Precious Credence Sdn. Bhd. v Bsl Eco Energy Sdn.Bhd. (BA-12A-52-12/2025)

BSL ECO ENERGY SDN BHD

AD POWER SDN BHD (NO. SYARIKAT: 201601023368(119307-V) … RESPONDEN DALAM MAHKAMAH SESYEN SHAH ALAM DI NEGERI SELANGOR DARUL EHSAN GUAMAN NO.: BA-B53-17-08/2025 ANTARA BSL ECO ENERGY SDN BHD (NO. SYARIKAT: 201501012706) … PLAINTIF

PRECIOUS CREDENCE SDN BHD

AD POWER SDN BHD (NO. SYARIKAT: 201601023368(119307-V) … RESPONDEN GROUNDS OF JUDGMENT

This is a judgment following an appeal to the Judge in Chambers.

The appeal emanated from the decision of the Learned Sessions Court Judge, on 20 November 2025, which dismissed the Appellant’s application for a stay of proceedings pending arbitration pursuant to Section 10 of the Arbitration Act 2005 (“Stay Application”).

On 30 August 2018, Sarawak Energy Berhad (Company No.: 007119-D) appointed the Appellant/First Defendant (“D1”) as the main contractor for the ‘centralised solar power system for 126 houses’, which includes supply, delivery, installation, testing, and commissioning of the SARES Phase 3 Solar Power Projects in Batang Rajang, Kapit B, Sarawak (“Projects”).

On 15 September 2018, D1 issued a letter of award appointing the Respondent/Plaintiff (“Plaintiff”) as their sub-contractor for the Projects (“LOA”).

Following the Plaintiff’s acceptance of the LOA, the Plaintiff and D1 entered into a sub-contract agreement on 31 January 2019 (“Sub-Contract").

Disputes arose over D1’s failure to pay the outstanding sum of RM452,162.64 (“Outstanding Sum”) under the Sub-Contract to the Plaintiff, and over D1’s conduct in paying that Outstanding Sum to the Second Defendant (“D2”).

On 14 August 2025, the Plaintiff filed a civil suit at the Shah Alam Sessions Court and asserted that:

under the Sub-Contract, D1 had already paid a total sum of RM5,222,532.36 to the Plaintiff;

since the Plaintiff had completed the Projects, D1 should pay the Outstanding Sum to the Plaintiff;

however, D1 failed to pay the Outstanding Sum to the

instead of paying the Outstanding Sum to the Plaintiff, D1 issued a Hong Leong Bank Cheque No.: 025932 and paid the Outstanding Sum to D2’s Maybank Account No.: 5- 12307-61798-2;

the Plaintiff was informed by D1 that the payment of the Outstanding Sum was made in accordance with D2’s request, as set out in D2’s letter dated 2 February 2020 (“D2’s Letter”), as a set-off against the Plaintiff’s indebtedness to Ariket Sdn Bhd.

the Plaintiff refuted the allegation made by D2 and did not condone with D1’s conduct in paying the Outstanding Sum to D2 on 31 January 2020;

to the Plaintiff, both D1 and D2 defrauded and conspired to injure the Plaintiff;

the Plaintiff also impugned the payment and the contents of D2’s Letter on the following reasons:

firstly, on the issue of fraud:

the Plaintiff never gave any consent to D1 or D2 for the Outstanding Sum to be paid to D2;

(ii) D1 failed to get any confirmation from the Plaintiff before paying the Outstanding Sum to D2;

(iii) D1 issued a payment voucher and made the payment before D2 issued the impugned letter;

(iv) D2 fraudulently caused D1 to pay the Outstanding Sum to D2; and

D2 fraudulently received the Outstanding Sum;

(ii) secondly, D1 and D2 conspired to injure the Plaintiff by D1 disbursing the Outstanding Sum to D2 and subsequently withholding the Outstanding Sum from the Plaintiff.

In paragraphs 12 and 13 of D1’s Defence, D1 admitted that:

D1 had paid the Plaintiff RM5,223,532.36;

the balance due under the Sub-Contract was RM452,162.64; and

the Outstanding Sum was paid to D2. ISSUE

Should the Stay Application be allowed?

