Yes Travel & Holidays Sdn. Bhd. v Miki Travel (Hong Kong) Limited (WA-12ANCC-88-10/2024)

MIKI TRAVEL (HONG KONG) LIMITED (License No.: 353363)

MIKI TRAVEL SDN. BHD. (Company No.: 539639-T) … RESPONDENTS [In the Session Court At Kuala Lumpur In the Federal Territory of Malaysia] Civil suit No.: WA-A52NCVC-127-02/2024 BETWEEN YES TRAVEL & HOLIDAYS SDN. BHD. (Company No.: 837781-A) ... PLAINTIFF AND 2 1. MIKI TRAVEL (HONG KONG) LIMITED (License No.: 353363)

MIKI TRAVEL SDN. BHD. (Company No.: 539639-T) … DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 1)

This is the Plaintiff/Appellant’s appeal directed against the Sessions Court’s order dated 11 June 2024 staying all proceedings pending reference to arbitration under Section 10 of the Arbitration Act 2005. The Sessions Court held that the dispute arose out of, or in connection with, the Core Business Agreement between the Plaintiff/Appellant and the 1st Defendant/1st Respondent and must therefore be referred to arbitration in Hong Kong pursuant to clause 20 of the Core Business Agreement.

Parties will be referred to as they were at the Sessions Court.

The Plaintiff is a travel agency incorporated in Malaysia. The 1st and 2nd Defendants are inter-related corporate entities under the Miki Group of Companies. The 1st Defendant is incorporated in Hong Kong.

The Plaintiff and the 1st Defendant executed an agreement on 18 April 2022. This agreement is identified as the Core Business Agreement (“CBA”).

5.

The CBA provides for disputes between the parties to be resolved through arbitration. This is how clause 20 of the CBA is worded: 20 GOVERNING LAW AND JURISDICTION This Agreement shall be governed by the laws of Hong Kong Special Administrative Region ("Hong Kong)". Any difference or dispute between the parties concerning the interpretation or validity of this Agreement or the rights and liability of the parties shall be settled by arbitration in Hong Kong. The award thereof shall be final and binding upon the parties. Judgment upon such award may be entered in any court having jurisdiction thereof.

After the CBA was executed by the parties concerned, the Plaintiff made three requests for land arrangement services. When such requests were made, the 1st Defendant would furnish the Plaintiff with corresponding quotations. A dispute arose when the 1st Defendant terminated the land arrangements for the third land arrangement which concerned a group tour to Paris (“Paris Tour”).

This is how the dispute came about. The Plaintiff engaged the 1st Defendant as a service provider to arrange for the Paris Tour on 8 August 2023 involving 54 of the Plaintiff’s customers. On 25 May 2023, an employee of the 2nd Defendant issued an ad-hoc Quotation for the Paris Tour (“Quotation”). The Quotation, prepared by the 2nd Defendant, was issued in the name of the 1st Defendant. The 2nd Defendant’s employee signed the Quotation. As with many such quotations, the quotation contained a clause stating that full payment for the Paris Tour must be made seven days before the tour departure.

About seven days before the departure, a representative of the 2nd Defendant provided a copy of the confirmed itinerary for the Paris Tour to the Plaintiff. It is not in dispute that the Plaintiff made payments by way of initial deposits for the Paris Tour leaving a balance of €9,071.00 to be paid prior to departure.

On 4 August 2023, a representative of the 1st Defendant suddenly demanded payment of €34,805.50 from the Plaintiff. This was a sum allegedly due and owing from the Plaintiff for another tour package handled by the 1st Defendant for the Plaintiff for a trip to London (“UK Tour”). An ultimatum was given for the Plaintiff to pay the sum of €34,805.50 or risk having the Paris Tour cancelled.

There was some back and forth between the parties on their dispute on the payments for the UK Tour. Be that as it may, and to avoid the risk of cancellation of the Paris Tour, the Plaintiff made the balance payment for the Paris Tour to the 1st Defendant. Notwithstanding, the 1st Defendant cancelled the Paris Tour.

The Plaintiff then commenced the present action for damages against both Defendants for losses incurred due to the cancellation of the Paris Tour. The Plaintiff also claims for damages for conspiracy against the Defendants allegedly on the basis that the Defendants conspired between themselves for the sole purpose of injuring the Plaintiff’s business.

The Plaintiff relies on the Quotation for the Paris Tour. The Plaintiff submits that it had at all times dealt with the 2nd Defendant since

The Plaintiff therefore contends that the Quotation, which does not contain any form of dispute resolution clause, forms the basis of the contract between the parties.

The Defendants rely on the CBA executed between the Plaintiff and the 1st Defendant in April 2022. The CBA governs the parties’ commercial relationship relating to land arrangement and tour management services and contains a wide arbitration clause covering “any difference or dispute… concerning the interpretation or validity of this Agreement or the rights and liability of the parties”.

