Setiakon Builders Sdn Bhd v Bellworth Developments Sdn Bhd (WA-24C(ARB)-35-08/2023)

the application by Setiakon Builders Sdn Bhd (‘Setiakon’) in O.S. No. WA-24C(ARB)-35-08/2023 (‘O.S. No. 35’) to enforce the Final Award dated 7.7.2023 (‘Award’) by the learned Arbitrator, P. Gananathan Pathmanathan (‘Arbitrator’) pursuant to s 38 AA 2005 (‘Enforcement Application’); and

the application by Bellworth Developments Sdn Bhd (‘Bellworth’) in Originating Summons No. WA-24C(ARB)-41- 09/2023 (‘O.S. No. 41’) to set aside the Award pursuant to subparagraphs 37(1)(a)(iii), 37(1)(a)(iv), 37(1)(a)(v), 37(1)(a)(vi), 37(1)(b)(ii) and 37(2)(b)(ii) and sub-s 37(3) of the AA 2005 (‘Setting Aside Application’). [3] After careful consideration of the affidavit evidence and the oral and written submissions of the parties, I had dismissed the Setting Aside Application and allowed Setiakon’s Enforcement Application. [4] Bellworth has since filed its Notice of Appeal against my decision as above stated. [5] Subsequently Setiakon filed a Notice of Cross Appeal in respect of my decision in the Setting Aside Application. Setiakon contended that my decision should be altered to the extent of my rejection of Setiakon’s submissions as stated below regarding the calculation of the three months’ timeline for the Arbitrator to submit his Draft Final Award to the Director of the Asian International Arbitration Centre (‘AIAC’) for technical review under Rule 12(2) of the AIAC Arbitration Rules 2018 (‘AIAC Rules’):

that the three months’ period stipulated under Rule 12(2) of the AIAC Rules shall only run from the date when the Arbitrator made a declaration in writing to both the Director and the parties that the proceedings closed pursuant to Rule 12(1) of the AIAC

that the final date for the Arbitrator to submit his Draft Final Award to the Director of AIAC for a technical review fell on 28.5.2023, or alternatively, earliest on 19.4.2023, if the Court was to take the position that the stipulated three months’ period was to run from 19.1.2023. [6] These are my full grounds of judgment. The Cause Papers [7] The cause papers in relation to the applications are as follows:

Bellworth’s O.S. dated 1.9.2023 (encl. 1);

Bellworth’s AIS affirmed by its Chief Executive Officer, Kuok Khoon Jay Kevin @ Kuek Khoon Jay Kevin, on 1.9.2023 (encls. 2 - 133);

Setiakon’s AIR affirmed by its Director of Contracts, Yong Han Wei on 27.9.2023 (encl. 135);

Bellworth’s AIR affirmed by the same deponent on 19.10.2023 (encl. 137); and

Bellworth’s Corrective Affidavit affirmed by its solicitor, Saranjit Singh a/l Surjit Singh on 15.11.2023 (encl. 138).

Setiakon’s O.S. dated 15.8.2023 (encl. 1);

Setiakon’s Affidavit In Support (‘AIS’) affirmed by the same deponent on 15.8.2023 (encl. 2);

Bellworth’s Affidavit In Reply (‘AIR’) affirmed by the same deponent on 27.9.2023 (encl. 5);

Bellworth’s Notice of Intention to use Affidavit (encls. 2 - 133 in O.S. No. 41) dated 27.9.2023 (encl. 6);

Setiakon’s Notice of Intention to use Affidavit (encl. 135 in O.S. No. 41) dated 17.10.2023 (encl. 8); and

Setiakon’s AIR affirmed by the same deponent on 17.10.2023 (encl. 9). Background Facts [8] Setiakon is a private limited company incorporated under the laws of Malaysia and having its registered address at Unit 30-01, Level 30, Tower A Vertical Business Suite, Avenue 3, Bangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur. Its business address is 13, Jalan Cempaka SD12/1, Bandar Sri Damansara, 52200 Kuala Lumpur. [9] Bellworth is a private limited company incorporated under the laws of Malaysia with its registered and business address at No. 28, Jalan Wan Kadir 1, Taman Tun Dr. Ismail, 60000 Kuala Lumpur. [10] By way of the Letter of Award dated 17.12.2012 (‘LoA’), Bellworth engaged Setiakon as its main contractor for the execution and completion of the “Super-structure Works for Cadangan Pembangunan 2 Blok Pangsapuri Servis 27 Tingkat Yang Mengandungi Blok A (60 Unit) dan Block B (105 Unit) Di atas 5 Tingkat Podium (6 Unit Perdagangan, 4 Tingkat Tempat Letak Kereta dan 1 Tingkat Kemudahan Penduduk), Serta 1 Tingkat Separa Basement Tempat Letak Kereta di Atas Lot 50973, Lot 53610 dan Lot 53611, Jalan Wan Kadir, Taman Tun Dr.Ismail dalam Bandaraya Kuala Lumpur” (‘Project’). The original contract sum is RM168,300,000.00. [11] According to Clause 1.0 of the LoA, Setiakon’s scope of work is to supply labour, materials, plant, machineries, and tools including equipment, services and supervision to construct and complete the super-structure works for the Project (‘Works’). [12] On 2.6.2014, which is after Works had commenced, the parties executed the Agreement and Conditions of PAM Contract 2006 (With Quantities) (‘PAM Contract’) containing the terms and conditions governing the appointment of Setiakon as the main contractor for the Project, including the Addendum to the Articles of Agreement and Schedule of Conditions of PAM Contract 2006 (With Quantities) (‘Addendum’) (hereinafter collectively referred to as the ‘Contract’). [13] Clause 3.0 of the LoA provides that the total contract period is 25 months from the site possession dated 26.12.2012 and the date of completion is 25.1.2015. However, Setiakon contended that the LoA was only issued on 31.12.2012 and site possession was given on or about 9.1.2013. [14] During the course of the Project, Setiakon had submitted the following applications for extension of time (‘EoT’) to Bellworth or the Architect for assessment: EoT No. Date EoT Applied EoT No. 1 17.7.2014 75 days EoT No. 2 3.12.2014 187 days EoT No. 2 Appeal 6.7.2015 29 days EoT No. 3 19.5.2015 68 days EoT No. 3 Appeal 1.4.2016 253 days [15] EoT No. 1 and EoT No. 2 were partially allowed by the Architect. By way of Certificate of EoT No.1 dated 10.9.2014 and Certificate of EoT No. 2 dated 20.1.2015, Bellworth granted Setiakon 162 days of EoT. The original date of completion was therefore extended to 6.7.2015. [16] On 6.7.2015, Setiakon submitted an appeal with regards to EoT No. 2 but this was rejected by the Architect on 9.7.2015. [17] In respect of EoT No. 3, the Architect notified Setiakon through the letter dated 1.6.2015 that he was unable to assess the application due to insufficient particulars and requested Setiakon to furnish better particulars within 28 days. [18] On 9.6.2015, Setiakon replied by submitting what Bellworth alleged are 40 new events which are unrelated to EoT No. 3. This was rejected by the Architect on 19.6.2015 and he reiterated his request for further particulars. [19] Bellworth issued a Certificate of Non-Compliance (‘CNC’) on 7.7.2015 stating that Setiakon had failed to complete the Works by the extended date of completion. On the same date, the Architect issued a Notice to Contractor for Deduction of Liquidated Damages (‘LD’) to inform Setiakon of its intention to impose LD at the rate of RM50,000.00 per day. [20] By the letter dated 17.12.2015, Bellworth informed Setiakon of its intention to deduct LD from 7.7.2015 to 3.11.2015 in the sum of RM6,000,000.00 and indicated that Bellworth will deduct the sum of RM1,500,000.00 from Certificate No. 34. [21] Setiakon claimed that it had completed the Works around the end of October 2015. Hence, by the letter dated 26.10.2015, Setiakon requested for an inspection for purposes of the Certificate of Practical Completion (‘CPC’). The Architect was of the view that the Works have not achieved practical completion. [22] Setiakon further alleged that Bellworth had started to take over the Residential Blocks (save for the Penthouse) since 10.1.2016. In addition, the Certificate of Completion and Compliance (‘CCC’) for the Project was obtained on 26.1.2016. [23] Oon 28.1.2016, the Architect issued a Certificate of Partial Completion for Occupied Part (‘CPCOP’) certifying that all the works on Level 6 to Level 26, which represented 85.38% of the total value of the Works, had been completed and taken possession by Bellworth. [24] The CPC was issued on 15.3.2016. [25] On 1.4.2016, Setiakon submitted its appeal against EoT No. 3 on the ground that the reasons which it had submitted previously entitled it to an EoT until 15.3.2016. The Architect responded on 28.4.2016 denying that his assessment of EoT No. 3 was unfair and maintaining that no further EoT would be given. [26] Disputes arose between the parties and Setiakon proceeded to refer the same to arbitration for final determination in accordance with Clause 34.5 of the PAM Contract. [27] Pursuant to the Notice of Arbitration dated 6.8.2019, Setiakon claimed against Bellworth for, among others, the following: “51. …

A declaration that Setiakon is entitled to extensions of time for the completion of the Works pursuant to applications for extension of time under EOT No.1,

(ii) A declaration that the Certificate of Non-Completion dated 7.7.2015 is unlawful and/or invalid;

(iii) A declaration that Setiakon had achieved practical completion on 26.1.2016, the date when the Certificate of Completion and Compliance was issued by the Architect;

(iv) Outstanding payment for all works completed by Setiakon amounting to RM11,452,910.00;

Release of the 1st Moiety and 2nd Moiety of Retention

(vi) Payment of RM2,642,700.96 for the loss of interest income as a direct consequence of Bellworth’s failure to make timely payment for the Interim Certificates;

(vii) Payment of RM9,766,389.98 being the loss and/or expense incurred by Setiakon due to the prolonged period of work;

(viii) General damages and other expenses, losses, expenses and/or additional costs arising from and/or as a result of the breaches of contract or duty in tort by Bellworth to be assessed by the Learned Arbitrator;

