Pintaras Geotechnics Sdn Bhd v Maison Rouge Sdn Bhd (WA-24C(ARB)-24-06/2023)

Originating Summons No. WA-24C(ARB)-30-07/2023 (OS 30) is Maison Rouge Sdn Bhd (“MR”) application in enclosure 1 (Enclosure 1 OS 30) to inter alia set aside the Award (Corrected on 16.5.2023) dated 11.5.2023 (Award) in accordance with section 37 (1) (a) (iv, (v), 37(1)(b) (ii) and/or 37 (2) (b) of the Arbitration Act 2005.

On the other hand, Originating Summons No. WA-24C(ARB)-24- 06/2023 (OS 24) is Pintaras Geotechnics Sdn Bhd’s (“PG”) application to enforce the Award as a judgment of the Court pursuant to section 38 of the Arbitration Act 2005.

MR had argued in support of OS 30 that:

3.1 the Arbitrator dismissed MR’s claims for damages for defective piles notwithstanding a finding that there were defective piles;

3.2 the Arbitrator did not grant damages arising from delays due to those defective piles;

3.3 the Arbitrator considered and awarded Extension of Time (“EOT”) for EOT Application No. 8 which was not pleaded. [4] For the record, I have not taken into account the Written Submissions at enclosure 69 of OS 30 and enclosure 58 in OS 24 which were both filed by PG’s lawyers on 10.6.2024 as the same was done without S/N ggQxFB9/gUu5jtvTObD6w leave of the Court when the oral submissions on both the OS herein were heard on 4.12.2023 and 28.5.2024 respectively. Background [5]

7.1 that the termination of the contract by PG is in accordance with the terms and conditions of the contract;

7.2 that PG is entitled to payment for works carried out until the date of termination; and 7.3 that PG is entitled to an extension of time or alternatively the time for completion be set at large. S/N ggQxFB9/gUu5jtvTObD6w [8] On 20.2.2020, MR issued its response to the Notice to Arbitrate. MR denied and disputed PG’s claims and contended amongst others that PG delayed the Works and that PG’s works were unsatisfactory and/or poor and/or defective. MR further contended that it suffered loss and damage for costs to complete the outstanding works, repair and/or replacement works and management costs and financial charges. [9] The parties reached an agreement for Mr Daniel Tan Chun Hao to be appointed as sole arbitrator (“Arbitrator”) for the arbitration (“Arbitration”). [10] On 16.5.2023, the Arbitrator informed the parties that the request made by PG is justified and accordingly, published the Final Award (corrected on 16.05.2023) dated 11.05.2023 (“Award”). Analysis & Findings MR’s Claims For Damages For Defective Piles As There Was A Finding That There Were Defective Piles [11] I will firstly deal with the issue of MR’s contention that there were claims for damages for defective piles notwithstanding a finding that there were defective piles. [12] On this issue, I have observed that the Arbitrator did in his Award, as found in enclosure 2 exhibit MR 1 in OS 30, at paragraph 219 thereto after due consideration of the parties submissions and the evidence S/N ggQxFB9/gUu5jtvTObD6w before him including the proper tests to be carried out on the piles i.e core tests vs PDA /PIT and the differing opinions expressed by parties expert, made a finding “..on a balance of probabilities that there were defects in the Claimant’s bore piling works despite the absence of any direct evidence on actual long term deterioration of pile capacity or integrity”. [13] It was thus submitted by counsel for MR that the Arbitrator had made findings regarding concerns raised by MR’s experts on the long term durability of the bored piles justified and that the long term durability of the piles would be compromised. [14] I must also add that in the Award, the Arbitrator had also held that: “…if defects subsist unrepaired together with reasonable estimated costs of rectification, this can also sustain a claim for defect rectification…”. This would in my view necessitate that MR prove the required rectification works carried out and the rectification costs. [15] Following from this I have observed that the Arbitrator had awarded rectification costs of RM640,000.00 for the micro piling works which MR had proven through its factual witness and RM1,690,075.87 for Piling Defect Investigation Costs. The Arbitrator had also stated in the Award that “...the factual basis in respect of the following claims have not been established for me to attach any weight....and thus these claims should not be allowed”. The Arbitrator in justifying his findings referred to various issues or claims which he says were unsupported by direct evidence at paragraph 229(c) of the Award. S/N ggQxFB9/gUu5jtvTObD6w [16] MR then argues that the piling works undertaken were in fact done by one Dyna Elite Construction Sdn Bhd (“Dyna”) who were MR’s replacement contractors who were appointed after PG’s self determination to continue the remaining works, and that these works were undertaken before the investigation of the piling defects and should be distinguished from the rectification costs claimed by City Piling LOA appointed post piling investigation. Hence, MR submits that it is logical that costs and time would have to be expanded as a result of such defective works. [17] Thus, MR contends that:

