‘Offer Notice” duly accepted. Still the Claimant repeated his request for the information set out above. In my consideration, this is a key document, and I will refer to this as the 20th December letter “. ……………
100
Further I am able to arrive at my conclusion on the effect and application of the December 2019 Offer by reference to the usual principles of contract law. ...
115
... My finding is that there was a valid acceptance by the 20th of December letter, and hence there was a valid effectual and binding contract on 20th December 2019 between the Claimant and the Offerors. …………..
123
I now turn to consider the third and fourth ground of the Respondents’ submission. I will deal with them together. In submission, it was impressed upon me that there was a community of the interest between the Claimant and Celcom with regard to this particular exercise. The Respondents at paragraph 57 of their opening submission say that “there is the underlying connected legal implication of the Celcom’s challenges…also recognised by the Claimant”. I will deal with this together with the fourth ground, namely the implications of the absence of Celcom in this arbitration.
124
My finding on these two grounds is that I do not see any relevance or nexus in Celcom’s stand in relation to the resolution of this dispute between the Claimant and the Respondents. In other words, whatever stand Celcom had taken with regard to the December 2019 Offer is of little or no value on my decision in deciding the dispute. In fact, Celcom’s stand cannot in any way affect the validity of the argument of the Claimant that there was a valid agreement.
125
Consequently, I do not see why the absence of Celcom in this arbitration should act as an impediment or affect these proceedings in any way. The Claimant’s position should really be judged based on his conduct vis-a-vis the Respondents and cannot really be influenced (one way or the other) by the stand taken by Celcom.
126
I find that by the Claimant’s acceptance, as contained in the letter dated 26th December 2019 returning the letter of 5.12.2019 duly accepted and the Form of Acceptance dated 20.12.2019, that a valid contract for the sale of the relevant shares had come into being.’ (emphasis added)
127
That it was never a term of the offer nor of the agreement that the Claimant was required to tender payment for the relevant shares either at the time of acceptance or within the Prescribed Period, and that payment would only need to be made on the date fixed within the meaning of clause 9.2 (b) of the SHA to wit; ‘The purchase shall be completed at a place and time to be appointed by the Board not being less than three (3) Business Days nor more than 45 days after the date of such notice.’
128
I find no circumstances whatsoever that can preclude the grant of an award of specific performance in favour of the Claimant.” [36] As for the Respondents’ posit of the Gurtaj’s ‘inconsistent and inequitable conduct’, the Arbitrator dealt with this at paragraphs 117 to 122 of the Award and concluded “I would have found more force in the Respondents’ argument regarding the inconsistent stand that the Claimant has taken if they could have demonstrated that this caused a change of position on their part and which acted to their detriment. This has not been demonstrated at all and hence leads me to rule that I do not see the Claimant’s conduct post 20th December 2019 as constituting inequitable conduct.” [37] Plainly the complaints that the Arbitrator did not address ‘Broad Issue 1’ (no concluded contract), ‘Broad Issue 2’ (conduct of claimant – inconsistent and devoid of equity; no basis for suggesting ‘ready, willing and able’) ‘Broad Issue 3’ and ‘Broad Issue 4’ which stemmed from the ‘Celcom Challenge’ are bereft of merits. These are raised as an attempt to reopen issues adjudicated in the arbitration. [38] In my respectful view, the Respondents’ complaints in this regard about the Arbitrator’s alleged failure to address the 4 Broad Issues and as such invited the court to analyse the ‘objective record’ of the subject matter of arbitration, is an ingenuous attempt to re-open issues adjudicated in arbitration and the merits arguments taken in the course of the arbitration, which the Respondents lost. They invite the court to revisit the matter. That has no correlation to a s. 37(1)(iv)(a) challenge under the AA. Section 37(1)(iv)(a) AA is not designed to permit a losing party to have a second bite of the cherry before this court. This was held in Huawei Technologies (supra). In that case, Maxbury sought to set aside an award on the basis that the arbitrator failed to consider its pleaded case and accept the existence of a collateral agreement. The Court of Appeal held that: “[42] It is a fallacy to label the failure to accept the existence of a collateral agreement, or even an incorrect application of the law by the arbitrator, as amounting to a transgression of the arbitrator, such that it can be said that the award handed down deals with a dispute not contemplated by or not falling within the terms of submission to arbitration. Errors, such as those sought to be put forward by the applicants, even if they had merit, have no nexus with s. 37(1)(a)(iv) which deals with the issue of jurisdiction and not errors of law. If at all they are errors of fact and/or law, they are errors committed within the scope of his jurisdiction or mandate. Indeed, to hold otherwise would result in every award being subject to review, and in effect, appeal by the courts. That is precisely what the AA 2005 seeks to preclude.” [39] Added to that, the AIAC rules provide any party to an arbitration or any third party may request one or more Additional Parties to be joined as a party to the arbitration. Whilst there was much bearing of the drums by the Respondents over the ‘the Celcom challenge’, yet it made no attempt to join Celcom or any other ‘indispensable party’ to the arbitration. Thus, having effectively squandered the opportunity to do so, cannot in my