Tumpuan Megah Development Sdn Bhd v 1. ) Ing Bank N.V (WA-24NCC(ARB)-24-07/2023)

1.

O.W BUNKER FAR EAST (SINGAPORE) PTE LTD … DEFENDANTS GROUNDS OF JUDGMENT (ORIGINATING SUMMONS) (APPLICATION TO SET ASIDE ARBITRATION AWARD) (MADE ON 29-3-2023) (SECTION 37 OF THE ARBITRATION ACT 2005) A.

Order sought to be set aside – Malaysia Arbitration Award

The Plaintiff had commenced an arbitration against the Defendants on 11-6-2020 (“Malaysia Arbitration”). This Malaysia Arbitration was instituted pursuant to an agreement to arbitrate clause that appears in the Set-Off Agreement dated 7- 4-2014 entered into between the Plaintiff and the 2nd Defendant.

The Arbitration panel consists of Mr. Andrew G Moran KC, Mr. Lee Wai Pong and Mr. Simon Milnes KC. The Malaysia Arbitration was constituted based on the notice to arbitrate issued by the Plaintiff.

The dispute between the parties relates to the 2 transactions for the supply and delivery of marine bunker fuels by the 2nd Defendant to the Plaintiff on the vessels “Straits 1” and “Dolphin 1”. The 2nd Defendant claims that the marine bunker fuel was supplied to the Plaintiff; however, the Plaintiff denies this.

A Partial Final Award was delivered by the arbitrators in the Malaysia Arbitration on 29-3-2023. The dispositive part of the award is as follows: -

(ii) Challenge by the Plaintiff to Set Aside the Award

The Plaintiff is dissatisfied with the Award and seeks to set aside the same in accordance with Section 37 of the Arbitration Act on the following grounds: - (5.1) Breach of Natural Justice

That the Malaysian tribunal failed to have proper regard to the Plaintiff’s contention that the London Award was without jurisdiction and not binding.

That the London Arbitration Award arose not under the Set Off Agreement.

The London Arbitration Award arose from a false agreement to arbitrate.

That the Malaysian Arbitration panel had failed to allow the Plaintiff the right to produce evidence and argument as to the existence of the agreements relied on and referred to in the London Arbitration. If this had been allowed, the Plaintiff would have demonstrated that these agreements were not genuine and were fraudulent, which would have rendered the London Award invalid and unenforceable.

The Plaintiff was deprived of its right to a fair hearing.

The Plaintiff should be given the right to produce evidence to challenge the jurisdiction of the London Arbitration and the London Award. The Plaintiff further contends that the London Award is not binding as it was made by a panel that does not have jurisdiction over the subject matter of the dispute. (5.2) The Award is Contrary to Malaysia’s Public policy.

There was a breach of natural justice and the failure to provide a fair hearing and deprived the Plaintiff of the right of a fair hearing.

The Malaysian Tribunal should have allowed the Plaintiff the right to challenge the jurisdiction of the UK tribunal. (5.3) The Malaysian tribunal ignored significant portions of the Plaintiff’s submissions. (5.4) Illogical and Defective Chain of Reasoning. (5.5) Bias and Pre-Judgment on the merits of the case. (5.6) Dispute not contemplated and not falling within the terms of the submission to arbitration. The arbitrators should not have summarily dealt with the issue in dispute and should have allowed parties to bring in evidence to show that the London Award was defective for want of jurisdiction and is not binding on the parties. (5.7) The Arbitral procedure is not in accordance with the agreement to arbitrate. (5.8) The Final Award is beyond the scope of the submission to arbitration by the parties.

(iii) Summary Decision of this Court

After considering the affidavits filed and the submissions by counsels, this Court dismissed the Originating Summons with costs. This Court finds that the Plaintiff has failed to prove that the Final Award falls within any of the provisos of section 37 of the Arbitration Act that justify setting aside the Malaysia Award.

Agreements entered between the Plaintiff and the

As stated earlier, the Plaintiff and the 2nd Defendant did enter into a Set Off Agreement dated 7-4-2014. Material terms of the said agreement are as follows: -

The Plaintiff and the 2nd Defendant have allegedly entered into the supply of Bunker Marine fuel for Straits 1 and Dolphin 1 as seen in the Sales Order Confirmation dated 17-10-2014 and 1- 11-2014. The terms of both Sales Order Confirmation contain the following clause: -

The 2nd Defendant’s OW Bunker Group’s material Terms and Conditions are as follows: -

(ii) Dispute as to alleged unpaid sums due to the Defendants London Arbitration Final Award Dated 4-2-2020 (“London Award”)

The 2nd Defendant is part of the OW Bunkers Group of Companies. The OWB Group has since collapsed and is now allegedly insolvent. The 1st Defendant is a bank incorporated in the Netherlands and is acting as agent on behalf of a syndicate of banks as Security Agents under a revolving facility agreement dated 19-12-2013 with OW Bunker & Trading A/S (“OWBAS”) to provide financing to OW Bunker Far East (Singapore) Pte Ltd. The required notice of enforcement dated 7-11-2014 and notice of appointment dated 13-11-2014 were produced by the Plaintiff as Exhibit CPN-1.

The dispute between parties in the London Arbitration arises out of the earlier referred Sales Order Confirmation for the delivery of marine bunker fuel to Straits 1 and Dolphin 1. The Plaintiff claims that the said Sales Order Confirmation and the claims were false. It alleges that:-

The Disputed Transactions were not supported by the necessary documentation.

(ii) That none of the processes to accomplish any ship-to-ship marine bunker fuel transfer were complied with and were not undertaken.

(iii) The vessels were not within the vicinity of the area at which the alleged marine bunkers were supplied. The vessels were in Kuantan and South China Sea en route to Miri, Sarawak, whereas allegedly the marine bunkers were supplied in Pasir Gudang, Selangor, and Kuantan, Pahang.

The Plaintiff did not allege that it had supplied any marine bunker to the 2nd Defendant.

The Defendants issued a demand from the Receivers acting to recover any alleged payments due from debtors of any company within the OWB Group. This was disputed by the Plaintiff.

The Defendants commenced an arbitration in accordance with the agreement to arbitrate that is referred to in the OW Bunker Group’s material Terms and Conditions. The notice to arbitrate was issued by the Defendants’ solicitors Messrs Allen & Overy via letter dated 2-5-2017.

It is important that I note what had transpired in the said arbitration:- (15.1) The Defendants did issue the notice to arbitrate dated 2-5-2017. (15.2) The Defendants nominated one Ms. Sara Kay as their chosen arbitrator. (15.3) The Plaintiff nominated one Mr. Colin Sheppard as its chosen arbitrator. (15.4) The Plaintiff did reserve its objection as to the existence of a valid arbitration agreement. The Plaintiff was represented by Asia Ascent Law Corporation, a firm of solicitors in Singapore. The said firm gave notice of Mr. Sheppard’s appointment and maintained that there was no binding arbitration agreement between the parties, as seen in paragraph 12 of the London Arbitration Award. (15.5) The Defendants had filed their Statement of Case (referred to as Claim Submission) dated 14-6-2017 without prejudice to their rights to challenge the validity of the claim and the jurisdiction of the tribunal. This opposition was maintained in the letter/questionnaire dated 2-8-2017. (15.6) The Plaintiff’s chosen arbitrator, Mr. Colin Sheppard, resigned on 30-8-2017 and subsequently, unfortunately, passed away on 3-9-2017. He was replaced by Mr. Gaisford on the appointment by the Plaintiff. (15.7) On 23-1-2018, the Plaintiff raised a jurisdictional issue concerning the constitution of the arbitration panel, and this was decided by the award dated 29-5-2018. (15.8) On 20-2-2018, Ms. Kay and Mr. Gaisford had appointed Ms. Clare Ambrose as the third arbitrator due to the absence of an agreement by the parties. (15.9) On 21-3-2018, the Plaintiff set out its jurisdictional objection to the tribunal's existence and claims: -

That the Contracts did not exist and were fraudulently created.

(ii) That the Contracts did not incorporate an arbitration clause.

(iii) That the composition of the tribunal did not comply with the arbitration clause. (15.10) The Tribunal considered the objection and found that the Plaintiff’s objection failed and did not constitute a basis on which to deprive the tribunal of its jurisdiction on the subject matter of the claim. (15.11) It is to be noted that the Plaintiff did participate in the said arbitration in London and did file among others, (i) its defence, (ii) sought further and better particulars of the claim by the Defendants, (iii) witness statement from Mr. Chang Poh Nee, Wang Whee Chin and Windson Goo, (v) Skeletal arguments and (vi) did participate in the arbitration hearing. (15.12) The London Arbitration had commenced from 9 to 11 December 2019 at the International Dispute Resolution Centre, Fleet Street London. (15.13) The Plaintiff had engaged Mr. Michael Davey KC, Mr. Leonard Chia and Mr. Michael Pollen.

After considering the evidence produced by the parties, the arbitrators made, inter alia, the following findings as seen in the Final Arbitration Award dated 4-2-2020: - (16.1) That the marine bunker supply did take place and was delivered to the vessels. (16.2) That the objection by the Plaintiff that the Defendants should have commenced arbitration pursuant to the Set-Off Agreement was not raised early and had participated in the arbitration, and is not allowed to object to jurisdiction in accordance with section 73 of the UK Arbitration Act 1996. (16.3) The Set Off Agreement did not apply to the dispute in question, as that would only be applicable if there was a situation of setting off debts from each party for the supply of marine bunker fuels. (16.4) That the previous conduct between parties shows that the OWB Terms were to govern the dispute which extends to the agreement to have the dispute arbitrated in London. (16.5) The conclusion of the London arbitrators has been helpfully summarized as follows: -

It must be noted that the Plaintiff did not apply to set aside the award in the Courts of England and Wales. No application was filed by the Plaintiff in the Courts in England and Wales for the said award to be set aside in accordance with section 67 of the UK Arbitration Act 1996. For ease of reference, I reproduce the said section:- “67 Challenging the award: substantive jurisdiction.