The Sessions Court accepted the Defendants’ submission that the Quotation was issued pursuant to, and operated within, the framework of the CBA. The Sessions Court accordingly stayed proceedings against both Defendants to avoid inconsistent determinations and the multiplicity of forums concerning the causes of action stated in the statement of claim, to wit, the claim for damages and the tort of conspiracy.

The Plaintiff submits, in essence, that: i. the Quotation was a stand-alone contract containing no arbitration clause; ii. the Sessions Court erred in importing the arbitration clause from the CBA; and iii. the claim against the 2nd Defendant is premised upon the tort of conspiracy. Hence, based on this and the fact that the 2nd Defendant is a non-party to the CBA, proceedings against it ought not to be stayed.

The Defendants maintain that the CBA governs the relationship between the Plaintiff and the 1st Defendant. The Quotation is merely a performance-level document arising from the CBA. The claims against the Defendants—contractual and tortious—fall squarely within the CBA arbitration clause. As for the 2nd Defendant, the Defendants rely on Renault SA v. Inokom Corp Sdn. Bhd. & Anor & Other Appeals [2010] 5 MLJ 394 to submit that the action cannot proceed on a piecemeal basis.

I find that two issues arise in this appeal for my determination: i. Whether the Sessions Court erred in holding that the parties are bound by the arbitration clause in the CBA in respect of the present dispute; and ii. Whether the stay of proceedings should extend to the 2nd Defendant.

The Plaintiff argues that the Quotation is an “Ad-Hoc Agreement” and therefore independent of the CBA. I find this argument misplaced.

When examined objectively, unlike the CBA, the Quotation contains no operative terms governing rights, liabilities, default consequences, dispute resolution, or governing law. It merely sets out pricing and itinerary details. The commercial relationship between the parties did not originate with the Quotation; it had already existed under the CBA, which expressly governs the provision of tour services by the 1st Defendant to the Plaintiff.

The consistent course of dealing between the parties, multiple tours arranged pursuant to the CBA prior to the Paris Tour, reinforces that the Quotation functioned only as a demand-level instrument issued pursuant to and within the CBA framework. If I were to accept the Plaintiff’s submissions that the Quotation is the document governing the commercial relationship between the parties, the CBA is then rendered otiose. The parties would be at sixes and sevens to determine the operative terms governing their respective rights, liabilities, default consequences, and the mechanism of dispute resolution.

As for the claim against the 2nd Defendant, the Plaintiff relied on the decision of the Court of Appeal in Gise Kam Kwan International Trade Ltd v. Antara Steel Mills Sdn. Bhd. [2024] 6 MLJ 662.

The facts in Gise are these. Gise sued Antara Steel in court to recover sums under a Termination and Settlement Agreement (“TSA”). Antara Steel applied for a stay under Section 10 of the Arbitration Act 2005, arguing that although the TSA had no arbitration clause, it incorporated by reference the arbitration clauses found in the parties’ earlier 2009 and 2013 main agreements. The High Court agreed and granted a stay pending reference to arbitration.

Gise appealed, inter alia, seeking a determination of whether the arbitration clause in the main agreements was incorporated into the TSA and whether the TSA operated as a stand-alone agreement superseding earlier agreements.

The Court of Appeal allowed the appeal. The Court of Appeal held that the operative part of the TSA did not refer to the earlier agreements which had the arbitration clause. Hence, the arbitration clause could not be said to have been ‘incorporated by reference’ in the TSA. It was the operative part of the TSA that was binding on the parties, and there was clearly no reference to the main agreements there. A reference to it in the recitals for context was ineffective in incorporating the arbitration agreement found in the main agreements into the TSA.

The Court of Appeal also found that the parties expressly drafted a new dispute resolution clause in the TSA which demonstrated a clear intention not to rely on the prior arbitration agreement. This reflected a deliberate shift away from arbitration. The absence of any reference to the earlier agreements, combined with the introduction of a fresh dispute resolution mechanism, strongly indicated that the parties intended to discard arbitration entirely for disputes arising under the TSA.

In this regard, Gise is distinguishable and inapplicable to the factual matrix of the present appeal. In Gise, the later termination and settlement agreement contained a new and mutually exclusive dispute-resolution clause that clearly superseded the arbitration clause in the earlier agreements. Here, the Quotation contains no such clause, nor any indication of superseding intention. The CBA has not been terminated. The factual matrix in the present case does not permit the inference that the parties intended to discard the arbitration clause in the CBA.

Clause 20 of the CBA extends to “any difference or dispute… concerning the rights and liability of the parties”. The Plaintiff’s dispute, to wit, complaint of wrongful termination of tour arrangements arises directly from the provision of services under the CBA. Even the tortious allegations of conspiracy are predicated on the same factual matrix.