(ix) Interest at any rate deemed fit and reasonable by the Learned Arbitrator on all sums adjudged to be payable by Bellworth to Setiakon, to be calculated from a date to be determined by the Learned Arbitrator until full settlement; … ”. [28] By way of the letter dated 14.10.2019, Bellworth issued a “Response to the Notice of Arbitration” to Setiakon. There was no counterclaim against Setiakon in the arbitration. [29] In paragraph 16.1 of the Award, the Arbitrator decided as follows: “1. A declaration that the Certificate of Non-Completion dated 7.7.2015 is unlawful and/or invalid as prayed for in paragraph 210(ii) of the Statement of Case;

A declaration that the Respondent is not entitled to pursue any claims and/or sett-off against the Claimant for Liquidated Damages as prayed for in paragraph 210(iii) of the Statement of Case;

The Claimant’s claim is valid in the sum of RM11,452,910.00 only awarded to it in respect of the wrongly deducted Liquidated Damage, which is to be returned and paid to the Claimant as prayed for in paragraph 210(iv) of the Statement of Case;

The Respondent shall pay the Claimant within thirty

calendar days of the date of this Final Award, the sum of RM11,452,910.00 only in full and final settlement of all maters in difference and referred to the tribunal in this arbitration;

The Respondent shall pay interest at the rate of 5% simple interest per annum on the said sum of RM11,452,910.00 only from the date of the Notice of Arbitration of 6.8.2019 until the Respondent’s payment in full of the awarded sum of RM11,452,910.00;

The Respondent shall bear and pay Costs in the sum of RM693,036.08 only, which includes the Claimant’s Costs of Reference and the Costs of the Award, to the Claimant and the AIAC within thirty (30) calendar days of the Final Award;

The Respondent shall pay interest at the rate of 5% per annum on the said sum of RM693,036.08, being Costs of Reference and the Costs of the Award from the date of the Final Award until the Respondent’s payment in full of the Costs; and

For the avoidance of doubt, all other request, and claims referred to the Tribunal in these proceedings (save for those expressly allowed in this Final Award) are rejected/dismissed.”. I. The Setting Aside Application [30] Bellworth’s application was made pursuant to subparagraphs 37(1)(a)(iii), 37(1)(a)(iv), 37(1)(a)(v), 37(1)(a)(vi), 37(1)(b)(ii) and 37(2)(b)(ii) and sub-s 37(3) of the AA 2005 which read as follows: “Application for setting aside.

(1) An award may be set aside by the High Court only if –

the party making the application provides proof that – …

(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) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;

subject to subsection (3), the award contains decisions on matters beyond the scope of the submission to arbitration; or

(vi) 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

the High Court finds that – …

(ii) the award is in conflict with the public policy of Malaysia.

Without limiting the generality of subparagraph

(1)(b)(ii), an award is in conflict with the public policy of Malaysia where – …

a breach of the rules of natural justice occurred - …

(ii) in connection with the making of the award.

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. …”. [31] In O.S. No. 41, Bellworth’s grounds in support of the Setting Aside Application are stated as – “3. The arbitral procedure was not in accordance with the agreement of the Parties within the meaning of section 37(1)(a)(vi) AA 2005 because the Learned Arbitrator had breached the AIAC Rules when he submitted his draft Final Award to the Director of the AIAC for technical review outside the three (3) months stipulated under Rule 12(2) AIAC Rules. As such, the Final Award ought to be set aside.

The Final Award deals with a dispute not contemplated by or not falling within the terms of the submission, or beyond scope of submission to arbitration within the meaning of sections 37(1)(a)(iv) and 37(1)(a)(v) AA 2005 because in deciding on the validity of the Certificate of Non-Completion (“CNC”) as a standalone issue independent of the Defendant’s extension of time (“EOT”) applications, the Learned Arbitrator effectively introduced and decided on a new difference which was not in dispute (“New Difference”).

Further, (a) the Plaintiff was unable to present its case within the meaning of section 37(1)(a)(iii) AA 2005 and/or (b) the Final Award is in conflict with the public policy within the meaning of section 37(1)(b)(ii) AA 2005 read together with section 37(2)(b)(ii) AA 2005 by reason of a breach of natural justice which occurred in connection with the making of the Final Award and/or

the arbitral procedure was not in accordance with the agreement of the Parties within the meaning of section 37(1)(a)(vi) AA 2005 because the Learned Arbitrator decided on the New Difference thereby acted outside the contemplation of the Parties’ evidence and submissions and therefore did not understand the Parties’ case at all by reason of the following:

5.1. In deciding on the validity of the CNC as a standalone issue independent of the Defendant’s EOT applications, the Learned Arbitrator had introduced the New Difference that the validity of the CNC could still be determined independently despite the EOT applications being invalid.

5.2. The New Difference was contrary to the evidence and submissions of the Parties.

5.3. Further, the Learned Arbitrator did not bring this New Difference to the Parties’ attention.

5.4. Parties were not given the opportunity to address and make submissions on the New Difference.

5.5. The Final Award contained a chain of reasoning which is inconsistent, illogical, defective and/or had no nexus with the Defendant’s case and/or otherwise shocks the conscience.

The Final Award is in conflict with the public policy of Malaysia within the meaning of section 37(1)(b)(ii) AA 2005 read together with section 37(2)(b)(ii) AA 2005 by reason of a breach of natural justice which occurred in connection with the making of the Final Award because it contains a chain of reasoning which is inconsistent, illogical and/or defective.”. - The Legal Principles [32] An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties (see sub-s 36(1) AA 2005). [33] This Court cannot intervene in matters governed by the AA 2005 except where so provided in the AA 2005 (see s 8). Thus, an arbitral award cannot be challenged except on the limited grounds as enumerated in s 37 AA 2005. [34] The court’s powers under s 37 AA 2005 are not invoked in the field of appellate jurisdiction. The court does not scrutinise the merits of the parties’ respective case or responses before the arbitral tribunal (see Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal [2020] 6 MLRA 124, Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113 and The Government of India v Cairn Engergy India Pty Ltd & Ors [2014] 9 MLJ 149). [35] As submitted by the learned counsel for Setiakon, the courts in Malaysia have repeatedly adopted the approach of minimal intervention in arbitral awards and for arbitral finality to be encouraged. The courts recognise that constant interference in arbitral awards will defeat the purpose of arbitration. [36] The burden to prove the grounds of challenge in the Setting Aside Application lies on Bellworth. Nonetheless, the High Court retains a residual discretion not to set aside an award even though the ground(s) for setting aside the same have been established (see Master Mulia Sdn Bhd v Sigur Ros Sdn Bhd [2020] 12 MLJ 198). [37] A provision in the AA 2005 on the general law on the setting aside of arbitral awards which is worthy of mention is s 20 which serves as a reminder to the arbitral tribunals on the need to treat the parties with equality and to give each party a fair and reasonable opportunity of presenting their case. [38] Moving on to the legal principles in relation to each of the subparagraphs under s 37 AA 2005 which is being relied upon by Bellworth in the Setting Aside Application, these have been set out by this Court in Propel Synergy Sdn Bhd v Vistasik Sdn Bhd and another case [2022] MLJU 824 (the appeal against the decision was dismissed by the Court of Appeal on 7.11.2022) as in that case, Propel Synergy Sdn Bhd had cited the same provisions in the AA 2005 in its challenge against the arbitral award. [39] To avoid lengthy quotations from the relevant judgments on this matter, I shall refer to the paragraphs in my Grounds of Judgment in Propel Synergy (supra) where the legal principles were outlined:

paragraphs 32 and 33 for the legal principles as laid down in relation to subparagraph 37(1)(a)(iii) AA 2005;

paragraphs 34 - 37 for the legal principles as laid down in, among others, Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLJ 608, PT Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR 98 and Kerajaan Malaysia v. Perwira Bintang Holdings Sdn Bhd [2015] 1 CLJ 617, in relation to subparagraphs 37(1)(a)(iv) and (v) AA 2005 (see too, East Coast Economic Region Development Council v. Multi-Spex

paragraphs 38 and 41 for the legal principles in relation to subparagraph 37(1)(a)(vi) AA 2005; and

paragraphs 42 - 45 for the legal principles as laid down in, among others, Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 and Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 12 MLJ 198 in relation to subparagraphs 37(1)(b)(ii) and 37(2)(b)(ii) AA 2005 [see too, the case authorities which have laid down useful guidelines on the meaning of “natural justice” in the context of paragraph 37(2)(b) and the legal principles surrounding the application of subparagraph 37(1)(b)(ii) read with paragraph 37(2)(b) of the AA 2005 as a ground to challenge an award, namely, Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86, Trustees of Rotoaira Forest Trust v Attorney-General [1999] 2 NZLR 452, Kyburn Investments Ltd v Beca Corporate Holdings Ltd [2015] 3 NZLR 644 and Sigur Ros (supra); the legal principles in these cases were applied by this Court in, among others, Kris Heavy Engineering & Construction Sdn Bhd v. EP Engineering Sdn Bhd [2019] MLRHU 1536, Johawaki Development Sdn Bhd v Majlis Agama Islam Wilayah Persekutuan and another Summon [2020] MLJU 660, Sunway Creative Stones Sdn Bhd v Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd and another summons [2021] 2 MLRH 78, SJIC Bina Sdn Bhd v Iskandar Regional Development Authority and another case [2020] MLJU 2366 and M101 Entity Sdn Bhd v Geopancar Sdn Bhd and another case [2022] MLJU 1354]. [40] In Pancaran Prima (supra), the apex court said that: “[139] Like any other exercise of discretion, the discretion to set aside an award for breach of the rules of natural justice must be exercised judiciously and only when it is just to do so. The authorities are clear that in considering whether the discretion should be exercised, the court must undertake an evaluation of relevant factors such as those identified in Kyburn, amongst which would be 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 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 the evaluation process. [140] Kyburn explained the position in the following terms: “... a finding of a breach of the rules of natural justice does not mean that the arbitral award must be set aside, that the power of the court to set aside an award is discretionary and will not be exercised automatically in every case. The discretion enables the court to evaluate the nature and impact of the particular breach in deciding whether the award should be set aside, the policy of encouraging arbitral finality will dissuade the court from exercising discretion when the breach is relatively immaterial or was not likely to have affected the outcome.” (see too, Tunas Manja Development & Construction (KL) Sdn Bhd v SPNB Aspirasi Sdn Bhd and another application [2024] 7 MLJ 617 where the decision by this Court was affirmed by the Court of Appeal on 2.1.2024 and motion for leave to appeal to the Federal Court was dismissed on 29.5.2024). [41] In the determination of the issues which arose for consideration in the present case, I was guided by the legal principles as outlined above. - Analysis and Findings 1st Ground: Whether the Award should be set aside under subparagraph 37(1)(a)(vi) AA 2005 as the submission of the Draft Final Award for technical review was not in accordance with Rule 12(2) of the AIAC Rules thereby depriving the Arbitrator of his mandate and he has no jurisdiction to make a valid award [42] Rule 12(1) - (3) of the AIAC Rules provide as follows: “Rule 12

Following the final oral or written submissions, the arbitral tribunal shall declare the proceedings closed. The arbitral tribunal’s declaration and the date on which the proceedings are closed shall be communicated in writing to the Parties and to the Director. After this date, the Parties may not submit any further evidence or make any further submission with respect to the matters to be decided in the award.