A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—

challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).

The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.

On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order—

confirm the award,

vary the award, or

set aside the award in whole or in part.

The leave of the court is required for any appeal from a decision of the court under this section.”

(iii) Registration of the London Final Arbitration Award as an order of the English and Wales Court

The Defendants had then applied to register the London Final Award as a Judgment of the English Court in accordance with section 66 of the UK Arbitration Act 1996. An order was made on 13-11-2020.

The Plaintiff did not participate in the said proceeding and did not apply to set aside the Final Award and did not oppose the application to register the said award.

(iv) Application to Register the Judgment of the English Courts in Malaysia

The Defendants have since applied to register the UK Judgment in Malaysia under the Reciprocal Enforcement of Judgments Act 1958 and was registered by way of an Ex Parte application on 22-3-2021. This was undertaken in the civil suit no. WA-24- 4-01/2021.

The Plaintiff is now seeking to set aside the said order that is pending before the Special Powers and Appellate Division of the High Court of Malaya in Kuala Lumpur.

Arbitration Proceedings Commenced in Kuala Lumpur by the Plaintiff – Malaysia Arbitration Award

The Plaintiff then commenced Arbitration Proceedings pursuant to clause 10 of the Set Off Agreement on 11-6-2020.

The Malaysia arbitration was constituted on 11-12-2020 and was comprised of Andrew C Moran KC, Mr. Lee Wai Pong, and Mr. Simon C Milnes KC.

The Defendants’ solicitors, Messrs Allen & Overy, wrote to the Plaintiff’s solicitors, Asia Ascent Law Corporation, by letter dated 5-3-2021 informing the Plaintiff that: -

It intends to seek security for costs.

(ii) It intends to object to the jurisdiction of the tribunal and will raise Res Judicata as an issue to be decided based on the award issued in the London arbitration.

(iii) That the Defendants shall suggest that proceedings be bifurcated and that the issue of Res Judicata be decided first.

The Plaintiff’s solicitors issued their response via email dated 9-3-2021, objecting to the bifurcation of the Malaysia arbitration.

The Plaintiff then filed its Statement of Claim dated 13-7-2021 with regard to its claim in the Malaysia Arbitration against the Defendants. The claims raised in the Malaysia Arbitration were also in relation to the same subject matter that was decided by the London Arbitration. The Plaintiff claims as follows: -

The Plaintiff also claims that the terms of the agreement to arbitrate as contained in the Set Off Agreement were breached by the Defendants. For ease of reference, I reproduce clauses that were relied upon: -

The Plaintiff sought the following reliefs: -

I note that the dispute in the Malaysia Arbitration also refers to the same issue that was heard in London i.e. whether the Marine Bunker fuel was supplied to the Plaintiff as alleged by the 2nd Defendant and whether the said agreements were fraudulently procured by the 2nd Defendant.

This Court finds that the reliefs sought in the Malaysia Arbitration are to set aside or expunge the effect of the London Arbitration. Despite not seeking to set aside the London Arbitration Award in the UK, the Plaintiff seeks to set aside or expunge the said award on the merits of the claim through a new arbitration in Malaysia under the terms of the Set Off Agreement. When one peruses the issues raised in the said Malaysia claim, one finds that:-

The Plaintiff again raises the same issue that the contract to supply the marine bunkers claimed by the Defendants was fraudulently created.

(ii) The Plaintiff claims that the two vessels did not receive the marine bunkers fuel as claimed by the Defendants.

(iii) that the contracts relied on by the Defendants were forged and should not be relied upon.

(iv) that the only valid and binding agreement between the litigants was the Set Off Agreement.

That the Plaintiff is not liable for the sums claimed by the Defendants.

I repeat that these were the same issues that were raised by the Defendants in the proceedings in the London Arbitration and which were decided by the arbitrators.

The panel of arbitrators in the Malaysia Arbitration decided by its ruling dated 28-9-2021 that this was a suitable case for the proceedings to be bifurcated and for security for costs to be provided. The questions that were put to the arbitrators were as follows: -

In an extensive written ruling, the arbitrators decided, inter alia:-

In accordance with the said ruling, parties then filed their written submissions concerning the issue of the jurisdictional objection raised by the Defendants. The parties to the Malaysia Arbitration were given ample opportunity to file its written submission on the issue whether Res Judicata applies and whether this precludes the Plaintiff from pursuing the same claims against pursuant to the Set Off Agreement. This can be seen from the documents filed: -

Messrs Allen & Overy’s submissions for the Defendants dated 30-9-2021 and 1-6-2022.

(ii) Messrs Asia Ascent Law Corporation submissions for the Plaintiff dated 25-2-2022.

(iii) Respondent’s Skeleton Opening Submissions dated 19-9-2022.

(iv) Claimant’s Skeletal Submissions dated 19-9-2022.

The arbitrators then heard the parties on this issue on 26 and 27 September 2022.

(vi) Partial Final Award by the Malaysian Arbitrators dated 29-3-2022

The Malaysian Arbitration Panel delivered its decision on 29-3-

A Partial Final Award was delivered, and the following findings were made, which can be seen in the following excerpts from the award of the arbitrators.: - This Court summarizes and reproduces the following excerpts from the award. (36.1) That the claim brought forth by the Plaintiff in the Malaysia Arbitration could only be sustained if the Malaysia tribunal overturns the determinations made by the London Arbitration. (36.2) A foreign arbitral award or judgment may give rise to res judicata. (36.3) The Plaintiff should have either challenged the jurisdiction of the London Arbitration by applying to set aside the award or by resisting the award at the time when the award is being enforced in Malaysia. This power and jurisdiction are laid down under section 67 of the UK Arbitration Act and under sections 18, 38 and 39 of the Malaysia Arbitration Act. (36.4) The London Arbitration Award is binding on parties unless it is set aside by the Plaintiff before the Courts of its originating jurisdiction (London) or where there is an attempt to have the award recognized and enforced. (36.5) The Malaysian arbitration is an abuse of process as it is an attempt to quash the award made at the London arbitration. The Plaintiff should have and could have availed itself of the processes provided in law to set aside the award or to dispute the enforceability of the said award. The statutorily available avenues should have been utilized instead of a new arbitration proceeding under the Set Off Agreement. (36.6) The arbitrators in the Malaysia arbitration do not have jurisdiction to hear the Plaintiff’s claim due to res judicata, and the bringing of the arbitration is an abuse of process. C. Applicable Law on Setting Aside Arbitration Awards under section 37 of the Arbitration Act

I reproduce section 37 of the Arbitration Act: -

An award may be set aside by the High Court only if-

The party making the application provides proof that-

a party to the arbitration agreement was under any incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of Malaysia;

(iii) 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-

the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

(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-

the making of the award was induced or affected by fraud or corruption; or

a breach of the rules of natural justice occurred-

during the arbitral proceedings; or

(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.

An application for setting aside may not be made after the expiry of ninety days from the date on which the party making the application had received the award or, if a request has been made under section 35, from the date on which that request had been disposed of by the arbitral tribunal.

Subsection (4) does not apply to an application for setting aside on the ground that the award was induced or affected by fraud or corruption.

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.

Where an application is made to set aside an award, the High Court may order that any money made payable by the award shall be brought into the High Court or otherwise secured pending the determination of the application.

The leading cases in this area are Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 12 MLJ 198 and Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd [2020] 9 CLJ 466.

I find that the principles of law applicable in an application to set aside an arbitration award premised on section 37 of the Arbitration Act has been succinctly explained by Aliza Sulaiman J in Ocned Water Technology Sdn Bhd v UEM Builders Berhad & Anor and another case [2023] CLJU 2727 as follows: - “[24] Based on the provisions in the AA 2005 and the case authorities to date, the legal principles in relation to an application to set aside an award under s. 37 AA 2005, and specifically, pursuant to the subparagraphs relied upon by UB-EP in the Setting Aside Application, may be summarised as follows:

an award made by an arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties (see sub-s 36(1) AA 2005);

the court shall not intervene in matters governed by the AA 2005 except where so provided in the said Act (see s. 8 AA 2005);

the grounds enumerated in s. 37 are exhaustive and the court cannot set aside an award for reasons other than those that are listed. Further, the said grounds need to be construed narrowly as they represent exceptions to the finality of arbitration awards as stipulated in s. 36 AA 2005. This is to avoid devaluing the arbitration agreement that arbitral awards are final and binding and also to preserve the autonomy of the forum selected by the parties by minimising judicial interference in arbitral awards [see Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 1 CLJ 1; [2019] 2 MLJ 413 (FC) and Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal [2020] 9 CLJ 466; [2020] 6 MLRA 124 (FC)];

when considering the exercise of discretionary power under subparagraphs 37(1)(a)(iv), 37(1)(a)(v) and 37(1)(b)(ii) AA 2005, the court does not sit as an appellate court and hence, the merits of the parties' respective case before the arbitral tribunal are not open to scrutiny [see The Government of India v Cairn Energy India Pty Ltd &

In respect of subparagraphs 37(1)(a)(iv) and (v) AA 2005, the disputes which the parties choose to submit for arbitration will demarcate the jurisdiction of the arbitral tribunal in the arbitral proceedings between them. An arbitral tribunal has no jurisdiction to resolve disputes that have not been referred to it in the submission to arbitration. In deciding whether an award deals with a dispute not contemplated by or not falling within the terms or scope of submissions to arbitration and whether an award contains decision on matters beyond the scope of the submission to arbitration, the dispute that was referred to the arbitrator must be determined by reference to the pleadings which were submitted by the parties during the arbitration. Pleadings in arbitral proceedings provide a convenient way for the parties to define the jurisdiction of the arbitrator by setting out the precise nature and scope of the disputes in respect of which they seek the arbitrator's adjudication. The burden lies on the party applying to set aside an award to prove, on a balance of probabilities, that there is a "new difference" which was not relevant to the determination of the dispute, and it was not an issue in dispute between the parties. In this regard, the parties' pleadings and submissions during the course of the arbitration are relevant considerations [see PT Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR 98, Perwira Bintang Holdings Sdn Bhd v Kerajaan Malaysia [2013] CLJU 1336; [2014] 11 MLJ 561 (HC) and Kerajaan Malaysia v Perwira Bintang Holdings Sdn Bhd [2015] 1 CLJ 617 (CA)]; and

with regards to subparagraphs 37(1)(b)(ii) and 37(2)(b)(i) and (ii) AA 2005 -

in applying the concept of public policy for the purpose of setting aside an award under s. 37 of the AA 2005, it must be read narrowly and more restrictively. The concept of public policy must be one taken in the higher sense where some fundamental principle of law or justice is engaged, some element of illegality, where enforcement of the award involves clear injury to public good or the integrity of the court's process or powers will be abused. The injustice must have real effect and had prejudiced the basic rights of the applicant;