respectful view resurrect the matter before this court now. At any rate, as alluded earlier, the Arbitrator expressly dealt with this challenge at paragraphs 123 to 125 of the Award. [40] The test is "that the arbitrator must not decide on a "new difference" which is irrelevant to the claim - paragraph 35, Huawei Technologies (supra). [41] An example of a new difference is where the Arbitrator created or added a new issue on his own volition (without consensus and after the close of the case of the parties) which was irrelevant to the issues submitted and agreed between the parties - Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126 at [39] to [40]. [42] The Arbitrator did not decide on a matter that he created or added to the arbitration - Huawei Technologies (supra). Whether there was a valid effectual and binding contract was very much a live issue for the Arbitrator to determine and was squarely put before the Arbitrator, and rightly considered by the Arbitrator. It was a simple exercise in interpretation and construction of the documents between the contracting parties placed before him. His construction and interpretation were not read in the Respondents’ favour. Even if the Arbitrator’s interpretation was incorrect this Court has no jurisdiction to visit the correctness of that decision. [43] In any event, I find such objections do not engage this Court’s intervention under s. 37(1)(a)(v) AA, regardless of whether the contractual interpretation may have been incorrect. In this regard, I refer to Cairn Energy India Pty Ltd & Anor v The Government of India [2009] 6 MLJ 795 (CA): “[24] There was nothing improper for the majority arbitrators to have been persuaded by the construction of the appellants, and could not be said to have acted so erroneously that a court must set aside that finding. It was just a question of the arbitrators choosing one reasonable construction over the other. It cannot be overly emphasized that a difference of opinion in the construction of the facts and provisions, and in light of the majority arbitrators' plausible conclusion, is insufficient ground to conclude that a manifest error of law had been established, which allegedly had caused an error on the face of the award. … [45] There could be no doubt that as against the construction by the arbitral tribunal, the court below had a different construction. So evidently, therefore, the court below had treated the application before it as an appeal. [46] But even if the issue before the court below were a question of mixed fact and law, it was still not open to the court below to reopen the issue, and or to construct the PSC (see Pembinaan LCL Sdn Bhd v SK Styroform and Sharikat Pemborong Pertanian & Perumahan v Federal Land Development Authority). The court below had no appellate powers. If it were a question of mixed fact and law, it was only open to the court below to determine whether there was error of law on the face of the award. The court below identified an error of construction as the error of law. But an error of construction is not a sufficient ground to set aside the award (Sharikat Pemborong Pertanian & Perumahan v Federal Land Development Authority citingWorsdell v Holden 1 LT 14 ()).” (emphasis added) [44] Surely too, the Arbitrator is entitled to mould the decree of specific performance to fit the facts as found by him. The Arbitrator is the sole judge of fact and law, and a wrong finding of fact or law is not sufficient ground to set aside an award; the Court is not an appellate court. In Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113; [2007] 3 CLJ 185, Gopal Sri Ram JCA (as he then was) aptly said: “A court when examining the objections taken to an award made by an arbitrator is not required to examine the correctness of the claim on merits. The court cannot sit in appeal over the views of the arbitrator by re-examining and reassessing the materials.” [45] The Respondents declared in their submissions that “The present challenge under the 2005 Act does not seek to invite a determination of the merits of the dispute.” Yet, under the guise of a jurisdictional challenge, artfully seek to relitigate to set aside the Award after losing on the merits of the claim. [46] As the same grounds also gave rise to complaints on the arbitrator having exceeded the scope of his authority, it is not out of place to state that the AA makes a distinction between a plea that the arbitral tribunal does not have jurisdiction with a plea that the arbitral tribunal is exceeding the scope of its authority. The ambit of s. 37(1)(a)(iv) and (v) AA was explained in the judgment of the Federal Court delivered by Jeffrey Tan FCJ in Thai-Lao Lignite Co Ltd & Anor v. Government of the Lao People's Democratic Republic [2017] 9 CLJ 273; [2017] MLJU 1196: "[197] In relation to 'the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration' and 'the award contains decisions on matters beyond the scope of the submission to arbitration', William & Kawharu supra at 17.5.4 thus commented on the first limb of art. 34(2)(a)(iii) of the NZ Arbitration Act (the equivalent of section 37(1)(a)(iv) and (v) of AA 2005): ‘This ground for setting aside is directed at situations in which a tribunal has jurisdiction under a valid arbitration agreement, but has exceeded the authority by dealing in the award with matters that go beyond the terms of the arbitration agreement or the scope of the issues referred by the parties for resolution ... The tribunal also has an obligation to take particular care to keep within the confines of these matters that the parties have plainly put in issue ... If the tribunal exceeds its authority in respect of some matters only, and its decisions on those matters are severable from decisions on matters made within the submission to arbitration, the High Court may only set those parts of the award containing the decisions on matters not submitted to arbitration.” [47] This distinction is illustrated in s. 18 AA. For a challenge on jurisdiction, s. 