The arbitral tribunal shall, before signing the award, submit its draft of the final award (the “Draft Final Award”), to the Director within three months for a technical review. The time limit shall start to run from the date when the arbitral tribunal declares the proceedings closed pursuant to Rule 12(1).

The time limit may be extended by the arbitral tribunal with the consent of the Parties and upon consultation with the Director. The Director may further extend the time limit in the absence of consent between the Parties if deemed necessary. …”. [43] The parties do not dispute that –

the last date for oral clarification before the Tribunal took place on 19.1.2023;

in the letter dated 28.2.2023 to the parties’ solicitors and copied to AIAC, the Tribunal declared the proceedings to be closed as of 19.1.2023 pursuant to Rule 12(1) of the AIAC Rules and henceforth, the parties shall not submit any further evidence or make any submissions; and

by the letter dated 19.4.2023, the Arbitrator wrote to the Director of the AIAC enclosing the Draft Final Award for technical review. The Arbitrator referred to the letter dated 28.2.2023 and stated that the time limit for the Tribunal to submit the Draft Final Award to the AIAC under Rule 12(1) AIAC Rules is 19.4.2023. [44] Bellworth contended that the draft Final Award was only submitted for technical review on 19.4.2023, one day after the prescribed time limit, contrary to Rule 12(2) AIAC Rules which requires the submission to be made within three months from the date of closure of proceedings. [45] Mr. N. Nahendran emphasised that the operative term is the date when the proceedings are closed, and not the date when the tribunal declared in writing that the proceedings are closed. [46] In computing time, the learned counsel relied on the English case of Migotti v Colvill [1879] 44 CPD 233 (CA) where it was held that: “… the term a calendar month’s imprisonment is to be calculated from the day of imprisonment to the day numerically corresponding to that day in the following month less one.” It was submitted that this position was cited with approval in Dato’ Valumalai v Muthusamy v Dato’ Dr Tan Chin Woh [2010] 5 CLJ 758, Lee Kuang Guat (suing as the father of the deceased, Lee Chu Ling) v Chiang Woei Chien (practicing as Chiang Chambers, Advocates and Solicitors) [2021] 3 MLJ 505, Jeow Fong Mei v Chong Mee Yoke [1996] 1 MLJ 387 and Ketua Pengarah Hasil Dalam Negeri v Yayasan Buah Pinggang Kebangsaan Malaysia [2024] 4 MLJ 288. [47] Bellworth argued that –

the Arbitrator had breached the time limit of three months as prescribed in Rule 12(2) AIAC Rules and this breach is not merely procedural but goes to the jurisdiction of the Tribunal. Such failure deprived the Arbitrator of his mandate and therefore, his jurisdiction. The Arbitrator had acted in excess of his jurisdiction as the arbitral procedure adopted by him was not in accordance with the agreement of the parties (see Redfern and Hunter on International Arbitration, Sixth Edition, Oxford University Press, 2015; Ting Kang Chung John v Teo Hee Lai Building Constructions Pte Ltd and others [2010] SGHC 20; and Ken Grouting Sdn Bhd v RKT Nusantara Sdn Bhd and another appeal [2021] 4 MLJ 622). Hence, the Award should be set aside pursuant to subparagraph 37(1)(a)(vi) AA 2005;

even though Rule 12(3) AIAC Rules gives the discretion to the Director of the AIAC to extend time for submission of the Draft Final Award for technical review, the Director of the AIAC did not, in this case, exercise the said discretion. Therefore, the existence of a mechanism for an EoT does not derogate from the Arbitrator’s duty to comply with Rule 12(2) AIAC Rules; and

compliance with timelines under the AIAC Rules remains solely for the Arbitrator to do and the fact that Bellworth did not object to the late submission of the Draft Final Award is immaterial (see Ken Grouting (supra, at paragraphs 102 - 116, pp 646 - 650) where the Court of Appeal was not inclined to agree with the decision of this Court in Sunway Creative Stones (supra); the motion for leave to appeal to the Federal Court in Ken Grouting was dismissed on 8.4.2021). [48] Setiakon retorted that the issue raised by Bellworth pertains to the “computation of the timeline” rather than non-compliance or breach of the procedural timeline as provided under the AIAC Rules. [49] Setiakon submitted four arguments in response to Bellworth’s contentions, namely -

Argument No. 1 Based on a plain reading of Rule 12(2) of the AIAC Rules, the three months’ period shall run from the date when the Arbitrator made a written declaration that the proceedings were closed, and not from the date when the proceedings are closed. Setiakon invited the Court to compare Rule 12(2) of the AIAC Rules with Rule 11 of the AIAC Arbitration Rules 2013, Rule 21.3 of the PAM Arbitration Rules and Article 14.1 of the Singapore Institute of Architects Arbitration Rules as shown below: Rule 11 of the AIAC Arbitration Rules 2013: “1. The arbitral tribunal shall render its final award within a period which is limited to 3 months. Such time limit shall start to run from the date of the closing of final oral or written submissions. The arbitral tribunal shall inform the Director of the KLRCA of such date.” Rule 21.3 of the PAM Arbitration Rules: “21.3 The Arbitrator shall deliver his award as soon as practical but not later than three (3) months from his receipt of the last closing statement from the parties.” Article 14.1 of the Singapore Institute of Architects Arbitration Rules: “Unless all parties agree otherwise, the Arbitrator shall make his Award in writing within sixty (60) days from the date on which the hearing is closed and shall state the reasons upon which his Award is based. The Award shall state its date and shall be signed by the Arbitrator.”. Based on the comparison, Setiakon contended that, unlike the other Arbitration Rules, including the predecessor AIAC 2013 Edition, Rules 12(1) and 12(2) of the AIAC Rules expressly require the Arbitrator to make a “declaration in writing to the Parties and the Director”. Rule 12(2) makes it clear that the three months shall start to run from the date when the Arbitral Tribunal declares the proceedings closed. This differs from the wordings in the other Arbitration Rules which specify that the stipulated period shall start to run from the “date of last oral or written submissions” or “date on which the hearing is closed”. In this case, although the proceedings were closed on 19.1.2023, the Arbitrator only declared in writing that the proceedings were closed by way of his letter dated 28.2.2023. Hence, it was submitted that the literal reading of Rule 12(2) AIAC Rules means that the date shall run from the date the Arbitrator makes the declaration i.e. on 28.2.2023, and not the date when the proceedings were closed. The Arbitrator’s position that the last date fell on 19.4.2013 is irrelevant in this context as the plain meaning of Rule 12(2) shall prevail. Moreover, Bellworth is challenging the position taken by the Arbitrator by contending that the last date fell on 18.4.2013.

Argument No. 2 Even if Rule 12(2) AIAC Rules is interpreted to mean that the three months shall run from the date of closure of proceedings, the Arbitrator was correct that the last day fell on 19.4.2023. Setiakon referred to ss 2, 3 and 105 of the Interpretation Acts 1948 and 1967 [Act 388] as well as the Introductory Provisions and Rule 1(3) of the AIAC Rules which provide that: “The AIAC Arbitration Rules consist of the following parts: Part I – AIAC Arbitration Rules, Part II – UNCITRAL Arbitration Rules (as revised in 2013) and

To the extent that there is a conflict between Part I and Part II of the AIAC Arbitration Rules, the provisions in Part I shall prevail.”. Setiakon additionally referred to Article 2 in the UNCITRAL Arbitration Rules (as revised in 2013) (‘UNCITRAL Arbitration Rules’) as set out in Part II of the AIAC Rules as follows: “Notice and calculation of periods of time

A notice, including a notification, communication or proposal, may be transmitted by any means of communication that provides or allows for a record of its transmission. …

For the purpose of calculating a period of time under these Rules, such period shall begin to run on the day following the day when a notice is received. If the last day of such period is an official holiday or a non-business day at the residence or place of business of the addressee, the period is extended until the first business day which follows. Official holidays or non-business days occurring during the running of the period of time are included in calculating the period.”. Setiakon submitted that the word “communication” in Article 2.1 above would include submissions and Award (see Articles 20, 21 and 34.6 of the UNCITRAL Arbitration Rules). Based on Rule 12(2) AIAC Rules, read with Article 2 of the UNCITRAL Arbitration Rules, even if the three months shall start to run from the date of closure of proceedings i.e. 19.1.2023, the commencement of the three months period shall be on 20.1.2023, which is the day after the final oral submissions were communicated to the Arbitral Tribunal. With regards to the cases cited by Bellworth, namely, Migotti v Colvill (supra), Dato’ Valumalai (supra), Lee Kuang Guat (supra) and Jeow Fong Mei (supra), Setiakon argued that in the instant case, Article 2 of the UNCITRAL Arbitration Rules requires the date of closure of proceedings, i.e. the date the last oral submission was communicated to the Arbitrator, to be excluded from the computation. Furthermore, the same method of computation of the timeline as the Arbitrator in this case was adopted in Ragawang Corporation Sdn Bhd [2022] MLJU 2021 at paragraph 26 and Sunway Creative Stones (supra, at paragraphs 30 and 52; the Court of Appeal in Ken Grouting (supra) only expressed disagreement with the application of waiver of the right to object, and not on the calculation of the three months period, to which I would say correctly reflects the decision by the appellate court).