(ii) the court's intervention should be sparingly used, and the court must be compelled that a strong case has been made out that the arbitral award conflicts with the public policy of Malaysia. Even though the court finds that a breach of the rules of natural justice has been established or that an arbitral award is in conflict with the public policy under s. 37 AA 2005, it does not necessarily mean that the award must be set aside as a matter of course. The power of the court to set aside an award under s. 37 is discretionary and this power must be exercised judiciously and only when it is just to do so. In considering whether the discretion should be exercised, the court must undertake an evaluation of relevant factors such as 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. 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 Kyburn Investments Ltd v Beca Corporate Holdings Ltd [2015] 3 NZLR 644; Sigur Ros Sdn Bhd v. Master Mulia Sdn Bhd [2018] 8 CLJ 291(CA), Jan De Nul (supra) and Pancaran Prima (supra)]; and

(iii) the guiding principles on the exercise of residual discretion when an application for setting aside an award is grounded on breach of natural justice are as follows: "First, the court must consider: (a) which rule of natural justice was breached; (b) how it was breached; and (c) in what way the breach was connected to the making of the award; Second, the court must consider the seriousness of the breach in the sense of whether the breach was material to the outcome of the arbitral proceeding; Third, if the breach is relatively immaterial or was not likely to have affected the outcome, discretion will be refused. Fourth, even if the court finds that there is a serious breach, if the fact of the breach would not have any real impact on the result and that the arbitral tribunal would not have reached a different conclusion the court may refuse to set aside the award; Fifth, where the breach is significant and might have affected the outcome, the award may be set aside; Sixth, in some instances, the significance of the breach may be so great that the setting aside of the award is practically automatic, regardless of the effect on the outcome of the award; Seventh, the discretion given the court was intended to confer a wide discretion dependent on the nature of the breach and its impact...." [see paragraph 53 in Master Mulia Sdn Bhd v. Sigur Ros Sdn Bhd [2020] 9 CLJ 213; [2020] 6 MLRA 51 at pp 80 - 81 (FC)].”

Liza Chan J had also helpfully summarized the position as follows in Tune Group Sdn Bhd & Ors v Padda Gurtaj Singh [2022] CLJU 2228: - "[23] As such, the Court must be wary if the applicants in applying to set aside the award are seeking to widen the strictly narrow grounds for challenge in s. 37 and s. 39 AA, and not be carried away by the applicants' resort to convoluted or fanciful arguments and interpretation of the facts, evidence and law which at any rate are not within the province of the court but is to be as found and determined by the tribunal as arbiter of fact and evidence. [24] The Court is to take note of trite principles as follows:

24.1 The court is not an appellate court, and does not sit in appeal of a final arbitral award - Garden Bay Sdn Bhd v. Sime Darby Property Bhd [2018] 6 CLJ 199; [2018] 2 MLJ 636 CA at [15]; Pembinaan LCL Sdn Bhd v. SK Styrofoam (M) Sdn

and [14] - [16]; Infineon Technologies (M) Sdn Bhd v. Orisoft Technology Sdn Bhd (previously known as Orisoft Technology Bhd) and another application [2010] CLJU 889; [2011] 7 MLJ 539 HC at [75];

24.2 An applicant cannot challenge the merits of, reopen and/or re-argue the findings and decision of the Tribunal on the substantive issues of the dispute decided by Tribunal - Master Mulia (supra) FC at [54]; Brunsfield Project Management Sdn Bhd v. Ingeniur Bersekutu Consulting Engineers [2015] CLJU 1546 CA at [33], [41] and [44]; MRCB Engineering Sdn Bhd v. Lee Hon Min & Others [2018] CLJU 835 HC at [22] - [27]; The Government of India v. Vedanta Ltd (legal successor to Cairn India Ltd) & Anor [2018] CLJU 617; [2018] MLJU 630 HC at [64];

24.3 The Award cannot be challenged on alleged points of law or interpretation of law. This would have been permissible only specifically under s. which was appealed and dealt with at a later part of this judgment - Huawei Technologies (Malaysia) Sdn Bhd v. Maxbury Communications Sdn Bhd & Another Appeal [2019] 6 CLJ 588; [2019] MLJU 1755 CA at [38], [41] to [43] which held that error of law could only be appealed under s. 42 and not s. 37 of the AA 2005. All errors of fact and/or law are errors committed within the scope of jurisdiction or mandate of the arbitrator. To hold otherwise would result in every award being subject to review, and in effect, appeal by the courts; Ketua Setiausaha Dalam Negeri & Anor v. Salconmas Sdn Bhd [2020] CLJU 422; [2020] MLJU 476 HC at [60] on the effect of the deletion s. 42 and that all arbitral awards can no longer be challenged on the ground that the arbitrator had fallen into an error of law;

24.4 The limited grounds of challenge are as set out in ss. 37 and 39 AA - Garden Bay Sdn Bhd v. Sime Darby Property Bhd [2018] 6 CLJ 199; [2018] 2 MLJ 636 CA at [12];

24.5 Breaches of natural justice and public policy ought to be manifestly obvious and/or against the conscience or morality and entail a very high threshold. For breach of public policy - Pancaran Prima Sdn Bhd v. Iswarabena Sdn Bhd & Another Appeal (supra) FC at [143]; Jan De Nul supra at [55] and [58] Sigur Ros Sdn Bhd v. Master Mulia Sdn Bhd [2018] CLJU 2125; [2018] 3 MLJ 608 CA at [31] - [33] PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2007] 1 SLR 597 (Singapore Court of Appeal) at [59]. On breach of natural justice - Pancaran Prima Sdn Bhd v. Iswarabena Sdn Bhd & Another Appeal (supra) at [139] & [140]; Master Mulia at para [53] & [62]; AKN and another v. ALC and others and other appeals (supra) at [39]; Kyburn Investments Ltd v. Beca

24.6 Matters solely reserved to the Tribunal:

24.6.1 finding and assessment of the facts and evidence - Pancaran Prima Sdn Bhd v. Iswarabena Sdn Bhd & Another Appeal (supra) at [132]; Garden Bay at [53]; Chain Cycle Sdn Bhd v. Kerajaan Malaysia [2016] 1 CLJ 218; [2016] 1 MLJ 681 CA at [61], Ketua Setiausaha Dalam Negeri & Anor v.

24.6.2 interpretation of law - Huawei Technologies at [38], [41], [42] & [43] [Tab 22 of SSPC's BOA (Vol II) Encl. 110 p. 158]; Ketua Setiausaha Dalam Negeri & Anor v. Salconmas Sdn Bhd (supra) at [60], Cairn Energy India Pty Ltd & Anor v. The Government of India [2010] 2 CLJ 420; [2009] 6 MLJ 795 CA at [2], [10], [11], [21] to [24], Kluang Health Care Sdn Bhd v. Lee Yong Beng [2016] 1 CLJ 281; [2015] MLJU 77 3 HC at [36], [37] & [40];

24.7 In the context of a final arbitral award and the AA, the term in "excess of jurisdiction" is a reference to whether a dispute, matter or issue as determined by the Tribunal is within the terms or scope of a submission to arbitration, and therefore within the jurisdiction of the Tribunal. It is not a reference to whether the Tribunal made a wrong decision or an error of law in its interpretation, construction or application of a contract, a term thereof or the law in its determination and decision on the dispute or matter that was without question submitted to arbitration and within its jurisdiction to determine - Huawei Technologies (supra) at [38], [41] to [43], [45] and [46]; The Government of India v. Cairn Energy Pty Ltd & Ors [2012] 3 CLJ 423; [2014] 9 MLJ 149 HC at [130] to [137], PT Asuransi (supra) at [37] to [39] Otherwise, every challenge as to the correctness of an arbitration award would be said to be made without jurisdiction and amenable to appeal in circumvention of the AA - Huawei Technologies (supra) at [42]."

The crux of the Plaintiff’s arguments, despite putting in different forms, justifying the setting aside of the Malaysia Award lies on its contention that it should be given the opportunity to produce viva voce evidence to show (i) that the dispute fall within the scope of the Set Off Argument, (ii) that the dispute does not fall within the scope of the Contracts relied on by the Defendants in the London Arbitration, (iii) that the Contracts and documents relied on by the Defendants to prove that the bunker marine fuel was supplied to the 2 vessels were fraudulent documents or fraudulently procured by the Defendants,(iv) that the London Arbitrators did not have jurisdiction to hear and determine the dispute between the parties and (v) that the London Arbitration Award is not binding and should not be recognized by the Malaysia arbitrators. It claims that the alleged summary disposal of the claim by the Malaysian Arbitrators were wrong and they should be allowed to produce oral testimony of witnesses to justify these claims and that the Malaysia Arbitrators should disregard the London Award as it is allegedly made without jurisdiction.

It is on this basis that the Plaintiff claims that the Arbitrators in the Malaysia Arbitration should not have made the award that the dispute is now Res Judicata and that the Plaintiff should be allowed to have the arbitration proceed and have the arbitrator decide the dispute based on the terms of the Set Off Agreement and decide on the merits of the case after parties present their evidence at a hearing to be fixed.