18(3) AA requires a plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. For a challenge that the arbitral tribunal is exceeding the scope of its authority, s. 18(5) AA requires a plea that the arbitral tribunal is exceeding the scope of its authority to be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. As the Respondents here, just as in the case of Segi Astana invoked neither provision in s. 18(3), (5), I said ‘Cadit quaestio’! [48] The Respondents’ complaint that the Arbitrator did not have jurisdiction to decree specific performance viz the absence of ‘indispensable party’ is plainly untenable for the reason stated at paragraph 39 of this judgment and viz the distinction between a plea that the arbitral tribunal does not have jurisdiction with a plea that the arbitral tribunal is exceeding the scope of its authority - Thai-Lao(supra); the challenge is in effect a challenge on the merits against the Arbitrator; such a challenge is not contemplated in s. 37 AA; it is trite that the Court does not usurp the position of the Arbitrator in determining the merits of the dispute. It ought to be patently clear on such a scrutiny that the dispute fell outside the scope of the submission warranting the intervention of the court - Huawei Technologies (supra), the correct test being: “What Is the Approach to Be Adopted by The Courts When Determining the Scope of An Arbitrator's Authority? … [45] In the text entitled 'Transgression of the Arbitrators' Authority: Article V(1)(c) of the New York Convention, the learned authors Mercedeh Azeredo da Silveira and Laurent Levy commented as follows at pp. 668 - 669:
4
4.1.2. Examination of the Substance of the Award for the Sole Purpose of Determining Whether the Arbitrators Have Transgressed the Limits of Their Authority …. Thus, the issue examined by the courts is not whether the decision reached by the arbitral tribunal is well-founded or even how the arbitral tribunal has reached its decisions, but merely whether this decision transgresses the scope of the arbitrators' jurisdiction or mandate. In other words, the court must limit its investigations to what is strictly necessary for the interpretation of the scope of the arbitration agreement and the arbitrators' mandate. [46] Although the above passage relates to enforcement of the arbitral award rather than setting aside, the principle stated is still relevant to the present case because the passage relates to the rule to be applied when determining the scope or ambit of the arbitrators' authority. The learned authors make it clear that the court should look not at the merits of the award, but instead consider whether the arbitrator had exceeded the scope of the mandate referred to them. This issue of exceeding the scope of the mandate goes to the issue of jurisdiction.” [49] In Huawei Technologies, the arbitrator ruled in favour of Huawei. Maxbury applied to set aside the award on the basis that the arbitrator failed to determine an issue put before him that there was a breach of clause 4 of the settlement agreement. Nallini JCA (now FCJ) rightly found at [36] that the question raised by the applicant was one that relates directly to the merits of the claim and “is completely at odds with, or is directly contrary to any complaint that the arbitrator has in fact gone outside the purview of the scope of arbitration.” [50] I have scrutinized the reference to arbitration and the relevant documents including the pleadings to ascertain whether the arbitrator has gone well outside the scope of the submission to arbitration. Here, the mandate of the Arbitrator was jointly given by the parties to adjudicate whether there was a valid and binding contract for the sale of 1,232,870 shares in Tune Talk Sdn Bhd from the Respondents to Gurtaj, at a price of RM3.00 per share. It is not patently clear on such a scrutiny that the Arbitrator made an Award that ran contrary to the very basis of his appointment and warranting the intervention of the court. The Arbitrator, on the documents before him, took stock of the state of play and, where circumstances were such, determined on the facts and contract law, there was a binding contract in the context of offer and acceptance, on 20th December 2019, as opposed to the pleaded case of a ‘concluded contract on 13.3.2020’ and it can be specifically performed. The Respondents’ arguments were not accepted by the Arbitrator. It is clear that the Respondents are effectively challenging the Arbitrator's purported errors of law, on the case having allegedly been redefined. [51] In my utmost respectful view, the Arbitrator did not err whether in law or fact. Even if he did err, it is not a ground for setting aside or to refuse recognition. [52] As alluded earlier, the threshold to set aside an arbitral award is high. s. 8 AA provides that “No court shall intervene in matters governed by this Act, except where so provided in this Act.” In Jan De Nul at [57] discussed earlier, the Federal Court issued a pithy reminder that ‘the court should be slow in interfering with or setting aside an arbitral award’ and ‘the court needs to recognise the autonomy of the arbitral process by encouraging finality; and its advantage as an efficient alternative dispute resolution process should not be undermined.’ [53] In Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd and another appeal [2017] MLJU 1530, the Court of Appeal stated: “[19] …
a
s 36 will fortify the argument that the award is final and binding on the parties. Section 36 provision is not found in the model law. Section 36 places a higher threshold on the court when it intends to set aside an award related to a s 37 application. In this respect, the decision from other jurisdiction which does not have a similar provision will not be helpful, save those cases which had dealt with the jurisprudence relating to ‘patent injustice’ or unconscionability, etc. Section 36 of the Act reads as follows: 36 An award is final and binding
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.