Argument No. 3 In any event, Bellworth and the Director of AIAC had waived their right to raise an objection about the alleged non-compliance by the Arbitrator in submitting the Draft Final Award to the Director of AIAC. Setiakon cited Article 32 in the UNCITRAL Arbitration Rules on “Waiver of Right to Object” which reads: “A failure by any party to object promptly to any non-compliance with these Rules or with any requirement of the arbitration agreement shall be deemed to be a waiver of the right of such party to make such an objection, unless such party can show that, under the circumstances, its failure to object was justified.”. Setiakon asserted that Bellworth and the Director of AIAC did not raise any the objection promptly after the Arbitrator submitted the Draft Final Award to the latter. Bellworth allowed the technical review to proceed, and the Final Award was thereafter signed and delivered. After realising that the Final Award was not in its favour, Bellworth then filed O.S. No. 41 to set aside the Award. Bellworth’s conduct gives rise to a waiver of its right to make this objection. With regards to Bellworth’s reliance on the case of Ken Grouting (supra) to support its argument that there could be no waiver on the part of the parties with respect to the cessation of the Arbitrator’s mandate and jurisdiction, Mr. Lam Wai Loon highlighted that there are fundamental differences between the facts of this case and that of Ken Grouting viz. –

in Ken Grouting, the applicable arbitration rule was Article 21.3 of the PAM Arbitration Rules on the delivery of award whereby the requirements under that Article and Rule 12 of the AIAC Rules are different;

(ii) Article 21.3 of the PAM Arbitration Rules requires the arbitrator to deliver his final award to the parties not later than three months from receipt of the last closing statement from the parties, unless extended. Once the arbitrator delivers his final award, he is functus officio, except for some limited matters related to the Award issued by him, for example, Article 22 on interpretation of the award, Article 23 on correction of the award and Article 24 on additional award on matters omitted from the Final Award. In contrast, under Rule 12(1) and 12(2) of the AIAC Rules (2018 Edition), the Arbitrator was only required to submit his Draft Final Award, not a Final Award, and to the Director of AIAC, not to the parties. The Final Award could only be delivered after the Director of AIAC has completed the technical review. Rule 12(2) contemplates that the Arbitrator’s mandate continues until the delivery of a Final Award after technical review is done;

(iii) the excerpt from Law and Practice of International Commercial Arbitration by Alan Redfern which was relied upon by the Court of Appeal in Ken Grouting concerned the time limit applicable to the delivery of a final award to the parties by the arbitral tribunal. It is not applicable to the present case where Rule 12 of the AIAC Rules concerned only the Arbitrator’s obligation to deliver his Draft Final Award to the Director of AIAC without copying the same to the parties. The timeline for delivery of a Draft Final Award as opposed to a final award under Article 21.3 of the PAM Arbitration Rules does not go to the Arbitrator’s mandate and jurisdiction;

(iv) Bellworth could have raised an objection when it knew that the Arbitrator submitted his Draft Final Award out of time, but it failed to do so and continued to let the technical review to proceed, and the Arbitrator to render his Final Award to the parties. Bellworth’s failure in raising any objection to the Draft Final Award at the material time before the delivery of the Final Award constituted a waiver of its right to subsequently object to the validity of the Final Award. Article 32 of the UNCITRAL Arbitration Rules is applicable in this case; and

the Court of Appeal in Ken Grouting took the view that the arbitrator in that case could have applied for EoT from the court under s 46 AA 2005, which only applies to an award, and not a draft award. In any event, by proceeding with the technical review of the Draft Final Award, the Director of AIAC had tacitly or by conduct extended the time limit under Rule 12(3) AIAC Rules, where there is no requirement for the EoT to be expressed in writing.

Argument No. 4 Even if the ground in subparagraph 37(1)(a)(vi) AA 2005 is established, the circumstances of the case do not warrant the exercise of the Court’s discretion in setting aside the Award. Setiakon relied on the case authorities of Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd and another appeal [2018] 4 MLJ 799 at paragraph 19c, The Government of India v Vedanta Ltd (legal successor to Cairn India Ltd) & Anor [2018] MLJU 630 at paragraph 66, Pancaran Prima Sdn Bhd Iswarabena Sdn Bhd and another appeal [2021] 1 MLJ 1 at paragraph 138 and Sigur Ros (supra, at paragraph 63) for the proposition that, even if Bellworth has established its case under subparagraph 37(1)(a)(vi) AA 2005, the Court retains a discretion on whether to set aside the Award or otherwise. Setiakon submitted that the circumstances in this case do not justify the setting aside of the Award because –

the complaint here centered on the alleged non-compliance with the time limit imposed by Rule 12(2) AIAC Rules and it is a question of interpretation;

(ii) the Arbitrator believed that he had submitted his Draft Final Award within time. Whether or not the deadline ought to have set in a day earlier would not have any effect on the outcome of the Final Award;

(iii) the Director of AIAC and Bellworth did not raise any objection to the alleged non-compliance when the Arbitrator submitted his Draft Final Award to the Director AIAC;

(iv) grave injustice would be caused to Setiakon if the Award is to be set aside in these circumstances, which was due to no fault on the part of Setiakon; and

costs of rehearing of the arbitration would be high. Based on the costs submission by the parties, the combined arbitration costs expended was approximately RM2 million. The arbitration had also taken almost four years to complete and it would probably take around the same time, if not more, if the case is to be re-heard. [50] I have considered the submissions of the parties and in my view, Rule 12(2) AIAC Rules clearly provides that the arbitral tribunal shall submit the Draft Final Award to the Director of AIAC within three months for a technical review and that the period of three months shall start to run from the date when the arbitral tribunal declares the proceedings closed pursuant to Rule 12(1). [51] Here, the Arbitrator declared the proceedings closed as of 19.1.2023 (see his letter to the parties and copied to AIAC dated 28.2.2023). Therefore, the time limit of three months shall start to run from 19.1.2023. In computing the period of three months from 19.1.2023, the Arbitrator was required to submit the Draft Final Award to the Director of AIAC on 18.1.2023 (the case of Migotti v Colvill (supra) applied). [52] The Court is unable to agree with Setiakon’s submission that the three months period shall run from 28.2.2023, the date of the Arbitrator’s letter, and that Article 2.6 of the UNCITRAL Arbitration Rules or ss 2, 3 and 105 of Act 388 apply in the instant case. The AIAC Rules have not been published in the Gazette and are thus, not “subsidiary legislation” within the meaning of Act 388 (see sub-s 86(1) Act 388). [53] In my view, the express words in Rule 12(2) AIAC Rules are clear and it will be contrary to these express words if Setiakon’s submission on Article 2.6 of the UNCITRAL Arbitration Rules or Argument No. 2 is accepted. [54] Nevertheless, I am persuaded by Setiakon’s Argument Nos. 3 and 4, among others, that –

there are fundamental differences between the facts in the instant case and in Ken Grouting (supra) where Rules 12(1) and 12(2) of the AIAC Rules govern the submission of the Arbitrator’s Draft Final Award to the Director of AIAC for technical review and not the delivery of the Final Award to the parties. The timeline for delivery of the Draft Final Award as opposed to a Final Award under Article 21.3 of the PAM Arbitration Rules does not go to the Arbitrator’s mandate and jurisdiction; and

even if Bellworth has established a case under subparagraph 37(1)(a)(vi) AA 2005, the Court is inclined to exercise its discretion in not setting aside the Award for the reasons as submitted by Setiakon. Moreover, the delay in this case is merely one day. [55] However, I am not convinced of Setiakon’s submission under Argument No. 3 that by proceeding with the technical review of the Draft Final Award, the Director of AIAC had tacitly or by conduct extended the time limit under Rule 12(3) AIAC Rules. This is because Rule 12(3) AIAC Rules clearly provides that the time limit may be extended by the Arbitral Tribunal with the consent of the parties and upon consultation with the Director. It is only in the situation where there is no consent by the parties that the Director may further extend the time limit if deemed necessary. I am not prepared to say that Rule 12(3) AIAC Rules goes so far as allowing an EoT to be implied by the conduct of the Director of AIAC. 2nd Ground: Whether the Award should be set aside under subparagraphs 37(1)(a)(iv) and (v) AA 2005 as the Arbitrator introduced and decided on a new difference i.e. the validity of the CNC and Bellworth’s entitlement to impose LD as a stand-alone issue independent of Setiakon’s applications for EoT 3rd Ground: Whether the Award should be set aside on the ground that Bellworth was unable to present its case; the arbitral procedure was not in accordance with the agreement of the parties; and the Award is in conflict with the public policy of Malaysia as a breach of the rules of natural justice occurred in connection with the making of the Award under subparagraphs 37(1)(a)(iii) and (vi) and 37(1)(b)(ii) read together with 37(2)(b)(ii) AA 2005 [56] The foundation for the 2nd and 3rd Grounds as advanced by Bellworth is premised on the Arbitrator having determined the issue of the validity of the CNC, independent from Setiakon’s entitlement to additional EoT and this constitutes a “new difference” i.e. a new dispute which was not contemplated by, or not falling within the terms of submission. Thus, both these Grounds will be addressed together as the main question is whether there is a “new difference”. [57] Bellworth submitted the elements which it must establish in order to succeed in its application pursuant to subparagraphs 37(1)(a)(iv) and

AA 2005 viz. –

the matters which are within the scope of the submission to arbitration;

the Award deals with a “new difference” not within the scope of reference;

the “new difference” has a material impact on the final outcome of the Award; and

whether part of the Award which is affected by the “new difference” may be severed from the other parts of the Award to warrant only the part affected to be set aside under sub-s 37(3) AA 2005. [58] In respect of the 2nd Ground, Bellworth cited the case authorities of Sigur Ros Sdn Bhd v Master Mulia Sdn Bhd [2018] 3 MLJ 608 (CA) and PT Prima International Development v Kempinski Hotels SA and other appeals [2012] SGCA 35 to support its submission that Setiakon is bound by its pleadings. The pleadings define what had been referred to arbitration under Clause 34.5 of the PAM Contract and this in turn, defines the jurisdiction of the Tribunal. [59] Bellworth referred to Setiakon’s pleadings and written submissions in the arbitration proceedings as follows in taking the position that Setiakon’s challenge to the validity of the CNC and Bellworth’s entitlement to impose LD was inextricably linked to Setiakon’s entitlement to additional EoT:

paragraphs 23 - 25, 27, 167 and 168 of the Statement of Case;

paragraphs 11, 22, 23(ii) and 27(i) of the Statement of Reply;

paragraphs 26, 27, 72 and 292 of the Written Closing

paragraph 158 of the Closing Reply Submission. Bellworth asserted that, in the event Setiakon was successful in establishing its entitlement to additional EoT, it would have the effect of dislodging the CNC and thereby disentitling Bellworth from imposing LD. [60] For purposes of determining the 2nd Ground to the 4th Ground, the first two broad issues which were agreed to by the parties in the arbitration are relevant, namely –

whether Setiakon is entitled to EoT up to 15.3.2019 or any EoT, if at all (the Tribunals’s findings/ analysis are at paragraphs 80 - 121 of the Award); and