I find that the Plaintiff accepts that there exists an Award made by the London Arbitration dated 4-2-2020. As seen earlier, the Plaintiff raised an objection in the London Arbitration that the dispute between the parties should be heard and disposed of by way of an arbitration in Kuala Lumpur and not in London in accordance with the terms of the Set Off Agreement. This issue was considered by the London Arbitrators and it was decided that the dispute did not fall under the terms of the Set Off Agreement and that they did have jurisdiction pursuant to the terms of the OWB Terms. This can be seen from the following excerpts of the Award made by the London Arbitration:-

The Plaintiff thereafter had the opportunity to set aside the London Arbitration Award pursuant to section 67 or section 68 of the UK Arbitration Act 1996. This opportunity was not taken by the Plaintiff, and the said Award was not set aside in accordance with the applicable laws of the seat of the arbitration. The documents produced before this Court show that the Plaintiff did participate actively in the London Award.

The Plaintiff nevertheless argues that despite the failure of its decision not to set aside the London Award before the English Courts, it is still entitled to challenge its validity and the jurisdiction of the London Arbitrators at the place where the London Award may be enforced, i.e. Malaysia. The Plaintiff further suggests that this could be undertaken by way of a new arbitration in Kuala Lumpur in accordance with the terms of the Set Off Agreement. Despite participating in the London Award, the Plaintiff contends that it has a right to ignore it and continue with a fresh award on the same facts and the same dispute.

Simply put, the Plaintiff therefore claims that it is entitled to ignore the London Arbitration and the Malaysia Arbitrators should therefore have the dispute set down for a full hearing and witnesses be produced by the parties on the issues pleaded in the claim. The Plaintiff puts emphasis on its alleged right to produce witnesses and documentary evidence to challenge that the agreements and invoices referred to and relied in the London Arbitration were fraudulently created, and it is not binding as well as that the two vessels did not and could not have taken delivery of the marine bunker fuels.

The Plaintiff’s counsels submits that it is entitled to challenge and ignore the London Arbitration based on the decision of the UK Supreme Court in Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763 and PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal [2013] SGCA 57.

Firstly, I find that there is a fallacy in the arguments put forth by counsel for the Plaintiff. One must first look at the two decisions in detail to see whether they support the arguments put forth by the Plaintiff’s counsel.

In Dallah Real Estate (supra) the UK Supreme Court found: -

a party who challenges the validity and jurisdiction of the arbitration panel that had entered an award against it may challenge the said decision either through the Courts where the arbitration is seated or through the Courts where the award is being recognized and enforced.

(ii) under the UK Arbitration Act, a party who has not submitted to the jurisdiction of the UK seated arbitration is entitled to a full judicial determination on evidence of an issue of jurisdiction before the English Courts if an application is made in time in accordance with section 67 of the UK Arbitration Act 1996 or under section 72 of the same Act (see Azov Shipping Co v Baltic Shipping Co [1999] 1 All ER 476. This is due to the supervisory jurisdiction of the English Courts as provided under section 67 and section 72 of the UK Arbitration Act.

(iv) The same consideration will also be applicable when the said award is being enforced in the UK. A party where the award is being enforced in the UK is entitled to raise the issue of jurisdiction of the said arbitrator. The English Courts pursuant to section 103 of the UK Arbitration Act had powers to determine whether the arbitrator had jurisdiction to determine the issue in dispute.

Therefore, if a party who is subject to an arbitration award believes that the award is erroneous due to the lack of jurisdiction, then the party could challenge and apply to set aside either by applying to set aside the award under section 67 or section 72 of the UK Arbitration Act if it is seated in the UK or by way of section 103 of the UK Arbitration Act if the award is being enforced in the UK.

(vi) The UK Supreme Court did not say that the party could institute a new arbitration on the same subject matter and seek orders that may be contradictory to the earlier award. Neither did the UK Supreme Court say that the new arbitration has the power to ignore the earlier award and make any order that may be in conflict or have the effect of setting aside the award of the previous panel.

The same position is seen in PT First Media TBK v Astro (supra). In this case, Sundaresh Menon CJ held: - “132 On the totality of the above considerations, we are compelled to conclude that Art 16(3) is neither an exception to the 'choice of remedies policy of the Model Law, nor a 'one-shot remedy'. Parties who elect not to challenge the tribunal's preliminary ruling on its jurisdiction are not thereby precluded from relying on its passive remedy to resist recognition and enforcement on the grounds set out in Art 36(1). That having been said, we are of the tentative view, as noted above, that the position might not be the same in relation to whether such a party may raise such a ground to initiate setting aside proceedings under Art 34.” … 142 In our view, it is clear that s 19B(1) had everything to do with res judicata of issues which results in the tribunal being functus officio in relation to awards already made, and nothing to do with the availability of curial remedies. While s 19B(4) does talk about curial remedies, its effect was misconstrued by the Judge. We disagree that s 19B(4) imposes a positive obligation on the award debtor to challenge the award in an active manner, viz, setting aside, if it wishes to extricate itself from the otherwise "final and binding" consequences of the award. The point of s 19B(4) is a negative one. As Gloster J pointed out, although issues determined under the award are res judicata, it was important to dispel the misconception that the award then becomes unimpeachable. On the contrary, it may still be challenged in accordance with the available processes of appeal or review of the award permitted by the law governing the arbitration. In short, s 19B(4) in fact clarifies what "final and binding" does not amount to.”

Therefore, as the Defendants now intends to have the London Award enforced in Malaysia, the Plaintiff may resist the application to enforce the award pursuant to section 39 of the Arbitration Act. Our laws, such as those in Singapore and the UK, do not have a proviso that allows for the setting aside or non-recognition of an award by way of a fresh arbitration. I find that the presumption remains that the award is deemed to be valid and binding until such a time that the party who challenges it is able to provide proof to our Courts that the arbitration is unlawful or lack of jurisdiction under any of the category of circumstances recognized in section 39 of the Arbitration Act

The burden to show that the award is invalid or not binding is on the party who alleges the same. This can also be seen in section 37 of our Act.

I reproduce the relevant provisos: -

Section 37

An award may be set aside by the High Court only if-

the party making the application provides proof that-

a party to the arbitration agreement was under any incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of Malaysia;

(iii) 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-

the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

(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-

the making of the award was induced or affected by fraud or corruption; or

a breach of the rules of natural justice occurred-

during the arbitral proceedings; or

(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.

An application for setting aside may not be made after the expiry of ninety days from the date on which the party making the application had received the award or, if a request has been made under section 35, from the date on which that request had been disposed of by the arbitral tribunal.

Subsection (4) does not apply to an application for setting aside on the ground that the award was induced or affected by fraud or corruption.

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.

Where an application is made to set aside an award, the High Court may order that any money made payable by the award shall be brought into the High Court or otherwise secured pending the determination of the application.

(ii) Section 39

Recognition or enforcement of an award, irrespective of the State in which it was made, may be refused only at the request of the party against whom it is invoked-

where that party provides to the High Court proof that-

a party to the arbitration agreement was under any incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the laws of the State where the award was made;

(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;

(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

(vii) the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or

if the High Court finds that-

the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

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

If an application for setting aside or suspension of an award has been made to the High Court on the grounds referred to in subparagraph (1)(a)(vii), the High Court may, if it considers it proper, adjourn its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the other party to provide appropriate security.

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 submitted to arbitration may be recognized and enforced.

This can also be seen in sections 67 and 103 of the UK

67 Challenging the award: substantive jurisdiction.

A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court-

challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).

The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.

On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order-

confirm the award,

vary the award, or

set aside the award in whole or in part.

The leave of the court is required for any appeal from a decision of the court under this section.

(ii) Section 103 of the UK Arbitration Act 103 Refusal of recognition or enforcement.

Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.

Recognition or enforcement of the award may be refused if the person against whom it is invoked proves-

that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;

that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;

that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;

that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (but see subsection (4));

that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country in which the arbitration took place;

that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.

Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award.

An award which contains decisions on matters not submitted to arbitration may be recognised or enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those on matters not so submitted.

Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award. It may also, on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security.

As such, I find that the Plaintiff could have challenged the decision of the London Arbitration Award either through the English Courts (its seat) or through the Malaysian Courts (place for enforcement). I do not believe that the award should have been challenged by way of a fresh arbitration. The passive remedy referred to in the applicable legislation and explained in the above cases does not refer to an alleged right for the disgruntled party to then file a fresh arbitration on the same subject matter and the same issue in dispute.

It is also important to reiterate that the Plaintiff had participated in the London Arbitration and produced witness statements to show that the (i) the two vessels could not have received the vessels as they were allegedly not at the place of delivery as stated in the delivery documents, (ii) that the Plaintiff did not make the orders for marine bunker fuels (iii) that the contracts were fraudulent. Singaporean Counsel for the Plaintiff engaged in the London Arbitration also participated extensively in the said proceedings.

The above fact is important. I am aware that this Court does not sit in an appeal against the decision of the Malaysian arbitrators, but it is important that the above factors be considered when dealing with the application filed by the Plaintiff to set aside the Malaysian Award.

I will now deal with each of the issues raised by the Plaintiff to justify setting aside the Award made by the Malaysian arbitrators. For convenience, I will deal with the issues in the following sequence:-

Issue 1 - Section 37(1) (a) (vi) of the Arbitration Act – The arbitration procedure was not in accordance with the agreement of the parties (scope of arbitration and process)

(ii) Issue 2- Section 37 (1) (a) (iv) – award deals with a dispute not contemplated and not falling within the terms of the submission to arbitration

(iii) Issue 3 – Section 37(1) (a) (v) – award contains decisions on matters beyond the scope of the submission to arbitration

(iv) Issue 4 – Section 37(2)(a) – the making of the award was affected by fraud or corruption

Issue 5 – Section 37(2) (b(ii) of the Arbitration Act – breach of natural justice occurred in the making of the award and the tribunal had prejudged the merits of the claim

(vi) Issue 6 – Section 37(1) and section 37(2) of the Arbitration Act – award is in breach of the rules of natural justice occurred during the arbitral proceedings and the decision is illogical / defective chain of reasoning, ignored the Plaintiff’s submissions and evidence and unable to present its case

(vii) Issue 6 – Section 37(1)(b) (ii) – award is allegedly is in conflict with Malaysia public policy E. Reasoning of this Court – Dismissing the Plaintiff’s Application

Issue 1 - Section 37(1) (a) (vi) of the Arbitration Act – The arbitration procedure was not in accordance with the agreement of the parties (scope of arbitration and process)

The Plaintiff suggests that the Malaysian Arbitrators had wrongly decided to dismiss its case summarily based on the finding that the parties are subject to the Res Judicata and are bound by the findings made by the London Arbitration.