2
The arbitral tribunal shall not vary, amend, correct, review, add to or revoke an award which has been made except as specifically provided for in section 35.” [54] Therefore, I agree with Gurtaj’s argument that the sum total of the Respondents’ challenge under s. 37(1)(a)(iv) and (v) of the AA 2005 is in effect a challenge on the merits of the claim which is not open to this court to delve into. Errors of law or lack of appreciation of facts or the pleaded case in the circumstances as obtained here are not considerations for setting aside the Award or grounds to refuse recognition of an award. [55] In addition, s. 8 AA 2005 obviously circumscribed intervention by the court in matters related to arbitration by its very wordings: “No court shall intervene in matters governed by this Act, except where so provided in this Act.” [56] Minimal curial intervention was also emphasized by the Federal Court in The Government of India v Cairn Energy India Pty Ltd & Anor [2011] 6 MLJ 441 where Richard Malanjum CJ (Sabah and Sarawak) as his Lordship then was, delivering judgment of the Court tersely said: “[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).” (emphasis added) [57] In my judgment, the Respondents are not entitled to relitigate the matter. Whether the Award is in conflict with the public policy of Malaysia by reason of breach of natural justice [58] It is the Respondents’ circuitous submissions that by departing from the pleaded case of a ‘concluded contract on 13.3.2020’ under the December 2019 Offer, the Arbitrator proceeded to redefine Gurtaj’s case and concluded instead on a ‘new case’ i.e. there was ‘a valid and binding contract on 20th December 2019 between the Claimant and Offerors’, had acted in breach of natural justice. Counsel elaborated that the principle that parties are bound by their pleadings, and in an arbitration, the tribunal’s jurisdiction or the scope of reference is defined by pleadings, and cited various cases in support. The Respondents were caught by surprise and irreversibly prejudiced. It was posited that the breach of natural justice in the making of the Award had a determinative effect on the outcome of the Arbitration, which warrants the intervention by this Court to set the Award aside. [59] In objecting to this head of challenge, Gurtaj argued that two issues advanced by the Respondents on the allegedly unpleaded case and the Celcom challenge do not concern matters pertaining to breach of public policy. [60] The scope for setting aside an arbitral award based on a breach of public policy was set out in paragraph 58 of the Federal Court decision in Jan De Nul (supra) and Master Mulia as set out in paragraphs 19 and 21 of this judgment. The Federal Court in Jan De Nul at [53] also said: “[53] The decision of the Singapore Court of Appeal in PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2007] 1 SLR 597, provides a good guidance on the interpretation of the term 'public policy' in an application to set aside an arbitral award made by a tribunal, on the ground of a breach of the rule of natural justice for being in conflict with the public policy. In that case Chan Sek Keong CJ (delivering thejudgment of the court) ruled: Although the concept of public policy of the State is not defined in the Act or the Model Law, the general consensus of judicial and expert opinion is that public policy under the Act encompasses a narrow scope. In our view, it should only operate in instances where the upholding of an arbitral award would 'shock the conscience' (see Downer Connect (58) at (136), or is 'clearly injurious to the public good or... wholly offensive to the ordinary reasonable and fully informed member of the public' (see Deutsche Schachbau v. Shell International Petroleum Co Ltd [1987] 2 Lloyds Rep 246 at 254, per Sir John Donaldson MR), or where it violates the forum's most basic notion of morality and justice: see Parsons & Whittemore Overseas Co Inc v. Societe Generalede L'lndustrie du Papier (RAKTA) 508 F 2d 969 (second Cir, 1974) at 974. … 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'.” (emphasis added) [61] The restrictive approach to be taken is exemplified by at least 2 High Court decisions:
61
61.1 in Allianz General Insurance Company Malaysia Berhad v Virginia Surety Company Labuan Branch [2020] 5 CLJ 345: “[39] This court adopts the defendant's summary of the three principles laid down in Sigur Ros which can be distilled to be the following:
i
the conflict with public policy ground that is envisaged in s. 37(1)(b)(ii) ought to be narrowly and more restrictively read. The court's curial intervention should be sparingly used, and this would be in keeping with the terms in s. 8 of the Act;
II
(ii) the threshold to be met is somewhat high in that by its very nature, "it should be immediately obvious or at least fairly rapidly apparent that there has been such a breach." The court should be compelled to agree that the award conflicts with public policy; and
III
(iii) an arbitral award will not be set aside merely because it is irrational or unreasonable. The concept of public policy must be one taken in the "higher sense, where some fundamental principle of law and justice is engaged, some element of illegality, where enforcement of the award involved clear injury to public good or the integrity of the court's process and powers will thereby be abused."(emphasis added)
61