17.1 the City Piling LOA, which was marked as an “ID document” in the Arbitration was wrongly rejected by the Arbitrator when he imported the principles under the Evidence Act 1950 in the proving of the documentary evidence in respect of the same, and 17.2 the Arbitrator had in contrast to his findings in the Award dismissed MR’s claim for rectification costs. [18] I have after looking at the Award found that the decision of the Arbitrator not to admit the Letter of Award by MR to City Piling i.e the City Piling LOA, is the Arbitrator’s decision for which he had given such weight as he had thought fit to the same after evaluating inter alia the evidence led by the parties, the parties conduct, the opinions of the respective parties experts, and their respective submissions. S/N ggQxFB9/gUu5jtvTObD6w [19] In the Award the Arbitrator had concluded on this issue that “…there was no direct evidence on actual deterioration of the pile capacity or integrity… from the inference drawn by the Engineer and the Respondent’s experts on possible or likely deterioration”. The Arbitrator had also gone on further to state that “For the Respondent’s claim to succeed however, the facts must first be established through the factual witnesses before REX3’s opinion can carry any weight”. [20] I agree with counsel for PG that just because there maybe defects, it does not mean that rectification measures are necessarily warranted and neither does it mean that MR’s purported rectification works are proven. [21] I further note, by way of exhibit A-3 in enclosure 35 of OS 30, that in the Arbitration proceedings, the City Piling LOA was only admitted to the proceedings after PG had closed its case and that it had been by way of a letter of 11.5.2022 objected to by PG’s solicitors on four grounds which amongst others included the late introduction of the said document which raised doubt as to its legitimacy and the lack of any explanation as to its late introduction. [22] From the Notes of Proceedings found at enclosure 8, it then appears that the Arbitrator had on 12.5.2022 then requested both counsels to address this issue and thereafter allowed the admission of this document and thereafter marked it as “IDRABD 28”. [23] I find that counsel for MR did not, from my observation of the said the Notes of Proceedings, challenge the said ID marking and did not recall the witness who was the maker of the said City Piling LOA. S/N ggQxFB9/gUu5jtvTObD6w [24] It is further observed by this Court that the Arbitrator had concluded that he was “…unable to attach much weight..” to this document as the document had not been proven. I do hold that the marking of the said document as an ID does not mean that the Arbitrator has imported the requirements under the Evidence Act. [25] Therefore, I hold that the challenge by MR on this issue of the City Piling LOA, which was marked as an “ID document” is in fact a challenge against the Arbitrator’s evidentiary findings as to the weight to be attached to the said document. I hold that the Arbitrator has the discretion and the power to determine the weight of any evidence in accordance with section 21 of the Arbitration Act 2005 which reads: “(1) Subject to the provisions of this act, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.

Where the parties fail to agree under subsection (1), the arbitral tribunal may, subject to the provisions of this act , conduct the arbitration in such manner as it considers appropriate.

The power conferred upon the arbitral tribunal under subsection (2) shall include the power to:

determine the admissibility, relevance, materiality and weight of any evidence;” Alleged Self Contradictory Findings [26] In any event, as to the alleged self contradictory findings, I find that the Arbitrator did not find any “…causal link to the piling defects S/N ggQxFB9/gUu5jtvTObD6w investigation works, micropiling works and any defect rectification works post determination insofar as a critical delay post determination is concerned” as there was, in the Arbitrator’s own words “…simply insufficient evidence” and that “…it was far from sufficient to discharge the Respondent’s burden of proving its claim linking the alleged defects post determination to the Claimant’s defective works”. I hold that this is consonant with the legal principle under the law of damages that a claimant for damages in contract has to prove the causal link between the breach of contract and the head of damages claimed in respect of the said breach which Justice Tee Geok Hock JC (as he then was) referred to in Sykt Pembinaan Anggerik Sdn Bhd v Malaysia Airports Holdings Bhd [2022] 9 MLJ