I opine that the Malaysian arbitrators did act in accordance with the applicable procedures of the 2018 AIAC Rules and had the power to direct the bifurcation of the hearing of the claim in accordance with section 21 and section 26 of the Arbitration Act

See Pancaran Prima Sdn Bhd v Iswarebena Sdn Bhd & Another appeal [2020] 9 CLJ 466.

Section 26 of the Arbitration Act is produced below: -

Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or oral arguments, or whether the proceedings shall be conducted on the basis of documents and other materials.

Unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall upon the application of any party hold oral hearings at an appropriate stage of the proceedings.

The parties shall be given reasonable prior notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of goods, other property or documents.

All statements, documents or other information supplied to the arbitral tribunal by one party shall be communicated to the other party.

Any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

The power to conduct the arbitration in such a manner as the tribunal deems appropriate is also provided under Article 17 of the AIAC rules. I reproduce the relevant provisos: -

The arbitrators are entitled to control the proceedings as they deem fit. They are entitled to have the dispute bifurcated and determine what issues should be heard first. This is clear from the decision of the Federal Court in Telekom Malaysia Bhd v Obnet Sdn Bhd [2025] 1 CLJ 17. In that case, Hasnah Mohammed Hashim FCJ held: - “[45] After giving much consideration to this issue, we are satisfied that there is a good deal of substance in the argument put forward by learned counsel for Telekom that a decision on liability is a decision on the substance of the dispute and thus an award under the Act. We reiterate that the AA 2005 excludes the possibility of the arbitrator delivering an oral award. Undeniably, the arbitrator is the master of the arbitration proceedings and can decide to bifurcate the proceedings or otherwise. However, the provisions of the AA 2005 must be strictly complied with and the arbitrator must carry out his functions and duties as expressly required under the Act. The arbitrator is required to give a sufficiently reasoned award to demonstrate the reasons for the decision and more importantly, as a prerequisite for any appeal against the arbitral tribunal's decision. Further, with a written award, there will be certainty for the parties to proceed with the next stage of the arbitration. Thus, any failure to comply is a violation of the Act and will taint any decision made by an arbitrator.”

To further buttress its argument, Counsel for the Plaintiff argues that the Malaysian arbitrator had wrongly decided not to accede to jurisdiction due to Res Judicata. He argues that the Malaysian arbitrator should not have found that it is bound by the London Award. He emphasizes that the London Arbitrator did not have any jurisdiction on the subject matter of the dispute as the Agreements relied on by the Defendants were fraudulently created. Therefore, the Malaysian arbitrator should have ignored the London Award and directed the proceedings to continue and give his client the opportunity to produce witnesses and documents in this new arbitration to show that these claims for unpaid marine bunker fuel were false. For failing to accept the said argument and not accepting their arguments, the Malaysian arbitrators had allegedly acted beyond their jurisdiction and powers afforded to them.

I find that this argument is misconceived. I find that the Malaysia Arbitrators had only found that since (i) the London Arbitration award is still binding on the Plaintiff, (ii) the said award has not been set aside by an order of Court and there is no order not to recognize the said award, (iii) the Plaintiff is a party to the arbitration proceedings and did participate in the said proceedings, and (iv) that the subject matter of the claim in the Malaysia proceedings is similar to those in the London Arbitration, the tribunal will not accede to jurisdiction by reason of Res Judicata effect of the earlier proceedings and that that the bringing of this new claim tantamount to an abuse of process.

This is seen in the finding made by the Malaysian arbitrators, which is reproduced herein:-

I do not find that the Malaysian arbitrators had acted beyond the scope of the agreement to arbitrate as it appears in the Set Off Agreement or have failed to apply Malaysian law. Instead, I find that the Malaysia Award is based on Malaysian law and is in accordance with the powers afforded to the arbitrators under our laws. The decision to bifurcate proceedings and determine whether the said London Award constitutes Res Judicata on the litigants and whether the Malaysia Arbitration is an abuse of process is within the confines of the powers reposed with the Malaysia arbitrators.

The Malaysian arbitrators have given the parties ample opportunity and latitude to present their evidence and arguments on the issue of Res Judicata and abuse of process raised by the Defendants. I therefore find that the complaints by the Plaintiff on this issue are not warranted. The facts of this case do not fall within the category of cases recognized by our laws as seen in The Government of India v Cairn Energy India Pty Ltd & Ors [2014] 9 MLJ 149, Thai-Lao Lignite Co Ltd v Government of the Lao People’ Democratic Republic [2017] 9 CLJ 273 and Tune Group Sdn Bhd & Ors v Padda Gurtaj Singh & Another appeal [2023] 1 LNS 1664.

I further find that, as reproduced earlier, there is nothing wrong with the reasoning of the Malaysian arbitrators. As I have alluded earlier, the burden of proof to show that the London Award is not valid is on the Plaintiff. Our laws only allow for such challenge to be undertaken through our Courts either in accordance with the laws of the seat, where there exists supervisory jurisdiction, or where the successful litigant seeks enforcement.

Even the Plaintiff’s contention that the Malaysia Arbitrators had apparently relinquished its powers and followed the decision of the London Arbitrators is incorrect. I find that the Malaysia Arbitrators had decided to consider first whether London Award is binding on the Plaintiff, whether Res Judicata applies and whether the constitution of the new arbitration is an abuse of process. The decision had correctly applied our laws and correctly identified the principles applicable when dealing with issues concerning Res Judicata and abuse of process as explained by our Courts.

The Malaysian arbitrators did have the power to decide first whether the subject matter of the claim should not be allowed to be reopened on the issue of Res Judicata / Issue Estoppel. This power is provided under section 18 of the Arbitration Act 2005.

I also find that there is nothing wrong with the decision to have this issue heard first. The tribunal did act within the scope of the agreement to arbitrate but decided to first deal with the issue of whether the litigants should not be allowed to reopen the same claim twice. An almost similar case can be seen in the Singaporean Court of Appeal case of BTN and another v BTP and another [2020] SGCA 105.

In that case, BTN is a company incorporated in Mauritius and BTO is a Malaysian company undertaking an online travel agency (Applicant). BTP and BTQ (Respondent) are individuals and were former substantial shareholders in BTO. BTN and the Respondent entered into a Sale and Purchase Agreement that included shares in BTO. Part of the terms of the Sale and Purchase Agreement was that the Respondent were to be employed by BTO and their terms of employment were subject by a separate Employment Contract.

Any dispute out of the terms of the Sale and Purchase Agreement is subject to an agreement to arbitrate. A similar clause also appears in the Employment Contract of the Respondent with BTO.

Subsequent to the completion of the Sale and Purchase of the shares in the companies from the Respondent, they were removed as directors of BTO and were removed from their employment.

Dissatisfied with the decision to remove the Respondent, they initiated the process available to disgruntled employees and made representations to the Director General of Industrial Relations. This claim was eventually referred to the Malaysian Industrial Court which had heard the claims and decided that the dismissal had been without just cause and awarded compensatory remedies based on their monthly salaries. The Applicant did not appear before the Malaysian Industrial Court. The Award of the Malaysian Industrial Court was issued on 6-4- 2015 and 29-7-2015 against the Applicant.

The Respondent then commenced arbitration proceedings alleging breach of the Sale and Purchase Agreement. Both argued that they were dismissed without cause and were therefore entitled to receive their alleged earn-out earnings, provided in the said Sale and Purchase Agreement, in the sum of US$35 million. The Respondent argues that the issue of whether they were wrongfully dismissed is subject to Res Judicata due to the decision of the Malaysian Industrial Court.

The arbitrators hearing the claim decided that the issue of whether the decision of the Malaysian Industrial Court is binding on the tribunal. The panel issued its Procedural Order No. 5 setting out the following issues to be determined: - A. What, if anything, is the effect of the judgments of the [MIC]?

What are the issues before the Tribunal in this arbitration that are said to be the subject of res judicata?

What did the [MIC] decide?

What law governs the question of res judicata?

Are the findings of the [MIC] binding on the Tribunal? Question A.4 will include: (a) the question of whether the decisions of the [MIC] are binding as a matter of contract on a proper interpretation of the SPA and PEAs [i.e., the Construction Issue], in addition to the questions of res judicata under the general law [i.e., the Res Judicata Issue]; and (b) determination of all issues necessary to resolve whether the findings of the [MIC] are binding on both [appellants], including (i) all questions of Mauritian law (if that is the applicable law) and (ii) whether any preclusive effect extends to [BTN] as well as [BTO] (whether by way of privity, the doctrine of co-interested parties or otherwise).

After hearing counsels for the Applicant and the Respondent, the Tribunal issued a Partial Award and internal alia held that the Applicant was prevented from arguing that the Respondent were terminated with Cause under the SPA and the Contract of Employments by the doctrine of issue estoppel under Singapore law as those issues were dealt with by the Malaysian Industrial Court.