(ii) whether Bellworth or the Architect was entitled to impose LD in the sum of RM11,452,910.00 on Setiakon pursuant to Clause 22.1 of the PAM Contract or any other amount as LD, if at all (the Tribunals’s findings/ analysis are at paragraphs 127 - 149 of the Award). [61] It is also relevant to note at this juncture the provisions of Clauses 22.1 and 23.1 of the PAM Contract as follows: “22.0 Damages For Non-Completion

22.1 If the Contractor fails to complete the Works by the Completion Date, and the Architect is of the opinion that the same ought reasonably so to have been completed, the Architect shall issue a Certificate of Non-Completion. Upon the issuance of the Certificate of Non-Completion, the Contractor shall pay or allow to the Employer a sum calculated at the rate stated in the Appendix as Liquidated Damages for the period from the Completion Date to the date of Practical Completion. The Employer may recover such sum as a debt or may deduct such sum from any monies due or to become due to the Contractor under the Contract or the Employer may recover such sum from the Performance Bond. The Employer shall inform the Contractor in writing of such deduction or such debt due from the Contractor. The imposition of Liquidated Damages by the Employer shall not be taken into account by the Architect in the issuance of payment certificate and Final Certificate, and is not subject to the set-off procedures under Clause 30.4 and adjudication. …” “23.0 Extension Of Time

23.1 If the Contractor fails to complete the Works is or will be delayed beyond the Completion Date by any of the Relevant Events stated in Clause 23.8, he may apply for an extension of time provided always that:

23.1(a) the Contractor shall give written notice to the Architect his intention to claim for such extension of time together with an initial estimate of the extension of time he may require supported with all particulars of the cause of delay. Such notice must be given within twenty-eight (28) Days from the date of the Al, CAI or the commencement of the Relevant Event, whichever is earlier. The giving of such written notice shall be a condition precedent to an entitlement of extension of time; and

23.1(b) within twenty-eight (28) Days of the end of the cause of delay, the Contractor shall send to the Architect his final claim for extension of time duly supported with all particulars to enable the Architect to assess any extension of time to be granted. If the Contractor fails to submit such particulars within the stated time (or within such longer period as may be agreed in writing by the Architect), it shall be deemed that the Contractor has assessed that such Relevant Event will not delay the completion of the Works beyond the Completion Date. …

23.3 If the Architect is of the opinion that the particulars submitted by the Contractor are insufficient to enable him to decide on the application for extension of time, the Architect shall within twenty eight (28) Days from receipt of the Contractor's particulars under Clause 23.1(b), inform him of any deficiency in this submission and may require the Contractor to provide such further particulars within a further twenty eight (28) Days or within such period of time as may be stated by the Architect in writing.”. [62] In the Award, the Arbitrator decided, among others, as follows:

in relation to Agreed Issue No. 1, the Arbitrator answered it in the negative because Setiakon failed to comply with Clause 23.1 of the PAM Contract in respect of its application under EoT Nos. to 3, EoT No. 2 Appeal and EoT No. 3 Appeal;

in order to invoke Clause 22.1 of the PAM Contract, Setiakon must be shown to have failed to complete the Works by the Completion Date and the Architect must form an opinion that the Works ought reasonably to have been completed. However, the Architect’s letter dated 19.6.2015 recorded the fact that Setiakon’s submission was incomplete and inadequate and Setiakon was given 28 days to provide further particulars. By granting time to Setiakon to revert, the Architect could not have formed the view that Setiakon had failed to complete the Works by the Completion Date or that the Works ought to be completed by the Completion Date. The Architect was still considering the application for EoT No. 3 at the time when the CNC was issued. The Architect could not have issued the CNC without allowing Setiakon the full 28 days, expiring on 17.7.2015, to revert on the information or particulars requested by the Architect;

there is nothing in Clause 22.1 of the PAM Contract suggesting that the CNC must be dutifully issued by the Architect the day after the extended Completion Date of 6.7.2015; and

the CNC was wrongfully issued by the Architect and given that the issuance of the CNC is a condition precedent to the imposition of LD, the imposition and deduction of LD by Bellworth is wrongful. [63] Mr. N. Nahendran vehemently submitted for Bellworth that, since the Arbitrator had found that Setiakon was not entitled to further time, it follows that the Revised Completion Date of 6.7.2015 was correct and therefore, the CNC was properly issued on 7.7.2015. The Tribunal cannot redefine the issues submitted by parties (see Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 6 MLJ 126). [64] The learned counsel emphasised that Setiakon’s claims relating to the issues of EoT, CNC and LD in the arbitration were pleaded as being inter-related. Setiakon pleaded that, in issuing the CNC, the Architect was not anticipating a response from it with regards to the application for EoT No. 3. Once the Arbitrator found that Setiakon was not entitled to any EoT, there was no further factual basis to challenge the CNC. [65] However, the Arbitrator challenged the Architect’s opinion on his own accord and dealt with it independently of his rejection of the application for EoT No. 3. Therefore, the Arbitrator exceeded his jurisdiction or widened the scope of the dispute and this had affected the outcome of the arbitration. [66] Bellworth additionally submitted that –

Setiakon did not make any application to the Arbitrator to revise his opinion pursuant to the powers given under Clause 34.8 of the PAM Contract; and

the part of the Award affected by the new difference i.e. paragraphs 122 - 149, Section 9.0 can be severed from the rest of the Award under sub-s 37(3) AA 2005. [67] In respect of the 3rd Ground, Bellworth contended that –

Setiakon’s challenge to the validity of the CNC was never grounded on disputing the Architect’s opinion, but only on the purported failure by the Architect to fairly and properly assess and grant EoT;

it could not address the “new difference” because it was never brought to the attention of the parties. Even when the Tribunal sought further clarification from the parties on 27.10.2022, the “new difference” was not highlighted to the parties. Bellworth was deprived of the opportunity to address the issue of whether the CNC could be challenged on grounds other than EoT. Had Bellworth been made aware of the “new difference”, it would have addressed the same and could have led evidence for an alternative case for damages. There is a breach of the rules of natural justice where the Tribunal re-defines an issue without giving the parties an opportunity to present their responses [see Master Mulia (supra)];

at paragraph 135 of the Award, the Arbitrator said that he found it “difficult … to follow the submissions” of Bellworth that the Architect had rightly administered the PAM Contract. There is an admission by the Arbitrator that he did not understand the arguments put forward. There was thus a failure by the Arbitrator to apply his mind to the arguments canvassed before him (see Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80, TMM Division Maritima SA de CV v Pacific Richfield Marine [2013] SGHC 186 and UDA Land Sdn Bhd v Puncak Sepakat Sdn Bhd [2020] 1 LNS 877); and

the introduction of the “new difference” shocks the conscience and is offensive to the fully informed member of the public as held in Jan De Nul (supra). In deciding based on the “new difference”, the Tribunal had breached the fair hearing principle (see BZW v BZV [2022] SGCA 1) and the principle of equal treatment of parties as provided under s 20 AA 2005 (see too, Rule 17 of the AIAC Rules). The legal principles in Ahmani Sdn Bhd v Petronas Penapisan (Melaka) Sdn Bhd [2015] 11 MLJ 32, MMC Engineering Group Bhd & Anor v Wayss & Freytag (Malaysia) Sdn Bhd & Anor [2015] 1 LNS 705, Cobrain Holdings Sdn Bhd v Kasugi Prima Sdn Bhd and another case [2023] MLJU 1794, Soh Beng Tee (supra), Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 and OAO Northern Shipping Co v Remolcadores de Marin SLp, The Remmar [2007] EWHC 1821 (Comm) are also applicable. [68] I have scrutinised the parties’ pleadings and submissions in the arbitration proceedings and find that the Award did not involve any matter which came within the meaning of a “new difference” which is irrelevant to the issues requiring determination by the Tribunal. The following are my justifications for this finding:

Apart from perusing the pleadings by the parties in the arbitration proceedings, I also had the benefit of the “Relevant Extract To Show That The Invalidity Of CNC Has Been Pleaded” which was prepared by Mr. Lam Wai Loon and his competent associates (encl. 160). Based on these relevant extracts, the issue of the validity of the CNC was expressly and specifically pleaded in Setiakon’s Statement of Case (see for example, paragraph 160) and Statement of Reply (see for example, paragraphs 54 and 55) and was included in Setiakon’s Closing Submission (see for example, paragraph 64) and Closing Reply Submission where in paragraph 65, it was contended that: “Without prejudice to the above, the Claimant again highlights that whilst the Architect had, in his letter dated 19.6.2015, gave the Claimant 28 days to submit all particulars to justify the Claimant’s EOT No. 3 Application (i.e. by 17.7.2015), the Architect nevertheless proceeded to issue the CNC on 7.7.2015, which was before the 28 days period had lapsed. It is clear from this that the Architect had no intention to even assess the Claimant’s EOT No. 3 Application. It appears as though the Architect was not anticipating any response from the Claimant.”. Bellworth itself had pleaded accordingly in response to Setiakon’s statements. The issue of the validity of CNC was linked to the application for EoT No. 3 by Setiakon to the Architect. The facts as to the application for EoT No. 3; that the Architect had failed to assess Setiakon’s applications for EoT, including EoT No. 3; that the Architect had failed to assess all applications for EoT and therefore this rendered the CNC invalid were all pleaded (see for example, paragraphs 23, 24, 159 and 160 of the Statement of Case).

The allegation of non-pleading was raised by Bellworth in its written submissions and this was addressed by the Arbitrator in the following part of the Award: “(129) On the facts, the Claimant contends that the Architect's letter of 19.6.2015 had given the Claimant a 28 days period to submit all information or particulars to justify the Claimant's EOT No. 3 Application. Even before the 28 days period had lapsed, which would have been on 17.7.2015, the Architect had proceeded to issue the CNC on 7.7.2015. According to the Claimant, this was not disputed by the Architect who confirmed that she knew that the Claimant's EOT was pending when the CNC was issued. It was therefore clear, according to the Claimant that the Respondent was not anticipating a response from the Claimant and had acted in breach of Clause 23.3 of the PAM Contract, having given the Claimant 28 days to respond.