[27] I therefore conclude that the Arbitrator had acted on the correct principles when determining the issue on the causal link to the piling defects investigation works and I find no inconsistency in the Arbitrator’s findings and this ground to set aside the Award is in my decision lacking in merits and is hereby dismissed. Extension of Time [28] On the issue of the Extension of Time which MR contends the Arbitrator had acted in excess of his jurisdiction when he allowed a further 24 days over and above EOT 6 submitted by PG, which was allegedly not specifically pleaded and thus PG was deprived of its claim for LAD for RM456,000.00, this Court holds that the Arbitrator did not grant an extension of time beyond the period sought by PG. S/N ggQxFB9/gUu5jtvTObD6w [29] In coming to my decision, I have found in enclosure 5 of OS 30 that PG had in its Statement of Claim prayed in paragraph (c) for a declaration that it is entitled to an EOT until 31.10.2018 which is a period of 142 days or in paragraph thereto (d) alternatively a declaration that the time for completion for its works were set at large. [30] I have also found that the Arbitrator did consider the issue of the suspension and determination by PG to be valid after considering inter alia the notice of determination , the PAM Contract , the Interim Certificates nos 5, 6 and 7 issued by the Architect, the suspension of works, the lack of a challenge by MR until after PG had demobilised from site, the status of such claims at the time of suspension and determination, as well as the 1st and 2nd CNC which was found to have been superseded and subsequently the Arbitrator held that there was no valid contemporaneous reason to withhold the interim payments. [31] Thereafter in light of his aforesaid findings, the Arbitrator then went out to examine EOT No. 6 and found that the respective experts had also found that the suspension was an excusable delay and after considering the submissions of parties held that PG was entitled to 24 days EOT for EOT No. 6. [32] To this I have also observed that PG had inter alia pleaded that it was entitled to suspend its works in its Notice of Arbitration as well as in both its Statement of Claim and the Reply to Defence and Amended Defence to Counterclaim. Accordingly, I do not find any merits in this argument that the Arbitrator had acted in excess of his jurisdiction when it is in my view clear that the dispute on the suspension of works S/N ggQxFB9/gUu5jtvTObD6w based on all of the above falls squarely within the terms and scope of the submission to Arbitration as well as within the cause of action pursued. See Tune Talk Sdn Bhd v Padda Gurtaj Singh [2020] 3 MLJ