The Applicant then filed an application to set aside the Partial Award. As seen in the judgment of Judith Prakash JA, the complaint by the Applicant was as follows: - “[1.] …..The appellants before us contend very strongly that an award made against them must be set aside on the public policy ground because it has deprived them of their fundamental and contractual right to defend themselves against the claims of the respondents and further, to make claims against the respondents in turn. In brief, the appellants are aggrieved because the arbitral tribunal before which they appeared held that they were prevented by the doctrine of res judicata from litigating on a vital component of their defence to the respondents’ claim in the arbitration. They say there is nothing more repugnant to the most basic notions of justice than to deny it to one party. That may be so, but whether “denial of justice” is an appropriate way in which to label what happened in the arbitration proceedings is another matter. Litigants affected adversely by the application of the res judicata doctrine, a long-established common law doctrine, often consider themselves to have been unfairly deprived of their right to a hearing. … [34] The effect of the Partial Award was that the appellants would not be able to adduce evidence in the arbitration proceedings to make out their assertion that the respondents were terminated With Cause. The appellants therefore filed OS 683 on 1 June 2018, seeking the following:

a declaration, pursuant to s 10(3)(b) of the IAA, that the Tribunal had jurisdiction to determine whether the respondents were terminated “Without Cause” for the purposes of the SPA;

in the alternative, a setting aside of the Partial Award with respect to both the appellants pursuant to:

section 24(b) of the IAA, Art 34(2)(a)(ii), Art 34(2)(a)(iii) and/or Art 34(2)(a)(iv) of the Model Law, on the basis that the Tribunal made findings on disputed facts despite the parties’ agreement to reserve the resolution of disputed facts to subsequent hearings; and/or

(ii) section 24(b) of the IAA and/or Art 34(2)(a)(ii) of the Model Law, on the basis that the Tribunal:

(A) decided on an issue that was not pleaded or argued, by drawing a purported distinction between “subject matter identity” and “issue identity” in its decision on issue estoppel;

(B) failed to consider an argument submitted by the appellants against giving the MIC Awards res judicata effect under Singapore law; and/or

(iii) section 24(b) of the IAA, Art 34(2)(a)(ii), and/or Art 34(2)(a)(iii) of the Model Law, on the basis that the Tribunal failed to decide on the merits of the substantive dispute between the parties because it regarded itself bound by the MIC’s determinations; and/or

(iv) Art 34(2)(b)(ii) of the Model Law, on the basis that the Partial Award was in conflict with the public policy of Singapore;

in the further alternative, a setting aside of the Partial Award with respect to BTN only.”

The Singapore Court of Appeal found that the arbitration panel did not commit any errors that justify setting aside the Partial Award. The arbitration panel had a legitimate power to consider the issue of whether the decision of the Malaysian Industrial Court on a material part of the claim is binding on the parties and does not allow the Applicant to reopen this issue again, despite not appearing before the Malaysian Industrial Tribunal.

One of the issues raised by the Applicant was that it was wrong for the arbitration panel to decide on the issue of whether the Malaysian Industrial Court is beyond the scope of the agreement to arbitrate. This was rejected by the Singapore Court of Appeal, where the Court explained that the decision to subject the Applicant to be bound by the decision of the Malaysian Industrial Court is not a decision that touches the jurisdiction of the arbitrators but only bars the litigants from relitigating on the same subject matter more than once:- “[68] In our judgment, a tribunal’s decision on the res judicata effect of a prior decision is not a decision on jurisdiction. This court in Swissbourgh Diamond Mines (Pty) Ltd and others v Kingdom of Lesotho [2019] 1 SLR 263 (“Swissbourgh”) at [207] distinguished between the concepts of jurisdiction and admissibility – jurisdiction refers to “the power of the tribunal to hear a case”, whereas admissibility refers to “whether it is appropriate for the tribunal to hear it”. The significance of the distinction between jurisdiction and admissibility is that a decision of the tribunal in respect of jurisdiction can be reviewed de novo by the supervisory courts at the seat of the arbitration, but a decision of the tribunal, having jurisdiction, on admissibility cannot: BBA and others v BAZ and another appeal [2020] 2 SLR 453 (“BBA v BAZ”) at [73]. 69 As this court explained in BBA v BAZ at [76], the “tribunal versus claim” test applies for the purpose of distinguishing whether an issue goes towards jurisdiction or admissibility. This courtelaborated as follows (at [77]– [79]): [77] The “tribunal versus claim” test asks whether the objection is targeted at the tribunal (in the sense that the claim should not be arbitrated due to a defect in or omission to consent to arbitration), or at the claim (in that the claim itself is defective and should not be raised at all). Jan Paulsson explains the test in these terms … : … To understand whether a challenge pertains to jurisdiction or admissibility, one should imagine that it succeeds: - If the reason for such an outcome would be that the claim could not be brought to the particular forum seized, the issue is ordinarily one of jurisdiction and subject to further recourse. - If the reason would be that the claim should not be heard at all (or at least not yet), the issue is ordinarily one of admissibility and the tribunal’s decision is final. [78] Consent serves as the touchstone of whether an objection is jurisdictional … arguments as to the existence, scope and validity of the arbitration agreement are invariably regarded as jurisdictional, as are questions of the claimant’s standing to bring a claim or the possibility of binding non-signatory respondents … [79] Conversely, admissibility relates to the “nature of the claim, or to particular circumstances connected with it” … It asks whether a tribunal may decline to render a decision on the merits for reasons other than a lack of jurisdiction, and is determined by the tribunal on the basis of their discretion guided by, amongst others, principles of due administration of justice and any applicable external rules … [71] In our judgment, determinations of res judicata issues should likewise be treated as decisions on matters of admissibility, not jurisdiction. In The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal [2015] 5 SLR 1104, in explaining the concepts of res judicata and jurisdiction, this court stated as follows (at [115]): … Res judicata operates against the litigants, and not against the court: it bars the litigants from raising an issue or advancing a contention, and if a party persuades the court that a matter is caught by the doctrine, the court would grant an order giving effect to this; but, the doctrine does not have any effect on the court’s authority to hear the dispute before it and, having heard it, to determine whether or not to uphold the argument that the matter is foreclosed by res judicata. Of course, the court might be mistaken in its assessment of that argument, but that does not convert what might well be an erroneous decision into one which was made without jurisdiction. … We agree with the Judge below that this statement of principle is applicable to decisions made by arbitral tribunals on issues of res judicata as well, as the nature of a res judicata challenge is the same in both court proceedings and in arbitral proceedings. Furthermore, as explained by Gretta Walters in “Fitting a Square Peg into a Round Hole: Do Res Judicata Challenges in International Arbitration Constitute Jurisdictional or Admissibility Problems?” (2012) 29(6) Journal of International Arbitration 651 (“Walters”) at 672 and 675, as a matter of logic, where a party alleges that a dispute has already been resolved and should not be reheard, the party is not attempting to get the dispute resolved in a different forum; rather the party does not want the claim (or part thereof) to be resolved in any forum. In sum, a decision on the issue of res judicata is one of admissibility, and the courts cannot review it on its merits.”

I adopt the same position in this case and find that the approach taken by the Singapore Court of Appeal is correct. As in that case, the arbitrators in this case did not decide on issues that were beyond the scope of the agreement to arbitrate. Instead, they had legitimately exercised their powers to deal with the issue of the admissibility of the right of the claimant to institute the same claim twice or the same issue twice before another tribunal. This determination is essential to prevent an abuse of process and to prevent indefinite litigation.

For the above reasons, I find that the contention that the Plaintiff’s contention that the Malaysian arbitrators had failed to apply Malaysian law and had failed to act within the scope of the agreement to arbitrate or acted beyond the scope of their powers is incorrect.

(ii) Issue 2- Section 37 (1) (a) (iv) – award deals with a dispute not contemplated and not falling within the terms of the submission to arbitration

(iii) Issue 3 – Section 37(1) (a) (v) – award contains decisions on matters beyond the scope of the submission to arbitration

For the reasons stated earlier, I also find that the issues raised by the Plaintiff are not substantiated, and it has failed to prove that the award made by the Malaysian Arbitrators falls foul of section 37(a)(iv) and section 37 (1)(a) (v) of the Arbitration Act

2005.

(iv) Issue 4 – Section 37(2)(a) – the making of the award was affected by fraud or corruption

The Plaintiff contends that the Malaysia Award was affected by fraud or corruption within the meaning of Section 37(2)(a) of the Malaysia Arbitration Act.

It contends that the Award which states that the London Arbitration estops the Plaintiff from raising the same dispute between the litigants before the Malaysian Arbitrators, was procured by fraud as the London Arbitration is premised on agreements and invoices that were fraudulently created by the Defendants. This argument relies on the allegation that the 2 vessels were not at the vicinity at the time when the marine bunker fuel was delivered and that the Plaintiff did not make the said orders for the marine bunker fuel.

Again, I reiterate that when I peruse the London Award, this issue of whether the said contracts for the supply of marine bunker fuel are fraudulent documents and whether the said vessels did receive the marine bunker fuel was dealt with by the London Arbitrators. The Plaintiff had participated in the London Arbitration and produced evidence to support its claim that it did not make any orders for the marine bunker fuel and did not take delivery of the fuel. These allegations were rejected by the London Arbitrators. Excerpts from the Award were produced at paragraph 17 earlier.

I find that the Plaintiff fails to appreciate that the above argument revolves around the merits of the decision of the Malaysian Arbitrators. For the Plaintiff to successfully rely on section 37(2)

of the Arbitration Act, it must show that there is procedural fraud that would have a substantial material effect on the making of the award. This usually arises if there is evidence of perjury, concealment of material evidence or information, or suppression of evidence that would have a substantial effect on the award. See Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another [2021] SGCA 9.

I find that the Plaintiff’s arguments do not fulfill the requirements for the Malaysia Award to be set aside under section 37(2) (a) of the Arbitration Act. I find that the Award was not procured by any fraud or corruption as alleged. The issue raised by the Plaintiff concerns the alleged fraud raised as a defence to challenge the validity of the claims and the jurisdiction in the London Award. Having raised the said issues, the Plaintiff participated in the said London Award and has chosen not to apply to set aside the same Award in the Courts in England and Wales.