The Respondent on the other hand first raises the objection that this contention of the Claimant is not a pleaded position of the Claimant and that on this basis alone, the Tribunal ought not to entertain this challenge by the Claimant at the closing stage of the proceedings.

The Tribunal finds that this assertion of the Claimant's position not being pleaded as being without merit. On the contrary, the Claimant has adequately pleaded the facts pertaining to the 19.6.2015 letter by the Architect, and the fact that the Architect failed to consider and assess EOT No. 3 and instead proceeded to issue CNC on 7.7.2015. This is found at paragraphs 159 and 160 of the SOC. In its final relief, the Claimant seeks a declaration that the CNC is invalid (paragraph 210(i)), a declaration that the Respondent is not entitled to pursue any claims and / or set off the Claimant for liquidated damages (paragraph 210(iii)), and seeks an order that the sum of RM11,452,910.00 which was wrongly deducted by the Respondent as liquidated damages to be returned and paid to the Claimant (paragraph 210(iv)).

The Tribunal therefore does not see how the Respondent's objection of a non-pleaded case can stand.”.

Setiakon had sought for specific relief by way of a declaration that the CNC is invalid and that Bellworth is not entitled to pursue any claims or set off against Setiakon for LD. The issues concerning the validity of the CNC and imposition of LD formed part of the Agreed Issues. Undoubtedly, these issues fell within the scope of submission to the Arbitrator. The Arbitrator decided that the CNC is invalid. This decision is well within the jurisdiction conferred upon him.

The arbitration agreement contained in the PAM Contract conferred various powers upon the Arbitrator, including the power “to open up, review and revise any certificate, opinion, decision, requirement or notice” [see Clause 34.8(d)]. The words “any certificate” includes the CNC. In reviewing the CNC, the Arbitrator has the power to determine whether the Architect had complied with the due process under Clause 22.1 of the PAM Contract before issuing the CNC. The Arbitrator found that the Architect had failed to undertake this process and therefore the Architect could not have formed the required opinion. This is a finding of fact and law by the Arbitrator before he held that the CNC is invalid. The relevant excerpt from the Award is re-produced below: “(137)Having considered the Architect’s letter of 19.6.2015, not only recording the fact that the Claimant’s submission was incomplete and inadequate, but invoking Clause 23.3 of the PAM Contract, having also formed the opinion that the particulars submitted by the Claimant was insufficient and providing the Claimant with 28 days to provide such further particulars, it cannot be said that the Architect could form the view that the Claimant had failed to complete the Works by the Completion Date or form an opinion that such Works ought to be completed by the Completion Date.

By granting the Claimant time to revert with further particulars, it must be the case that the architect was still considering EOT No. 3 at the time when CNC was issued. The Architect could not have issued the CNC without allowing the Claimant the full 28 days, expiring on 17.7.2015, to revert on the information or particulars requested by the Architect.

The fact the Claimant ultimately had not responded or responded a whole year later or the fact that the Claimant’s EOT No. 3 was abandoned as contended by the Respondent are arguments in hindsight. At the relevant time, it is not disputed that the Architect had accorded the Claimant the opportunity to revert on EOT No. 3.

The Respondent’s argument that the Architect could very well have later issued a CNC if EOT No. 3 was validly considered is equally a strained argument. The Respondent's reliance on Clause 22.3 of the PAM Contract is misplaced. Clause 22.3 of the PAM Contract only applies where the Architect extends time, which has the effect of revoking the CNC issued.

Without fully considering the extension of time and issuing the CNC in the interim, the Architect cannot rely on Clause 22.3 of the PAM Contract to justify her actions. There is also nothing in Clause 22.1 of the PAM Contract, suggesting that the CNC must be dutifully issued by the Architect the day after the extended Completion Date of 6.7.2015. This does not excuse the Architect in issuing the CNC whilst still considering EOT No.

3.

Further and on the evidence adduced, the Tribunal cannot come to a conclusion that the Architect had addressed her mind and formed an opinion that the Claimant ought to have reasonably completed the Works by the Completion Date or that the Claimant had failed to complete the Works. The Architect's grant of additional time to the Claimant to revert on EOT No. 3 negates such contention, if any.

As such, the Tribunal finds that the CNC was wrongfully issued by the Architect. Given that the issuance of the CNC is a condition precedent to the imposition of liquidated damages, the imposition and deduction of liquidated damages by the Respondent is wrongful.

In as much as the Claimant had failed to comply with contractual provisions on extension of time, which the Respondent contends that the Claimant cannot take advantage of, the same principles apply to the Respondent in respect to the imposition of liquidated damages.

The Tribunal accepts the Claimant's reliance on the decision of the Court of Appeal in Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113 that the CNC was invalid because the architect had not properly assessed the appellant's request for extension of time and that the architect could not therefore knows the precise completion time. By reason of the Tribunal's findings that the Respondent was not entitled to impose liquidated damages, the Tribunal need not concerned itself with the other disputes regarding the amount of the liquidated damages deducted was wrongly calculated.”.

The Arbitrator took the view that the CNC is invalid because the Architect could not have formed the required opinion under Clause 22.1 of the PAM Contract due to the Architect’s failure to consider or assess the application for EoT No. 3 despite the fact that she had invoked Clause 23.3 of the PAM Contract to ask Setiakon to provide further particulars. It is fallacious for Bellworth to now contend that Setiakon’s plea for invalidity of the CNC was that it must be inextricably linked to, and dependent only on, Setiakon’s entitlement to additional EoT. The finding of the invalidity was due to the Architect’s failure to consider or assess the application for EoT No. 3, which was pleaded. There is no “new difference” as alleged by Bellworth.

Bellworth’s complaint about the “new difference” was, in essence, that the Arbitrator had decided the issue of validity of the CNC independently of Setiakon’s entitlement to EoT, which Bellworth contends the Arbitrator should not have. I agree with Setiakon’s submission that this grievance goes to the manner in which the Arbitrator had reached his decision and that Bellworth is essentially questioning the soundness of his decision. This is not a matter concerning jurisdiction, but touches on the merits or findings made by the Arbitrator. [69] With regards to Bellworth’s other claims in relation to the 3rd Ground, apart from the point on a “new difference”, judging from the pleadings, submissions and the conduct of the arbitration proceedings as a whole, I am satisfied that both parties were given a fair opportunity to present their respective case and they have submitted on the issues in dispute at length. [70] The Arbitrator had deliberated on the Agreed Issues, including on the validity of the CNC, based on the parties’ pleaded case and submissions. His findings and decision in the Award are not in conflict with any public policy and do not breach any rule of natural justice. Bellworth has simply not fulfilled the requirements as laid down in Jan De Nul (supra) and Master Mulia (supra) and proven, on a balance of probabilities, that the Award should be set aside under the provisions of the AA as it had cited. [71] Since the foundation for the 2nd and 3rd Grounds as advanced by Bellworth is premised on a “new difference”, and upon the finding of the Court that Bellworth has not established there is a “new difference”, both these Grounds of challenge must fail. 4th Ground: Whether the Award should be set aside pursuant to subparagraphs 37(1)(b)(ii) read with 37(2)(b)(ii) AA 2005 due to inconsistent or defective chain of reasoning [72] In the arbitration, Setiakon claimed, among others, that it is entitled to further EoT, and that the CNC issued is invalid. On the converse, Bellworth took the position that in view of Setiakon’s failure to complete the Works within the Revised Completion Date, Bellworth is contractually entitled to impose LD pursuant to Clause 22.1 of the PAM Contract. [73] Among the issues which the Arbitrator had to decide were whether Setiakon is entitled to further EoT, the CNC is valid and Bellworth is contractually entitled to impose LD. [74] Bellworth contended that there is no dispute that Setiakon was in delay in completing the Works and that the applications for EoT submitted by Setiakon were all found to be invalid for failure to comply with the condition precedent under Clause 23.1 of the PAM Contract. [75] Having on the one hand found that all of Setiakon’s EoT applications, including EoT No. 3, were invalid and that Setiakon was not entitled to any further time, the Tribunal then revived EoT 3 when considering the validity of the CNC to find that the Architect could not have formed her opinion that Works ought to have been completed by 6.7.2015. Bellworth argued that it was illogical to revive EoT No. 3 to justify a conclusion that the CNC was wrongfully issued on 7.7.2015. The Arbitrator concluded that Bellworth was not entitled to impose LD on Setiakon despite the fact that Setiakon did not complete the Works by the Revised Completion Date of 6.7.2015. The Works were only completed on 15.3.2016. [76] The Arbitrator’s reasoning and conclusion are said to be inconsistent or defective for the following reasons:

It was illogical to state that the Architect was wrong to issue the CNC on 7.7.2015 due to EoT No. 3 being pending assessment, when he had already held that EoT No. 3 is invalid. Therefore, it follows that EoT No. 3 no longer existed and as such, the Arbitrator should not have disturbed the CNC.

The Tribunal disregarded relevant terms of the PAM Contract, especially Clauses 22.3, 23 and 34.8, and this caused severe injustice to Bellworth as it was completely deprived of LD. Even if the CNC was invalidly issued on 7.7.2015, the Arbitrator has power under Clause 34.8(d) and (e) of the PAM Contract and could have exercised it to revise the issuance of the CNC to 18.7.2015, the day following the expiry of the 28 days given to Setiakon to revert with further particulars. Had the Arbitrator done so, the amount of LD on Setiakon would not have changed LD would still be calculated from the day after the Revised Completion Date (7.7.2015) and not the date of the CNC. [77] Bellworth submitted the following cases on the relevant principles in reading an arbitral award:

Transgrid Ventures Sdn Bhd v Colas Rail System Engineering Sdn Bhd (now known as CRSE Sdn Bhd) and other cases [2022] MLJU 3049 (HC) – an arbitral award must be read in its entirety and not in isolation.

Ahmani (supra) – since the award must be read in its entirety, the whole reasoning of the tribunal must bear a measure of consistency.

BZW v BZV [2022] SGCA 1 where the Singapore Court of Appeal found that the award was manifestly incoherent. A tribunal’s chain of reasoning must be one for which the parties had reasonable notice and had sufficient nexus to the parties’ arguments.