[33] I must add that the issue of MR’s entitlement to LAD is of course linked to the EOT and the delay and suspension of works which was found by the Arbitrator to be not attributable to PG. There is therefore no issue of the Arbitrator deciding on a ‘new difference’ which was held by the Court of Appeal in Huawei Technolgies (Malaysia) Sdn Bhd v Maxburry Communication Sdn Bhd & anor appeal [2019] 6 CLJ 588 to mean: “[35] We have considered all the submissions made. Our primary concern is the approach to be undertaken by a court when determining whether an award should be set aside under s. 37(1)(a)(iv) of the Arbitration Act (AA) 2005. The test to be applied has been set out in inter alia, the Court of Appeal case of Kerajaan Malaysia v. Perwira Bintang Holdings Sdn Bhd [2015] 1 CLJ 617 CA and the Federal Court decision of Thai-Lao Lignite Co Ltd & Anor v. Government of the Lao People's Democratic Republic [2017] 9 CLJ 273. The learned judge did not err in setting the test out as follows, namely "that the arbitrator must not decide on a "new difference" which is irrelevant to the claim.” [34] In any event, even if the issues raised above were not pleaded, our Court of Appeal has held that Arbitration proceedings are conducted S/N ggQxFB9/gUu5jtvTObD6w with greater flexibility and freedom from the rigid procedures of litigation and that such failure to plead was not fatal to its claim so long as MR was given every opportunity to submit on that issue. Authority for this can be found in Trident Engineering (M) Sdn Bhd v Ssangyong Engineering & Construction Co Lyd [2017] 2 CLJ 393 where our said Appellate Court had held: “[29] …. we must not lose sight of the fact that arbitral proceeding is not a court proceeding where there is in existence a specific legal procedural regime regulating its process. Arbitration is an alternative dispute resolution module where disputes are resolved by legally as well non-legally trained adjudicators.” Law [35] The Court in deciding any Setting Aside of an Award must play a minimal intervention role and this is clear from such cases as Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 and Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd [2021] 1 MLJ 1. It is trite that the Court does not sit in an appellate capacity in deciding such cases and will only in very rare cases interfere under section 37 of the Arbitration Act 2005 as the parties should be bound by the Award as it is their decision to have the matter heard via Arbitration. As stated by Williams J in the 19th Century case of Hodgkinson v Fernie and Another (1857) 140 ER 712, “You have constituted your own tribunal; you are bound by its decision.” S/N ggQxFB9/gUu5jtvTObD6w [36] I also with respect quote and adopt the statement of our Court of Appeal in Hindustan Oil Exploration Company Ltd v Hardy Exploration (India) Inc [2023] 5 CLJ 677 where the Appellate Court held: “… it is trite law that the court ought not to descend from the bench and enter into the arbitral arena to disturb the arbitral tribunal's determinations and findings on merits …” Decision on OS 30 [37] I hold after evaluating the entire matter before me that this is a case where the Arbitrator had evaluated the evidence before him before coming to his decision and that he had been proper by allowing both sides to present their respective case. The contentions raised by MR is in my view an issue pertaining to merits. Thus, with respect any alleged error of law or fact made by the Arbitrator therein is not appealable. [38] In any event, it is pertinent to note that the Arbitrator had ruled in favour of MR with regards its claim for rectification costs but only decided that MR was not entitled to its full quantum claimed. This again shows that the issue on this point relates to the findings of the tribunal based on the weight to be given on the available evidence before the Arbitrator. [39] I therefore find that the Arbitrator had treated both sides fairly and equally and had not been in breach of the principle of natural justice or contravention of public policy. S/N ggQxFB9/gUu5jtvTObD6w [40] Accordingly, I dismiss enclosure 1 of OS 30 with costs. Enclosure 38 OS 30 and Enclosure 45 OS 30 are therefore academic and will be dismissed with no order as to costs. Enforcement of Award [41] MR had submitted that the Ex Parte Enforcement Order in OS 24 does not comply with the mandatory requirements as set out in Order 69 Rule 8(8) of the Rules of Court 2012 which states: “(8) The order giving permission for enforcement shall contain a statement of the right to make an application to set aside the order” [42] I hold that Order 69 Rule 8(8) of the Rules of Court 2012 is merely a procedural requirement and that no prejudice has been shown to be caused by the failure to adhere to such procedure. I agree with and respectfully quote the decision in Pasukhas Constructions Sdn Bhd v Mtm Millenium Holdings Sdn Bhd [2015] MLJU 957 that the Court is more concerned with the rights of parties in an action are not defeated by technical objections. [43] In any event, the Court of Appeal has in Tune Talk Sdn Bhd v Padda Gurtaj Singh [2020] 3 MLJ 184 held that: “…the jurisdiction of the High Court to recognise and enforce awards is provided under the AA i.e by an Act of Parliament. The AA sets out in clear terms the substantive requirements to obtain recognition and S/N ggQxFB9/gUu5jtvTObD6w enforcement. Order 69 r 8 of the ROC merely provides the procedural means for such recognition and enforcement under the AA.” [44] In the circumstances, I hold there are no merits in the technical objection raised by MR and I hereby allow the enforcement of the Award on the terms as prayed as per prayers 1 (a) to (l) and prayer 2 in enclosure 1 of OS 24. Dated: 5th day of August 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE APPLICANT (in OS24) / PLAINTIFF (in OS 30): Foo Joon Liang, Carissa How Chen Huey and Kho Jia Yuan (Messrs Gan Partnership] COUNSEL FOR THE RESPONDENT (in OS24) / DEFENDANT (in OS30): Sanjay Mohan, Wong Li-Wei and Tan Jia Shen (Messrs Sanjay Mohan] S/N ggQxFB9/gUu5jtvTObD6w