Much was also submitted by Counsel for the Plaintiff and he relied substantially on the Lord Mance SCJ in Dallah (supra). However, I find that he misses the material portion of Lord Mance’s judgment that emphasizes the lack of participation in the arbitration challenged by the litigant and the power of the Courts not to recognize the award in the enforcement jurisdiction. Lord Mance’s judgment could not and should not be used as a shield to allow litigants to challenge arbitration award merely by filing a new arbitration.

A litigant who strongly believes that the award is not binding on it should apply to set aside or challenge its jurisdiction or the validity of the award in the supervising Courts or the Courts of enforcement. Any attempt to challenge an arbitration award should not be undertaken by way of a fresh arbitration. A challenge should have been undertaken in accordance with the applicable laws of the seat or the place of enforcement of the award.

This can be seen in the Judgment of Lord Mance SCJ quoted by the Plaintiff’s counsel: -

The Plaintiff’s reliance on the Astro (supra) case in the hope that it could reopen the claim through arbitration is also wrong. The Courts always retained a supervisory jurisdiction as provided in the above-mentioned provisos contained in the Arbitration Act. This supervisory jurisdiction does not extend to a new panel of arbitrators.

Therefore, the argument that the Malaysia Award is tarred by fraud or corruption when the panel agreed that the attempt to reopen the dispute again after the Plaintiff did submit and participated in the London Award is an abuse of process and fall fouls of Res Judicata, is mistaken. I therefore find that the Plaintiff has failed to prove that the requirements of section 37(2) (a) of the Arbitration Act are fulfilled in this case.

Issue 5 – Section 37(2) (b(ii) of the Arbitration Act – breach of natural justice occurred in the making of the award and the tribunal had prejudged the merits of the claim

(vi) Issue 6 – Section 37(1) and Section 37(2) of the Arbitration Act – the award is in breach of the rules of natural justice occurred during the arbitral proceedings and the decision is illogical/defective chain of reasoning, ignored the Plaintiff’s submissions and evidence, and was unable to present its case

This Court had earlier said that the arbitrator is entitled to bifurcate the hearing, and it has the power to hear and determine the issue of Res Judicata first. I repeat that it is a trite law that the arbitrators are masters of their own process.

It is important to reiterate that the Plaintiff’s complaint against the Malaysian Arbitrators is that it was not given an opportunity to present oral evidence and documentary evidence to show (i) that the contract relied on by the Defendants were fraudulently created and did not exists, (ii) it did not make the orders for the marine bunker fuels for the 2 vessels, (iii) that the 2 vessels were not in the vicinity of the waters where the said marine bunker fuel was allegedly supplied to the Plaintiff and (iv) that the terms of the Set Off Agreement is applicable.

This is the same argument that was put forth in the London Arbitration, and the Plaintiff did participate in the said arbitration. Despite initially challenging the jurisdiction of the arbitrators, the Plaintiff continued to actively participate in the said proceeding. Evidence from witnesses that supports the case that it did not make such purchases and the issue of the alleged fraud was produced in the London Arbitration by way of witness statements. The Singaporean Counsel appointed by the Plaintiff was also actively engaged in the said London Arbitration.

This can be seen in the following excerpts from the London

Despite this initial ruling by the London Arbitrators, the Plaintiff chose to participate in the said arbitration. This can be seen from the following excerpts from the Award of the London

In view of the fact that the Plaintiff did, despite the earlier challenge to jurisdiction, submit to the jurisdiction of the London Arbitrators and did participate in the proceedings in London, the Malaysian Arbitrators had correctly decided that the issue of what is the effect of the London Award to the jurisdiction of the new arbitration should be determined first.

I find that the Malaysian arbitrators had considered all of the issues raised by the Plaintiff and found that the London Award is binding on the Plaintiff, and to allow the Plaintiff to relitigate on the same issues that have been dealt with in London would be an abuse of process. None of the Plaintiff’s claims brought in Malaysia could be sustained without overturning the determinations made by the London Arbitrators. The London Arbitrators had correctly pointed out that, despite the challenges and issues raised by the Plaintiff, a successful challenge before the Courts should have been made before the arbitration in Malaysia was instituted to enable the same issue to be raised again in a fresh arbitration.

I also find the argument that the Malaysian arbitrators had ignored the Plaintiff’s argument that it should be heard on its challenge as to jurisdiction of the London Tribunal, and that the London Award that was allegedly commenced without a proper basis was considered appropriately by the Malaysian Tribunal. This can be seen in paragraphs 57 to 96 and 11 to 132 of the Malaysian Award and culminated in the Findings of the arbitrators at paragraphs 97 to 110 as well as at paragraphs 133 to 147. I do not find that the challenges put forth by the Plaintiff that there is a breach of natural justice or that its arguments were wrongly ignored are justified.

What I can see is that the Plaintiff is dissatisfied that the Malaysian Tribunal decided not to regurgitate and accept wholly the arguments put forward by it. This does not mean that there is a breach of natural justice. I refer to Allianz General Insurance Company v Virginia Surety Company Labuan Branch [2020] 5 CLJ 345 and Intraline Resources Sdn Bhd (in liquidation) v ExxonMobil Exploration and Production Malaysia Inc [2017] CLJU 1022 where the Courts have held that “natural justice do not demand that a party is entitled to receive responses to all submissions presented, for only the right to be heard that is fundamental.”

I find that the issues and evidence presented by the Plaintiff at the Malaysian hearing were carefully considered by the tribunal, and the Plaintiff has no cause for complaint that they were not given sufficient opportunity to present their case or that the tribunal had wrongly ignored the issues raised by the litigant.

I also reject that the reasoning of the Malaysia Tribunal was illogical or that the chain of reasoning is not sound. This Court does not sit as an appellate Court and should not normally review the decision of the Tribunal in question. See Pembinaan LCL Sdn Bhd v. SK Styrofoam (M) Sdn Bhd [2007] 3 CLJ 185; [2007] 4 MLJ 113. Nevertheless, I do not find that the Plaintiff has shown any iota of evidence to substantiate this argument. I even confirm that the reasoning and the decision of the Tribunal are in accordance with Malaysian law and is correct.

I further opine that the Plaintiff has failed to prove any form of bias or prejudice by the Malaysia Tribunal. There is no evidence that the Malaysia Tribunal had made any predetermination on the merits of the claim and the issue of Res Judicata, or even the abuse of process defence raised by the Defendant at any stage of the proceedings. I find that parties were given ample opportunity to present their arguments on this matter before the panel of arbitrators.

It must be remembered that this Court does not have the power to review or interfere with the findings made by the tribunal unless the award falls within any of the categories of cases mentioned in Section 37 of the Arbitration Act. I refer to the decision of Azimah Omar JCA in Hindustan Oil Exploration Company Ltd v Hardy Exploration & Production (India) Inc [2023] 5 CLJ 677: - "[80] Specifically, against the plaintiff's contentions regarding the majority award's findings (on the costs chargeable to joint account, the Samson award, and the reconciliation order) it was glaring that the plaintiff’s chief complaint (apart from the time limitation issue) was the arbitral tribunal's endeavor to interpret and give effect to the terms of the JOA and PSC. This endeavor by the arbitral tribunal is entirely an issue and determination on merits. It has nothing to do at all about the procedure or the arbitral tribunal's decision making process. [81] Since the arbitral tribunal has correctly applied the Malaysian limitation laws, the arbitral tribunal's decision-making process is legally sound. Anything else beyond that point is already encroaching into the realm of merit which should not be disturbed by the High Court (which the learned JC has astutely opted not to disturb). The propriety of the defendant's entitlement to the costs chargeable to joint account and the Samson award (as well as the reconciliation order) was critically and extensively examined on its respective merits by the arbitral tribunal and thus, should not be ousted or disturbed by the court. Thus, the plaintiff's attempt to paint the arbitral tribunal's decision on merits as a breach of natural justice, an affront to public policy, and was in excess of its mandate, scope of arbitration, and jurisdiction (by invoking ss. 30, 37(1)(a)(iii), 37(1)(a)(v), 37(1)(b)(ii) and 37(2)(b)) is plainly misconceived (and instead a measure of legalistic acrobatic to cloak the plaintiff's primary intention to have this court re-examine the merits of the arbitral tribunal's decision). Thus, the learned JC was correct to find that the plaintiff's complaints have also encroached into the realm of merits which were beyond the High Court's jurisdiction to re-examine on appeal. [82] Although succinctly, we also must remark that the plaintiff’s suppositions that there has been an affront to public policy (on the principle of international comity) and a breach of natural justice (regarding the reconciliation order) were entirely vague and unclear. It is entirely difficult for us to follow the plaintiff's suppositions that the application of the proper limitation law would be against public policy or that the reconciliation order had deprived the plaintiff its rights to be heard. Even if we were to descend from the bench and enter the arbitral arena (which we should not) and examine the plaintiff's contention on the reconciliation order, it is hard to see the plaintiff's contention of being deprived of its rights to be heard as the reconciliation order was a procedural order for ascertainment of quantum. The reconciliation order stood to give the plaintiff the opportunity to examine whether the defendant had made any excess cash calls against the plaintiff. The reconciliation order as highlighted by the defendant's counsel, was not at all a substantive order determining the rights of parties. It was an order as to the procedure to ascertain and calculate the exact quantum of damages. And only after all parties have had their day before the arbitral tribunal that the tribunal would conclude its reconciliation decision. Thus, the learned JC was correct to find that there hasn't been any deprivation of the plaintiff's right to be heard."

Therefore, I find that the Plaintiff has failed to prove that the Malaysian Arbitrators had committed any of the alleged wrongs claimed by the Plaintiff that justify the setting aside of the Award.

(vii) Issue 6 – Section 37(1)(b) (ii) – award is allegedly in conflict with Malaysia public policy

I also do not find that the Malaysian Award is in conflict with our public policy in any way. In fact, it is part of Malaysia’s policy to prevent abuse of process and to prevent litigants from rehashing the same issues and disputes repeatedly before our Courts or even before any tribunal unless the dispute or issue falls within the exception to the Res Judicata rule or that the decision was set aside by a Court of competent jurisdiction.