BZV v BZW and another [2021] SGHC 60 where the Singapore High Court held that the fair hearing principle was breached where the tribunal adopts a defective chain of reasoning and by failing to apply its mind to essential issues arising from the parties’ arguments. [78] After giving utmost consideration to the affidavit evidence and submissions by the parties, I found that there is no inconsistency or defect in the Arbitrator’s reasonings. My reasons are as follows:

The Arbitrator considered the competing positions of the parties and found that –

Setiakon had failed to comply with the condition precedent under Clause 23.1 of the PAM Contract and hence, is not entitled to the EoT claimed under EoT Application No. 3;

(ii) on the imposition of LD, there is a requirement for Bellworth to first issue a valid CNC in order to impose LD on Setiakon;

(iii) the CNC is invalid as the Architect has yet to form an opinion that Setiakon ought to have reasonably completed the works by the Revised Completion Date or that Setiakon had failed to complete the work by the Revised Completion Date at the time when the CNC was issued. This was so because the Architect had, on 19.6.2015, provided Setiakon an opportunity to submit further particulars within 28 days; and

(iv) without a valid CNC, the LD imposed by Bellworth is wrong and without basis as Bellworth failed to comply with the contractual requirement under Clause 22.1 of the PAM Contract.

The Arbitrator was consistent in his approach in requiring compliance with the condition precedent in Clause 23.1 of the PAM Contract for the EoT Application, and Clause 22 of the PAM Contract for the issuance of the CNC by the Architect (see paragraphs 141 - 145 of the Award as quoted previously).

Contrary to Bellworth’s submission, the issue of the validity of the CNC is not necessarily only dependent on Setiakon’s actual entitlement to additional EoT. The Architect could have undertaken the process of considering EoT No. 3, including its validity, and then formed the required opinion that Setiakon had failed to complete the Works by the required Completion Date and went on to issue a CNC. However, this process was not properly undertaken by the Architect. It was this failure to assess the EoT Application which rendered the CNC invalid, and this has nothing to do with whether Setiakon was entitled to additional EOT. Since LD cannot be imposed by the employer unless Clause 22.1 PAM Contract is strictly complied with, there is no inconsistency or defect in the Arbitrator’s chain of reasoning.

An illogical or inconsistent decision on the part of an arbitrator is not a ground to set aside the award (see Sanlaiman Sdn Bhd v Kerajaan Malaysia [2013] 3 MLJ 755) and an award would not be set aside simply because it was irrational or unreasonable or one that is so irrational or unreasonable that no reasonable person could have made such an award [see Kris Heavy Engineering (supra)]. [79] Even if there are inconsistent findings or reasonings by the Arbitrator in the Final Award, the Arbitrator has made a conscious and informed decision on the issue of CNC. Bellworth may disagree with the Arbitrator’s findings and conclusion, but the allegation of inconsistent or illogical chain of reasoning alone, without proof of any elements of breach of the rules of natural justice as expounded in Jan De Nul (supra) and Master Mulia (supra), cannot justify the setting aside of the Final Award under subparagraphs 37(1)(b)(ii) and 37(2)(b)(ii) of AA

- Whether this is an appropriate case to make an order under sub-s 37(6) AA 2005 [80] Sub-s 37(6) AA 2005 provides that: “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.”. [81] On the date which was initially fixed for decision, I sought clarification from the learned counsels on the applicability of sub-s 37(6) AA 2005. This was prompted by Bellworth’s Submission dated 17.11.2023 (encl. 140) wherein it was submitted that – “94. Finally, even if the Learned Arbitrator was of the view that the CNC was wrongfully issued as EOT No. 3 was still pending assessment, the Learned Arbitrator could simply revise the CNC to 18.7.2015 being the date after the expiry of the twenty-eight (28) days granted to Setiakon to revert with further particulars.

94.1 Instead, the Learned Arbitrator decided that the CNC was wrongfully issued and therefore Bellworth was not entitled to impose LD on Setiakon.

94.2 This is despite the indisputable fact that Setiakon failed to complete the Works by the Revised Completion Date.”. [82] The learned counsels were directed to carry out further research and this was conducted in a diligent and comprehensive manner to which the Court records its gratitude. [83] Bellworth submitted that in a usual case, the arbitral proceedings terminate upon the issuance of a final award by the Tribunal and the mandate of the Tribunal also terminates at that point. The Tribunal becomes functus officio upon issuance of a final Award. However, sub-s 34(1) and (3) AA 2005 provide as follows: “(1) The arbitral proceedings shall be terminated by a final award or by an order of the arbitral tribunal in accordance with subsection (2) …

Subject to the provisions of section 35 and subsection 37(6), the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.”. [84] Sub-s 37(6) was adopted from Article 34(4) of the UNCITRAL Model Law on International Commercial Arbitration (‘Model Law’). The intent of Article 34(4) can be gleaned from the travaux préparatoires of the Model Law which state: “Paragraph (4) envisages a procedure which is similar to the ‘remission’ known in most common law jurisdictions, although in various forms. Although the procedure is not known in all legal systems, it should prove useful in that it enables the arbitral tribunal to cure a certain defect and, thereby, save the award from being set aside by the Court. Unlike in some common law jurisdictions, the procedure is not conceived as a separate remedy but placed in the framework of setting aside proceedings. The Court, where appropriate and so requested by a party, would invite the arbitral tribunal, whose continuing mandate is thereby confirmed, to take appropriate measures for eliminating a certain remediable defect which constitutes grounds for setting aside under paragraph (2). Only if such ‘remission’ turns out to be futile at the end of the period of time determined by the Court, during which recognition and enforcement may be suspended under article 36(2), would the Court resume setting aside proceedings and set aside the award.”. [85] The power to remit the Award is an alternative to the setting aside of the Award by the Court. It was tabled as “a useful device for curing procedural defects without having to set aside the award.” (see the Report of the Working Group on International Contract Practices during its Seventh Session, UN Doc A/CN.9/246 at paragraph 139) and enables the Tribunal to “repair the default and avoid the ultimum remedium of setting aside.” (see Justice Indu Malhotra, Commentary on the Law of Arbitration, Volume 2, 4th Edition, Law & Justice Publishing Co at p 968). [86] Bellworth referred to the Singapore cases of AKN No. 1 [2015] 3 SLR 488, AKN and another v ALC and others and other appeals [2015] SGCA 63 and BZV v BZW and another [2021] SGHC 60 for several propositions; that the court has no power to remit an award after it has been set aside; remission is a curative option that is available to the court in certain circumstances where it considers that it may be possible to avoid setting aside the award; the power to remit cannot be exercised unless a plaintiff has succeeded in establishing the grounds for setting aside an award; and the purpose of remission is to afford the party who has established a ground for setting aside a genuine opportunity, after the tribunal has eliminated the grounds for setting aside, to persuade the tribunal to arrive at a different result. [87] Mr. N. Nahendran further submitted for Bellworth that sub-s 37(6) AA 2005 does not prescribe any express limitations on what issues can be remitted to the Tribunal for its reconsideration, other than that it must be for the Tribunal to take such action so as to eliminate the grounds for setting aside. [88] The learned counsel acknowledged that for the Court to exercise its discretion under sub-s 37(6) AA 2005, there must first be a request by either party to do so. In this regard, through its written submission filed on 14.6.2024 (encl. 168), Bellworth formally requested that the Court exercises its discretion under sub-s 37(6) AA 2005. [89] According to the learned counsel, there are no Malaysian cases that provide guidance as to when it is appropriate for the Court to exercise its discretion to remit the Award to the Tribunal under sub-s 37(6) AA

Based on the decisions in BZW and another v BZV [2022] SGCA 1 and Secretary of State for the Home Department v Raytheon Systems Ltd [2015] EWHC 311 (TCC), in exercising the discretion to remit the Award for reconsideration, the Court must consider –

the entire factual background and circumstances of the case, the cost of remission as against the cost of a new Tribunal re-hearing the dispute after the Award is set aside, the passage of time taken or would take for re-hearing and the underlying interest of justice between the parties;

whether the issue to be remitted is a stand-alone and isolated issue which would justify remission, as opposed to an issue that is so interwoven with other aspects of the Award which would require the Tribunal to reconsider other issues in the proceedings; and

whether the Tribunal, judged objectively, would be subconsciously tempted to arrive at the same conclusion if the Award is remitted. [90] Furthermore, there are obvious instances where the power to remit under sub-s 37(6) AA 2005 will not be applicable, for example, –

where the defect in the Award is one that goes to the jurisdiction of the Tribunal. This is because the Award cannot be remitted to a Tribunal which does not have jurisdiction in the first place, or to a Tribunal which had exceeded its jurisdiction; and

where the defect relates to the breach of the rule against bias, or where the making of the Award was induced or affected by fraud or corruption (see Lovell Partnerships (Northern) Limited v A W Construction plc (1996) 81 BLR 83 and Dr P C Markanda, Naresh Markanda & Rajesh Markanda, Law Relating to Arbitration and Conciliation, 8th Edition, Lexis Nexis, 2013 at pp 1012 and 1013). [91] Where a defect is curable, sub-s 37(6) can apply, for example, where there was a breach of the rules of natural justice or a breach of public policy, or where the defect relates to a sole, stand-alone issue, which can be decided independently [see Soh Beng Tee (supra)]. [92] Bellworth then referred to several case authorities from Hong Kong and India, apart from the earlier cited Singaporean cases, such as A v B [2015] 5 HKC 509, G v N [2024] 2 HKC 510, BZW v BZV (supra), Dyna Technologies Private Limited v Crompton Greaves Limited (2019) 20 SCC 1, I-Pay Clearing Services Private Limited v ICICI Bank Limited

3 SCC 121, National Highways Authority of India v Trichy Thanjavur Expressway (2023) 304 DLT 357 to support its contention that the Singapore approach should be preferred. This means that remission can be ordered in respect of a single isolated issue and in reconsidering the issue, the Tribunal can be directed to receive further evidence. [93] It was argued that the reasoning in the Singapore Court of Appeal decision in BZW v BZV (supra) supports the remission of the Final Award in the instant case because the Arbitrator’s defect in reasoning involved the sole point of making the inconsistent and illogical finding that LD was rejected despite ruling that all applications for EoT were invalid and hence rejected, and then failing to apply Clause 38.4(d) and

of the PAM Contract to revise the CNC. This is a discrete, isolated and stand-alone issue that can readily be determined by the Arbitrator without affecting any other findings. In addition, no further evidence is necessary. [94] Bellworth prayed that part of the Award that relates to the issuance and validity of the CNC and the dismissal of LD be remitted to the Arbitrator on the terms as set out in the “Proposed Draft Annex A” to encl. 168 or with a direction to consider and give effect to Clause 34.8(d) and (e) of the PAM Contract. [95] Bellworth submitted that the procedure to be adopted by the Court when deciding to remit the Final Award is as follows:

The Court will identify the grounds for setting aside and then order that the setting aside proceedings be suspended for the Arbitrator to resume the arbitral proceedings or take such other action to eliminate the grounds for setting aside.