61.2 In Kluang Health Care (supra) where it was held that: “[35] In the same decision of Government of India v Cairn Energy India Pty Limited & Ors, I had also considered the allegation of breach of public policy; what it means and what an Applicant has to show in order to successfully rely on this ground to set aside an award. From paragraph 140 of the judgment, I had opined: [140] The Plaintiff has also relied on subparagraph 37(1)(b)(ii) as a ground to setting aside the Award, and that is, the Award is said to be in conflict with the public policy of Malaysia. [141] Model Law recognizes that each State has its own concept of what is required of “public policy”. Nevertheless, it may be said that since subparagraph 37(1)(b)(ii) is subject to the same overlying conditions as subparagraphs 37(1)(a)(iv) and (v), and that is it is discretionary, having regard to the context of the dispute, that it arises out of commercial and contractual transactions where parties have received more than adequate advice, including legal counsel; and that bargains are arms’ length, the public policy that is envisaged in this provision must be read narrowly and more restrictively. [142] Although there appears to be no requirement of “proof” in this subparagraph, and whilst the question of what amounts to “public policy” may be a difficult one, I would also venture to say that the Court nevertheless requires sufficient basis for such allegation or ground in order that it may “find” that “the award is in conflict with the public policy of Malaysia”. This requirement extends to not only identifying the particular public policy of Malaysia which is said to be conflicted but also to providing basis of the alleged conflict; that is how it is conflicted or breached; and how the breach has prejudiced the rights of the plaintiff. [143] This makes the threshold high in that by its very nature, it should be immediately obvious or at least fairly rapidly apparent that there has been such a breach or conflict with the public policy of Malaysia Court. From the reasons offered, the Court must be compelled to agree or that a strong case has been made out that the award conflicts with the public policy of Malaysia. Otherwise, the contractual arrangements of the parties must be maintained. These views were expressed in Hebei Import & Export Corp v Polytek Engineering Co Ltd (1999) 2 HKCFAR 111 and Downer-Hill Joint Venture v Government of Fiji [2005] 1 NZLR 554 @ p 565, 570, and I agree that it should be the case here. … [152] It is clear that while subsection 37(2) serves to provide some examples of what may be considered as conflicting with the public policy of Malaysia; and it would be those awards which were induced or affected by fraud or corruption; or where there is a breach of natural justice, as is the case with proper statutory interpretation, any other complaint of conflict with public policy must fall within this genre as set out in paragraphs 37(2)(a) and(b). Quite undisputedly, these two areas may be said to fall within the basic and fundamental notions or principles of justice.” (emphasis added) [62] The judicial principles enunciated above make plain that s. 37(1)(b)(ii) AA only applies in very limited circumstances. [63] Considered properly, in reality, the Respondents’ complaints are in essence objections to the contractual interpretation of the documents placed before the Arbitrator which fail to meet the high threshold. Contractual interpretation of the documents to find a binding contract on 20 December 2019 even if incorrect (I make no such conclusion), does not engage the Court’s intervention under s. 37(1)(b)(ii) AA. This point has been exhaustively determined in the following authorities:
i
Master Mulia (supra) FC at paragraph 54;
II
(ii) Allianz General Insurance Company (supra) (HC) at paragraphs 32 and 58;
III
(iii) Tanjung Langsat Port Sdn Bhd v. Trafigura Pte Ltd & Another Case [2016] 4 CLJ 927 (HC) at paragraphs 43-47;
IV
(iv) Section 36(1) AA. [64] A breach of natural justice, even if found (which I do not), does not automatically cause an award to be set aside. The Court will have to evaluate whether it should exercise its discretion based on 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 costs of rehearing and delay in raising the complaint. The Court of Appeal in Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLJ 608; [2018] 8 CLJ 291 went on to state that the Court’s discretion to set aside an award under s. 37(1) must be exercised with regard to the policies and objectives underpinning the AA 2005 and even if there is a breach of natural justice, setting aside is not automatic: “[59] Although the Court’s discretion to set aside an award under s 37(1) is unfettered, it must nevertheless be exercised with regard to the policies and objectives underpinning the AA 2005. In particular, due cognizance must be taken of the purposes of encouraging arbitration as a method of dispute resolution and facilitating the recognition and enforcement of arbitral awards. …… [63] Because s. 37 vests the court with a wide discretion on whether to set aside an award, we agree with the learned JC that the decision to set aside an award is not an automatic outcome of a finding that there has been a breach of the rules of natural justice. The court will still have to evaluate whether discretion should be exercised in the applicant's favour. In considering whether discretion should be exercised, there should be an evaluation of relevant factors such as those identified in Kyburn Investments Ltd v. Beca Corporate Holdings Ltd, amongst which would be to consider 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; leaving room for "casual breach or occasional error". Costs of rehearing and delay in raising the complaint are further relevant factors to be taken into account in that evaluation.” (emphasis added) [65] Evaluating the facts and considering