The Learned Counsel for D1 contended that since the disputes arose from the Sub-Contract, the proceedings of the Shah Alam Sessions Court Civil Suit No.: BA-B53-17-08/2025 must be stayed pursuant to Section 10 of the Arbitration Act 2005, and the disputes must be referred to arbitration as provided by Clause 16 of the Sub-Contract.

I am unable to accede to the arguments advanced by the Learned Counsel for D1 for the reasons set out below.

During a case management on 22 September 2025 before the

the Learned Counsels for the Plaintiff, D1 and D2 agreed to proceed with mediation before the Learned Sessions

they also agreed not to recuse the Learned Sessions Court Judge from hearing the civil suit after the parties mutually agreed to proceed with the mediation.

By agreeing to proceed and participate in the Court mediation process:

D1 had taken further steps in the proceedings and submitted to the Court’s jurisdiction (JSB v. ACSB [2024] 1 MLJ 195);

D1 had waived all rights to refer any dispute under the Sub-Contract to arbitration (Thamesa Designs Sdn Bhd & Ors v. Kuching Hotels Sdn Bhd [1993] 3 MLJ 25);

D1 had also confirmed that the disputes should be resolved by the Court and not through arbitration;

D1 is now estopped from changing its position (Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant

D1 cannot approbate and reprobate (Cheah Theam Kheng v. City Centre Sdn Bhd & Other Appeals [2012] 2 MLRA 125).

Based on the waiver, confirmation, and conduct of D1, the Stay Application is not only devoid of merit, but it has become otiose.

On 22 September 2025, all parties agreed that the Court had the jurisdiction to hear and dispose of the civil suit initiated by the Plaintiff.

All parties also agreed to participate in the Court mediation process.

Therefore, the action taken by D1 in filing the Stay Application on 27 September 2025, subsequent to the agreement on the Court’s jurisdiction and the Court mediation process, is a clear afterthought on the part of D1.

Only parties to the agreement have the right to sue or be sued for breach of contract.

Clause 16 of the Sub-Contract applies solely to the parties involved in the Sub-Contract.

The parties to the Sub-Contract are only the Plaintiff and D1.

D2 is not a party to the Sub-Contract.

As D2 is not a party to the Sub-Contract, there exists no understanding or agreement that disputes are to be resolved exclusively through arbitration.

Without any arbitration agreement between the Plaintiff and D2, or between D2 and D1, D1 has no basis to file the Stay Application.

The Court is the proper forum to settle disputes involving the Plaintiff, D1, and D2, especially given the Plaintiff’s claims of fraud and conspiracy involving both D1 and D2. (Jaya Sudhir Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 5 MLRA

Arbitration is not the proper forum to resolve disputes involving the Plaintiff, D1, and D2.

The Sub-Contract does not confer on D1 any right to make payments to D2 in respect of monies owed to the Plaintiff.

Consequently, D1’s payment of the Outstanding Sum to D2 falls outside the scope of the Sub-Contract.

As this payment is not part of the Sub-Contract, Clause 16 cannot be relied on to support the Stay Application.

The Plaintiff is challenging D2’s claim that it secured the Plaintiff’s consent to use the Outstanding Sum as a set-off against the debt owed to Ariket Sdn Bhd.

The alleged consent D2 received from the Plaintiff is not part of the Sub-Contract.

Since the consent is not part of the Sub-Contract, Clause 16 does not apply to support the Stay Application.

Based on the above reasons, it is my finding that there is no basis to allow the Stay Application.

For the foregoing reasons, the appeal is dismissed with costs of RM5,000.00, as agreed by the parties, subject to the allocatur fee.

The decision of the Learned Sessions Court Judge is affirmed. Dated this 6th day of May 2026 HELMI BIN HAMZAH JUDICIAL COMMISSIONER HIGH COURT IN MALAYA AT SHAH ALAM NEGERI SELANGOR Counsel for the Appellant/First Defendant : Mr. Lee Tze Jiet (Mr. Surendra Ananth) (Messrs TJ Lee) Counsel for the Respondent/Plaintiff : Mr. Preakas Sampunathan (Mr. Miguel Jude Sequerah) (Messrs Preakas & Partners)