The Court must specify the period of time for which the setting aside proceedings will be suspended.

The Court, after consulting with the parties, must define the scope and terms of the matters to be remitted to the Arbitrator for reconsideration.

Upon conclusion of the time period for suspension of the setting aside proceedings or upon the Arbitrator having completed taking action to eliminate the grounds for setting aside, the Court will resume the hearing of the application for setting aside and determine whether the grounds for setting aside have been eliminated.

If the grounds have been eliminated, the application for setting aside will be dismissed with the necessary consequential orders made on the application to enforce the Award. If Bellworth succeeds after the remission, the original Award will have been replaced by a new Award and the original Award will not be enforced.

If the Arbitrator has not eliminated the grounds for setting aside, the Court may set aside the whole Award. The res judicata effect of the Award on matters not remitted and the findings of this Court will have to be determined by a new Tribunal if indeed a fresh arbitration is commenced. [96] By way of conclusion, Bellworth summarised the options as follows:

Remit the Award to the Arbitrator on the terms as set out in “Proposed Draft Annex A” or as agreed by the parties or settled by the Court. This approach is consistent with the preferred Singapore cases but inconsistent with the Indian cases.

Set aside the whole Award. This approach may result in a fresh arbitration before a new Tribunal. However, a fresh arbitration will not free Setiakon from the res judicata effect of the findings that all EoT applications have been dismissed by the Arbitrator and that the completion date was 6.7.2015 which were not challenged by Setiakon, and the reasoning and decision of this Court in setting aside the Award.

Set aside part of the Award relating to the finding of invalidity of the CNC and the order allowing Setiakon a refund of the LD imposed by Bellworth. This approach is consistent with the Singapore and Indian decisions which have ordered that part of an Award may be set aside even if the equivalent of subparagraph 37(1)(a)(v) and sub-s 37(3) AA 2005 are not engaged. It is also consistent with the UK decisions although in the UK, there is an express provision to allow setting aside part of an Award. This approach will however be inconsistent with Sigur Ros (supra) but it is possible to bring this matter within Sigur Ros if the Court is prepared to engage subparagraph 37(1)(a)(v) and sub-s 37(3) AA 2005 to set aside part of the Award on the basis that the Arbitrator has, by ignoring the provisions of Clause 34.8(d) and (e) of the PAM Contract, acted beyond the scope of the submission to arbitration because the scope of the submission under the PAM Contract specifically gave him the power and duty under Clause 34.8(d) and (e) to open up and revise any certificate, including the CNC, and determine all matters in dispute submitted to him in the same manner as if no certificate had been issued. Bellworth accepted that subparagraph 37(1)(a)(v) and sub-s 37(3) AA 2005 were not expressly referenced in the 4th Ground, but since this is a point of law, Bellworth submitted that it need not have been expressly stated. Alternatively, the 4th Ground can be treated as amended on Bellworth’s application or of the Court’s own motion to include a reference to subparagraph 37(1)(a)(v) and sub-s 37(3) AA 2005 “for the purpose of determining the real question in controversy between the parties” within the meaning and intent of O. 20, r. 8 of the Rules of Court (‘RC 2012’) and to do justice. [97] After considering the parties affidavits and submissions, I have indicated my agreement with Setiakon’s submission that the Arbitrator had considered the arguments put forth by the parties and he made a reasoned decision on the issue of the CNC. There is no inconsistency or defect in the Arbitrator’s reasoning which merits an order to set aside the Award. And now, after having considered the parties additional written submissions on the issue in relation to sub-s 37(6) AA 2005, it is my finding that this is not an appropriate case to make an order under sub-s 37(6) AA 2005 for the simple reason that Bellworth did not make an application for such an order in O.S. No. 41. [98] In Law, Practice and Procedure of Arbitration (Second Edition), LexisNexis, 2016 by Datuk Professor Sundra Rajoo at pp 747, 783 and 784, the learned author said, among others, that: “[45.11] … the power of the High Court to adjourn the proceedings and remit the award to the arbitrator under section 37(6) expressly falls under ‘an application under subsection (1)’ to set aside the award. Thus, a party must apply to set aside the award and specifically request that the court remit the award to the tribunal under section 37(6). This is a significant change from the previous Act …” (emphasis added). [99] The Court of Appeal in Sigur Ros (supra) confirmed that a party must first make an application to activate sub-s 37(6) AA 2005: “[38] We have no reason to depart from or reconsider the view expressed in Petronas Penapisan (Melaka) Sdn Bhd v Ahmani Sdn Bhd that the threshold under s 37 is ‘very low’ as compared to that under s 42. But, the option of sending the award back to the arbitrator to resume arbitration proceedings does not arise in this appeal as no application or request under s 37(6) was made to the High Court at the material time. Neither party applied for the proceedings before the High Court to be adjourned pending a reference back to the arbitrator for resumption of hearing of the arbitration. We are of the view that the option under s 37(6) is at either party’s behest and not on the court’s own invocation.” (emphasis added). [100] Sigur Ros was followed by this Court in Kris Heavy Engineering (supra) where the plaintiff had applied for an order that the Reasoned Decision be remitted to the Arbitrator pursuant to s 37 AA 2005 or the inherent jurisdiction of the Court (see paragraphs 93 - 96). [101] Yet in another decision by this Court, Ocned Water Technology Sdn Bhd v UEM Builders Bhd & Anor and another case [2023] MLJU 3044, it was held that: “[59] Judging by the Award read as a whole, the decision-making process of the Arbitrator cannot be faulted. In fact, in Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 at p 652, the Court of Appeal remarked that the Arbitrator is paid to deliver an award which is enforceable, and it is not the function of the court to set aside the award under s 37 AA 2005 without giving an opportunity to the arbitral tribunal to deliver an enforceable award. When a party to the arbitration complains of breach related to the subparagraphs as above mentioned, he must invite the court’s attention to sub-s 37(6) of the AA 2005 and any party who makes an application under s 37 without seeking appropriate direction pursuant to sub-s 37(6) must be seen to be an abuse of process of court and the application must be dismissed in limine unless the exception applies.” (emphasis added). [102] Hence, it is crystal clear that Bellworth must, apart from applying to set aside the Award, specifically request that the Court remit the Award to the Tribunal under sub-s 37(6) AA 2005. Neither Bellworth or even Setiakon has made such a request. [103] No application has been made by any party pursuant to sub-s 37(6) AA 2005. In my view, the request for remission under this provision must be made from the very beginning, when the application to set aside the Award was filed on 1.9.2023. Bellworth’s request was made only in encl. 168, after the Court invited the parties to address paragraph 94 in Bellworth’s first written submission (encl. 140). [104] Moreover, the Court finds that this is not an appropriate case for remission for the reasons as submitted by Setiakon, namely that the effectiveness of remission in this case, even if granted by the Court, is doubtful. The issue raised by Bellworth in the Setting Aside Application goes to the merits of the case. To remit the issue of the validity of the CNC and the imposition of LD to the Arbitrator would, in essence, require the Arbitrator to reconsider his decision and findings on the merits of the case. [105] Bellworth’s contention that the Award can be set aside in part based on the 4th Ground under sub-s 37(3) AA 2005 is seriously flawed in the light of Bellworth’s own admission that subparagraph 37(1)(a)(v) read with sub-s 37(3) AA 2005 were not relied upon from the inception of the arguments in relation to the 4th Ground. II. The Enforcement Application [106] Setiakon’s application was made pursuant to s 38 AA which provides as follows: “Recognition and enforcement “38. (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 recognized as binding and be enforced by entry as a judgment in terms of the award or by action.

In an application under subsection (1) the applicant shall produce –

the duly authenticated original award or a duly certified copy of the award; and

the original arbitration agreement or a duly certified copy of the agreement. …”. [107] In the light of the findings and conclusions of the Court in respect of the 1st to the 4th Grounds as discussed above, Bellworth has not discharged the burden of proving, on a balance of probabilities, that the Award should be set aside pursuant to the specific grounds which it had relied upon under s 37 AA 2005. [108] Setiakon, having complied with the requirements of s 38 AA 2005, is therefore entitled to register and enforce the Award as a judgment of this Court. Conclusion [109] Based on all the above said considerations, the Setting Aside Application was dismissed and the Enforcement Application was allowed. [110] Mr. Lam Wai Loon prayed for costs of RM80,000.00 for both O.S. because there were multiple rounds of submission, including the slide presentation. However, after having considered the matters as stipulated in O. 59, r. 16 of the RC 2012, and in the exercise of my discretion, I agreed with Mr. N. Nahendran’s proposal and awarded total costs of RM50,000.00 for both O.S., namely, RM30,000.00 for O.S. 41 and RM20,000.00 for O.S. 35, subject to allocatur. Dated: 31 December 2024 (ALIZA SULAIMAN) Judge High Court in Malaya Kuala Lumpur Counsels/ Solicitors: For the Plaintiff in O.S. No. 35 and the Defendant in O.S. No. 41: Lam Wai Loon (Amy Hiew Kar Yi and Felicia Lai Wai Kim with him) Messrs. Harold & Lam Partnership Advocates & Solicitors Suite 32-5, 32nd Floor Oval Tower Damansara No. 685, Jalan Damansara 60000 Kuala Lumpur For the Defendant in O.S. 35 and the Plaintiff in O.S. No. 41: Nahendran Navaratnam (Saranjit Singh, Balan Nair Thamodaran, Wong Wye Wah and Reuben Raphael Joseph with him) Messrs. Saranjit Singh Advocates & Solicitors Suite 51-3, Block D, Jaya One No. 72A, Jalan Profesor Diraja Ungku Aziz (Jalan Universiti) 46200 Petaling Jaya