the matter as a whole, I am respectfully of the view that applying the criteria’s in Jan De Nul (supra), I cannot find any clear breach of public policy or natural justice during the arbitral proceedings or in connection with the making of the Award such that the Award offends "the most basic notions of morality and justice"; or "shock the conscience" is "injurious to the public good"; or is "wholly offensive to the ordinary reasonable and fully informed member of the public"; or that there was "patent injustice" in the Arbitral Proceedings and Award; or that the Award is "manifestly unlawful and unconscionable"; or that there was "substantial injustice", "serious irregularity" and other "similar serious flaws”. [66] In Soh Beng Tee & Co. Pte Ltd v. Fairmount Development Pte Ltd [2007] 3 SLR 86, the Singapore Court of Appeal in dealing with the argument of a breach of natural justice raised in an attempt to set aside an Arbitral Award explained at page 119 as follows: "It is almost invariably the case that parties propose diametrically opposite solutions to resolve a dispute. They may expect the arbitrator to select one of these alternative positions. The arbitrators, however, is not bound to adopt an either/or approach. He is perfectly entitled to embrace a middle path (even without appraising the parties of his provisional thinking or analysis) so long as it is based on evidence that is before him. Similarly, an arbitrator is entitled - indeed, it is his obligation, to come to his own conclusions or inferences from the primary facts placed before him. In this context, he is not expected to inexorably accept the conclusions being urged upon him by parties, neither is he expected to consult the parties on his thinking process before finalizing the award unless it involves a dramatic departure from what has been presented to him. Each case should be decided within its own factual matrix. It must always be borne in mind that it is not the function of the court to assiduously comb an arbitral award microscopically in attempting to determine if there was any blame or fault in the arbitral process; rather an award should be read generously such that only meaningful breaches of the rules of natural justice that have actually caused prejudice are ultimately remedied." (emphasis added] [67] I am of the view that in the present case, this ground of challenge would not succeed. There is nothing illegal in the Award that contravened public policy. This is certainly not a situation where fundamental principles of Malaysian law and justice have been contravened. [68] I am of the view that the Respondents are actually disputing the merits of the Award. I am therefore not satisfied that the Respondents have been denied natural justice by the Arbitrator. In my opinion, the Respondents’ contentions are in substance, an appeal but cloaked as a denial of natural justice. [69] In my utmost respectful view, attacking the merits of the Award is only permissible under s. 42 AA which was repealed in 2018 (following the Federal Court judgment in Far East Holdings Bhd & Anor v Majlis Ugama
1
Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ The amendment brought Malaysia in tandem with other jurisdictions which do not permit referrals to court on a question of law arising from an award) and not under s. 37 AA. [70] The difference between s. 37 and s. 42 AA was explained by the Federal Court in Jan De Nul (supra) as follows: “[64] …Both these sections relate to different purposes and different tests for consideration. They are not the same. The consideration by the court in dealing with the applications under the sections varies. The cited test applicable in establishing an application under the s 42 may not be the same with and not applicable to an application under s 37 of the Act. [65] In drawing a clear distinction between ss 37 and 42 of the AA 2005, the Court of Appeal in Petronas Penapisan, made the following observation (with which we agree): An application to set aside an award under s 37 largely deals with issues relating to the award making process and has nothing to do with error of facts and/or law on the face of record unless the exception applies; such as public policy. An application under s 42 has nothing to do with the award making process but has everything to do with the award per se and error of law on the face of record which error substantially affects the rights of one or more of the parties. The distinction between ss 37 and 42 is that like of an apple and an orange.” [71] Further, on the complaint of the alleged failure of the Arbitrator to address the Respondents’ 4 Broad Issues or its arguments in detail (which are found to have no basis), I would mention that at any rate that I am not aware of any law that requires the Arbitrator or this court for that matter in making a decision to refer to every argument and authority cited by counsel in submissions. As is apparent, it is my utmost respectful view that the complaints have nothing to do with the process of the Arbitration, or with the jurisdiction of the Arbitrator. Rather, the complaints are entirely to do with the Respondents’ dissatisfaction with the conclusions in the Award. As Mary Lim J (as her Ladyship then was) stated in Kluang Health Care Sdn Bhd (supra): “[36] There is absolutely no allegation or evidence of any fraud, corruption or breach of natural justice which may be said to fall within the conflict with public policy of Malaysia ground. All that the court hears is the applicant’s dissatisfaction with the manner in which the arbitrator construed and interpreted the sub-contractual terms and obligations; that