This can be seen in the decision of our Courts in Letchumanan a/l Gopal (representative for the estate of Rajammah a/p Muthusamy, deceased) v Pacific Orient & Co Sdn Bhd [2011] 6 MLJ 788, Sykt Sebati Sdn Bhd v Pengarah Jabatan Perhutanan & Anor [2019] 2 MLJ 689 and Scott & English (M) Sdn Bhd v Yung Chen Wood Industries Sdn Bhd [2018] 5 MLJ 204 . It is sufficient that I quote Abdull Hamid Embong JCA in Letchuman Gopal (supra): “[18] Literally translated, res judicata is "the fact has been decided". It expresses a general public interest policy that the same issue (or cause of action) should not be litigated more than once even if the parties are different. It prevents vexatious litigation and any abuse of the courts' process on the premise that final judgments are binding and conclusive. (See Henderson v. Henderson [1843] 3 Hare 100). The criminal law equivalent is the doctrine of double jeopardy.”

The Plaintiff has also not shown any fundamental errors such as blatant disregard of Malaysian case laws and the disregard of the doctrine of stare decisis as in Datuk Bandar Kuala Lumpur v Sri Tinggi Sdn Bhd [2025] 5 CLJ 630 that it could be said that the Malaysian Award has injured Malaysian public policy and should be set aside. The error must be serious and fundamental that to allow the Award to stand will be injurious to the public policy of Malaysia. This could be seen in KHN Trading & Construction Resources Sdn Bhd v Majlis Perbandaran Ampang Jaya [2025] 3 CLJ 771. This will depend on the facts of each case. I find that they do not arise from the facts of this case.

I again refer to the decision of the Singapore Court of Appeal in BTN and another v BTP and another (supra) where Judith Prakash held that the decision by a panel of arbitrators that parties are estopped from reopening a claim that was decided by a previous panel is not against public policy and is in fact a decision on the merits which should not be interfered by a Court under their applicable laws: - “72 Further, in our judgment, there is no basis on which to challenge an award involving an erroneous ruling in respect of an admissibility issue (such as a res judicata issue) that would result in the tribunal considering that it is not able to determine the merits of either party’s position on that issue, on the basis of it being contrary to public policy. Setting such an award aside would undermine the policy of minimal curial intervention, which is a “mainstay of the Model Law and the IAA” (AKN and another v ALC and others and other appeals [2015] 3 SLR 488 at [37]). Well-established considerations underlying this policy include the finality of the arbitral process and the interest in preventing indefinite litigation, which ensure that arbitration’s advantage as an efficient alternative dispute resolution process is not undermined: Soh Beng Tee ([43] supra) at [65(c)]. 73 Accordingly, there is no good reason why erroneous decisions to ascribe res judicata effect to a prior decision should be treated any differently from other errors of law. Enforcement of such awards does not reach the high threshold set out in PT Asuransi at [59] (see above at [56]). Parties are simply being held to the decision of the tribunal they chose for the resolution of disputes between them. In the present case, the Res Judicata Issue was even explicitly and specifically set out in a list of agreed issues for the tribunal’s determination in Procedural Order No 5. In holding that the MIC Awards had res judicata effect, the tribunal was not “delegat[ing] or reserve[ing] matters submitted to it to another to decide”, contrary to the appellants’ assertion, but was deciding the very issue it had been tasked to adjudicate on.”

For the above reasons, I also find that the challenge to the Award by the Plaintiff is not substantiated, and I therefore dismiss the application. The Partial Award, as entered by the Malaysian arbitrators, does not breach any Malaysian public policy. Essentially, the Plaintiff cannot start a new arbitration to challenge the previous award made in another arbitration on the same subject matter. That will fall foul of the principle of Res Judicata. The decision of the Malaysian Arbitrators is therefore correct and this Court does not find any basis to set it aside.

I further opine that the Plaintiff is not without any remedy concerning the London Arbitration Award. As it stands, I find that the Malaysia Award could not be set aside as the challenge does not fall within the categories laid down under section 37 of the Arbitration Act. This does not mean that the Plaintiff cannot challenge the attempt to have the London Award recognized and enforced in Malaysia. See Vernon Ong FCJ’s judgment in Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 9 CLJ

213.

This avenue to challenge and oppose the recognition and enforcement of the London award is still available to the Plaintiff, and I find that this is the effect of the decisions of the Courts cited by the Plaintiff.

Nonetheless, it must be remembered that this is a passive remedy and not an active one. The active remedy provided under the New York Convention scheme is to challenge the award at the seat of arbitration and not by way of a fresh arbitration. One cannot then challenge the validity of the said London Award by filing a new claim in a fresh arbitration. The same can be said of the passive remedy. That is not the mechanism provided under our Arbitration Act, or even in the UK Arbitration Act or even laid down in the Model Law. Please see Lee Swee Seng JCA’s judgment in Tumpuan Megah Development Sdn Bhd v ING Bank NV & Anor [2024] 3 CLJ 18, where he explained the two options (passive and active remedies) that are available to a dissatisfied litigant after receiving an Award made in arbitration.

I therefore find that the issues raised by the Plaintiff do not justify setting aside the Malaysia Award. I find that the Plaintiff’s argument it is still entitled to challenge the validity of the London the London Award through a new arbitration and ignore the existence of the said award is misconceived. This argument is premised on a misunderstanding of the passive remedy to challenge the validity of an arbitration award, as explained earlier.

Furthermore, it would have been wrong for the Malaysian Arbitrator to ignore the London Award in toto as suggested by the Plaintiff. This can be seen in the decision of the Courts in Hong Kong on this issue in W v AW [2021] HKFCI 1707.

In that case, there were 2 arbitration proceedings that were commenced by the parties on the same issue in dispute. The claims were between PY and W ( Party 1”) against AW, BJ AW, and others (“Party 2”). The Hong Kong Court had to deal with the 2 Awards that were made by 2 different panels of arbitrators that were conflicting with each other.

In the First Award dated 13-3-2020, the arbitrators found in favor of Party 1 on their claims against Party 2 for breach of the agreement in dispute and dismissed Party 2’s counterclaim. In the Second Award dated 13-7-2020, the arbitrators found in favour of Party 2’s claim of misrepresentation and allowed the claim for the repayment of the sum of US$ 3, 792, 558.70.

The Hong Kong Court noted that the 2 arbitrations were premised on 2 different agreements. The First Award is premised on the Framework Agreement, whereas the Second Award is based on the Share Redemption Agreement. Nevertheless, both agreements were created in relation to the shareholding of the parties in AW and were part of a series of transactions leading up to a potential acquisition of the company by a China investor in the company.

Party 1 then applied to have the Second Award set aside on the grounds, inter alia, public policy. Party 1 claimed that the Second Award is bound by the findings on common issues already determined in the First Award but they choose to ignore these findings without dealing with the matter of Res Judicata / Issue Estoppel. Party 1 suggested that this is contrary to the principles of fairness, due process and justice. The Second Tribunal is alleged to have breached the public policy and the laws of Hong Kong by ignoring the earlier ruling that was disclosed to it.

Justice Mimmie Chan, in considering the above facts, found that the Second Tribunal did act in breach of the laws and public policy of Hong Kong. This justifies the setting aside of the Second Award. Her ladyship held: - “46. The fact that Tribunal 1 and Tribunal 2 made inconsistent findings, on the same issues of fact and law forming a necessary ingredient in the cause of action of misrepresentation, is in my judgment clear from the Awards. ….

It is of course trite that arbitral awards are final and binding between the parties to the arbitration. In an application to set aside or oppose enforcement of an arbitral award, the Court does not sit on appeal to review the correctness of the award on either facts or law. It may be said that Tribunal 2 was wrong in law to have ignored the principles of issue estoppel, but this is not a ground to set aside Award 2.

However, the Court is concerned with the structural integrity of the arbitral process and the arbitral award. If there is conduct which is serious, or egregious, such that due process is undermined (the conduct described in Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 (CA) at paras 94 and 105), the Court may consider whether the award should be enforced, or set aside on the ground of public policy …

On the facts of this case, I accept that Award 2 is manifestly invalid. It would be contrary to our conceptions of justice to enforce Award 2, and there is substantial injustice arising out of Award 2, by virtue of the findings made in Award 2 which contradicted and were inconsistent with the findings which had already been made by Tribunal 1 on the same issues, and which findings were binding on AW and W, the same parties in the two Awards. This is considered in conjunction with the lack of explanation in Award 2 as to why there were such inconsistent findings, and the failure on the part of Tribunal 2 to give W and AW the opportunity to address Tribunal 2 on Award 1, before Tribunal 2 made its award in Arbitration 2. Material to my decision on the invalidity of Award 2 is the fact that there was a common arbitrator in

Therefore, I find that the Malaysian arbitrators had correctly considered the contents of the London Award and had correctly taken steps to bifurcate the proceedings within their powers to determine whether the said London Award estops the Plaintiff from making any further claims on the same issues. It is up to the Malaysian arbitrators to decide on the merits of the issue of Res Judicata and Issue Estoppel. It would have been wrong for them not to have considered the effect of the London Award. As shown in the Hong Kong case, being made aware of the London Award, it is then incumbent on the Malaysian arbitrators to deal with the said London Award, deliberate and decide whether the parties are bound by it or otherwise.

Overall, I find that there are no reasons why the Malaysian Award should be set aside. The said Award is not contrary to our public policy and does not fall in any of the categories provided under Section 37 of the Arbitration Act.

For the above reasons, the Plaintiff’s Originating Summons is dismissed with costs. Dated 8 August, 2025 (DATO’ INDERA MOHD ARIEF EMRAN BIN ARIFIN) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR NCC5 FEDERAL TERRITORY OF KUALA LUMPUR Counsel: For the Plaintiff : Jeremiah Rais together with Ananthan Nithya Moorthi & Jane Chan Siew Thung Messrs. Steven Thiru For the Defendants : Sharon Chong Tze Ying together with Muhammad Suhaib bin Mohamed Ibrahim