such construction and interpretation was apparently contrary to the clear terms of the subcontracts and read not in the applicant’s favour. [37] Such an argument is hardly enough to count as meeting the high thresholds set in s. 37. It is precisely the function of the arbitrator to construe the terms and conditions of the relevant contract, … the evidence shows that the applicant was in fact given the fullest opportunity to present its case. Just that the arbitrator was not convinced; and the arbitrator has set out his reasons for his findings and conclusions.” [72] In short, the Respondents allegations vide OS 17 are nothing but an attempt at an appeal against the Award (as opposed to a legitimate challenge to the Award on the specific and limited grounds provided for under the AA), by inviting this Honourable Court to reopen and rehear the merits of the issues that were considered and determined by the Arbitral Tribunal acting within its jurisdiction. Such an attempt at an appeal is clearly impermissible, as a matter of law. [73] The Award was the decision of an extremely experienced Arbitrator. I would express confidence that he must in the context of offer and acceptance, surely know the difference between a valid, effectual and binding contract that came into being on 20th December 2019, as opposed to the pleaded case of a ‘concluded contract on 13.3.2020’. Even a brief perusal of the Award reveals the substantial effort that went into its preparation, and makes clear the devoted attention of the Arbitrator to fairly and properly consider and resolve the parties’ dispute. A reading of the Award makes clear to me that the Arbitrator has properly observed the usual processes of arbitrations of this nature, carefully considered the arguments and evidence in coming to his findings in rendering the Award. The findings were legally sound and factually supported. The Respondents are simply dissatisfied with the outcome. The proceedings in OS 17 is used to delay enforcement. [74] In the final analysis, reading the award generously in consonance with Soh Beng Tee (supra), I am of the utmost respectful view that the matters dealt with in the Award are matters well within the domain of the Arbitrator and that they are not grounds to be raised in an application to set aside the Award. Even if, assuming the Respondents’ complaints are made out on breach of public policy or natural justice during the arbitral proceedings or in connection with the making of the Award, this court nevertheless, has a discretion not to set aside an award under s. 37(1) AA. This is clear from the use of the permissive word "may" in s. 37(1) AA. [75] Taking the parties’ submissions both written and oral into consideration, and for the reasons given, I conclude that this is not an appropriate case to set aside the Award. I exercise my discretion to dismiss OS 17 with costs subject to allocator. Recognition and Enforcement application (OS 21) [76] Gurtaj is seeking to register and enforce the Award against the Respondents. [77] Gurtaj has complied with the provisions of s. 38 AA which stipulates: “38. Recognition and enforcement
1
On an application in writing to the High Court, an award made in respect of an arbitration where the seat of arbitration is in Malaysia or an award from a foreign State shall, subject to this section and section 39 be recognised as binding and be enforced by entry as a judgment in terms of the award or by action.
2
In an application under subsection (1) the applicant shall produce:
a
the duly authenticated original award or a duly certified copy of the award; and
b
the original arbitration agreement or a duly certified copy of the agreement.
3
Where the award or arbitration agreement is in a language other than the national language or the English language, the applicant shall supply a duly certified translation of the award or agreement in the English language.
4
For the purposes of this Act, “foreign State” means a State which is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration in 1958.” [78] The wording of s. 38(1) AA is cast in mandatory language by the use of the word “shall”. The Court of Appeal in Tune Talk Sdn Bhd v Padda Gurtaj Singh [2020] 3 MLJ 184 held: ‘[81] As can be seen the only requirements under s 38(2) of the AA for the purposes of recognising and enforcing an arbitration award by entry as a judgment of the High Court are as follows: In an application under subsection (1) the applicant shall produce:
a
the duly authenticated original award or a duly certified copy of the award; and
b
the original arbitration agreement or a duly certified copy of the agreement. [82] The grounds upon which an arbitration award may be refused recognition and enforcement are set out in s 39(1). These grounds (nine altogether) as stated earlier are exhaustive. [83] The word ‘shall’ in s 38(1) of the AA is, as the word denotes, a mandatory requirement (see Low Cheng Soon v TA Securities Sdn Bhd [2003] 1 MLJ 389 and Yap Teck Ngian v Yap Hong Lang @ Yap Fong Mei & Ors [2006] 6 MLJ 607). [84] As the word ‘shall’ in s 38 of the AA denotes a mandatory requirement it therefore means that there is no room for the exercise of any discretionary power by the High Court if both substantive requirements in that section are fulfilled (which is the case here) and there are no grounds for refusal of recognition and enforcement under s 39 of the AA”. [79] In Bauer (M) Sdn Bhd v Embassy Court Sdn Bhd [2010] LNS 1260, the High Court held: " ……….. The grounds for refusal of recognition are exhaustive and if none of these grounds are present the award must be recognized: Rossel NV v. Oriental Commercial & Shipping Co (UK) [1991] 2 Lloyd's Rep 625. However once one of the grounds is established, the court is still left with a discretion whether or not to enforce. In some cases, there is little latitude for discretion, e.g., where there is a lack of capacity, but in other cases, e.g., where there is a minor departure from the agreed procedure, the court may exercise its discretion to allow enforcement See on this subject Russel on Arbitration (1997), p. 404." A Court called upon to recognize and register an Award of an arbitral tribunal under the 2005 Act, is therefore not in my view, required to enter into a minute examination or analysis of the Award save where there is sufficient 'proof placed before the Court, to satisfy any of the grounds enumerated in that sub-subsection (i.e., section 39(1) (a)) or on the grounds of subsection (b) of that section.” [80] In this case, Gurtaj’s compliance with s. 38 AA 2005 and Order 69, rule 8 (3) of the Rules of Court 2012, cannot be disputed by the Respondents. [81] As such, OS 21 is allowed with costs subject to allocator. [82] I must not conclude without recording my appreciation to the parties’ counsel for their comprehensive and able submissions on several of the points covered in this judgment. My not addressing here each and every single argument and case authority submitted by the parties is not meant as a discourtesy as I find it strictly unnecessary to do so in arriving at a decision, and to avoid a lengthy judgment. I state this formally for the avoidance of doubt. Date: 18th September 2022 - sgd - ….……………………….. Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur COUNSEL: OS 17 For the Plaintiffs : Logan Sabapathy (with him, Vivian Oh) (Messrs Logan Sabapathy & Co.) For the Defendant : Tang Qi Wen (Messrs Fahri, Azzat & Co.) OS 21 For the Plaintiff : Tang Qi Wen (Messrs Fahri, Azzat & Co.) For the Defendants : Logan Sabapathy (with him, Vivian Oh) (Messrs Logan Sabapathy & Co.) CASES REFERRED: Kejuruteraan Bintai Kindenko Sdn Bhd v Serdang Baru Properties Sdn Bhd and another originating summons [2017] MLJU 1332 Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd [2016] 5 MLJ 417 Noble China Inc et al v Lei Lei v Noble China Inc et al [Indexed as: Noble China Inc v Lei] v Lei, 42 OR (3d) 69, [1998] OJ No 4677 Methanex Motunui Ltd v Spellman [2004] 1 NZLR 95; Methanex Motunui Ltd v Spellman [2004] 3 NZLR 454 Popack v Lipszyc, [2015] OJ No 2790, 2015 ONSC 3460; lululemon athletica canada inc v Industrial Color Productions Inc, [2021] BCJ No 13, 2021 BCSC 15 Baz v Bba and others and other matters [2018] SGHC 275; [2020] 5 SLR 266 Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd and another appeal [2021] 1 MLJ 1 Jan De Nul (M) Sdn Bhd v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 Segi Astana Sdn Bhd v. Malaysia Airport Holdings Bhd [2022] 7 MLJ 91, [2021] 1 LNS 1650 Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 9 CLJ 213, [2020] 12 MLJ 198 AKN v ALC [2015] 3 SLR 488; [2015] SGCA 18 Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 Infineon Technologies (M) Sdn Bhd v Orisoft Technology Sdn Bhd (previously known as Orisoft Technology Bhd) and another application [2011] 7 MLJ 539 Brunsfield Project Management Sdn Bhd v Ingeniur Bersekutu Consulting Engineers [2015] 1 LNS 1546 MRCB Engineering Sdn Bhd v Lee Hon Min & Others [2018] 1 LNS 835 The Government of India v Vedanta Ltd (legal successor to Cairn India Ltd) & Anor [2018] MLJU 630 Ketua Setiausaha Dalam Negeri & Anor v Salconmas Sdn Bhd [2020] MLJU 476 Kyburn Investments Ltd v Beca Corporate Holdings Ltd [2015] 3 NZLR 644 Chain Cycle Sdn Bhd v Kerajaan Malaysia [2016] 1 MLJ 681 Carr v Gallaway Cook Allan [2014] 1 NZLR 792 ADG and another v ADI and another matter [2014] SGHC 73; [2014] 3 SLR 481 KB v S & ORS - [2016] 2 HKC 325 PT Prima International Development v Kempinski Hotels SA and other appeals [2012] SGCA 35; [2012] 4 SLR 98 PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2006] SGCA 41; [2007] 1 SLR 597 Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126; [2015] 1 CLJ 617 Petronas Penapisan (Melaka) Sdn Bhd v Ahmani Sdn Bhd - [2016] 2 MLJ 697 Pembinaan SPK Sdn Bhd v Jalinan Waja Sdn Bhd [2014] 2 MLJ 322 Sime Darby Property Bhd v Garden Bay Sdn Bhd and another case [2018] 7 MLJ 420 BZW and another v. BZV [2022] SGCA 1 Huawei Technologies (Malaysia) Sdn Bhd v Maxbury Communications Sdn Bhd & Another Appeal [2019] 6 CLJ 588; [2019] MLJU 1755 Cairn Energy India Pty Ltd & Anor v The Government of India [2009] 6 MLJ 795 Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113; [2007] 3 CLJ 185 Thai-Lao Lignite Co Ltd & Anor v. Government of the Lao People's Democratic Republic [2017] 9 CLJ 273; [2017] MLJU 1196 Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd and another appeal [2017] MLJU 1530 The Government of India v Cairn Energy India Pty Ltd & Anor [2011] 6 MLJ 441 Allianz General Insurance Company Malaysia Berhad v Virginia Surety Company Labuan Branch [2020] 5 CLJ 345 Kluang Health Care Sdn Bhd v Lee Yong Beng [2016] 1 CLJ 28; [2015] MLJU 773 Tanjung Langsat Port Sdn Bhd v. Trafigura Pte Ltd & Another Case [2016] 4 CLJ 927 Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLJ 608; [2018] 8 CLJ 291 Soh Beng Tee & Co. Pte Ltd v. Fairmount Development Pte Ltd [2007] 3 SLR 86 Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 Tune Talk Sdn Bhd v Padda Gurtaj Singh [2020] 3 MLJ 184 Bauer (M) Sdn Bhd v Embassy Court Sdn Bhd [2010] LNS 1260 STATUTES/LEGISLATION REFERRED: Section 8, 18, 36, 37 and 38 of the Arbitration Act 2005 Order 69 of the Rules of Court, 2012
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