In this regard, the 2nd Defendant is a coordination office assisting the 1st Defendant. The Plaintiff’s allegations against the 2nd Defendant are derivative of, and inseparable from, the allegations against the 1st Defendant. Seen in the proper context, the Plaintiff clearly acknowledges that the gravamen of the claim is against the 1st Defendant. All material allegations concerning the arrangement of the Paris Tour are directed against the 1st Defendant. Likewise, the act of cancellation of the Paris Tour is also directed against the 1st Defendant. It will immediately be seen that, going by the pleaded case, the party controlling the tours to be arranged is the 1st Defendant. The 2nd Defendant is but a coordinating agent of the 1st Defendant, acting under the dictates and direction of the 1st Defendant.

In Renault SA v. Inokom Corp Sdn Bhd & Anor & Other Appeals [2010] 5 MLJ 394, the Court of Appeal held that where the substance of a dispute falls within an arbitration agreement, a plaintiff should not circumvent arbitration by adding a non-party defendant so as to litigate obligations that are fundamentally referable to arbitration. The Court of Appeal cautioned that a devious attempt to circumvent arbitration by instituting an action against parties not subject to the arbitration clause should not be encouraged.

In Protasco Bhd v. Tey Por Yee & Another Appeal [2018] 5 CLJ 299, the Court of Appeal held that arbitration agreements should be interpreted broadly. Claims for conspiracy to defraud or injure and the imposition of a constructive trust fall within the scope of the arbitration clause. The Court agreed that rational business parties would prefer to have their entire dispute resolved by an arbitration tribunal rather than just the portion related to a contract dispute.

In Tomolugen Holdings Ltd and another v. Silica Investors Ltd and other appeals [2015] SGCA 57 [2016] 1 SLR 373 (cited with approval by the Federal Court in Jaya Sudhir a/l Jayaram v. Nautical Supreme Sdn. Bhd. & Ors [2019] 5 MLJ 1), the Singapore Court of Appeal had occasion to consider a similar situation where a dispute involved parties who were not subject to an arbitration agreement but otherwise were linked to a dispute that was the subject of an arbitration agreement.

The Singapore Court of Appeal referred to the New Zealand High Court’s decision in Danone Asia Pacific Holdings Pte Ltd v. Fonterra Cooperative Group Limited [2014] NZHC 1681 (“Danone v. Fonterra”). In Danone v. Fonterra, the Court held that: “… [T]he Court retains jurisdiction to stay the proceedings ... under ... its inherent jurisdiction including for reasons of sensible case management. Parties do not enjoy an unfettered right to access the Courts; rather, the Court is entitled to impose procedures that are appropriate in the circumstances, having regard to the nature and content of the litigation as a whole. The jurisdiction to do so, however, should only be exercised in rare and compelling circumstances. There must be a real risk of unfairness or oppression to the defendant if the proceedings were allowed to continue. Considerations of cost, convenience, and the interests of justice must weigh in favour of a stay. The onus is on the applicant to satisfy the Court that such circumstances exist.”

The Court, in Danone v. Fonterra, considered a number of factors when determining whether to grant the stay, including (at [56]): a) the relationship between the parties to the court proceedings and the parties to the arbitration; b) the claims in the court proceedings and those in the arbitration, and the respective issues which they raised; c) issue estoppel; d) the risk of inconsistent findings between the two sets of proceedings; e) the risk of delay; and f) cost.

The Singapore Court of Appeal held that: “This does not mean that if part of a dispute is sent for arbitration, the court proceedings relating to the rest of the dispute will be stayed as a matter of course. The court must in every case aim to strike a balance between three higher-order concerns that may pull in different considerations: first, a plaintiff’s right to choose whom he wants to sue and where; second, the court’s desire to prevent a plaintiff from circumventing the operation of an arbitration clause; and third, the court’s inherent power to manage its processes to prevent an abuse of process and ensure the efficient and fair resolution of disputes. The balance that is struck must ultimately serve the ends of justice. In this regard, we consider that the court’s discretion to stay court proceedings pending the resolution of a related arbitration, at the request of parties who are not subject to the arbitration agreement in question, can in turn be made subject to the agreement of those parties to be bound by any applicable findings that may be made by the arbitral tribunal. We also think that the set of factors considered by Venning J in Danone v Fonterra … offers a comprehensive (although by no means exhaustive) and instructive guide for courts faced with the scenario of overlap described …above”

In the present case, the claim against the 2nd Defendant is premised upon the tort of conspiracy. The conspiracy is allegedly between the 1st and the 2nd Defendant. If the arbitration between the Plaintiff and the 1st Defendant results in a finding that the termination of the Paris Tour is valid, the claim on conspiracy involving the 2nd Defendant falls.

Hence, a common-sense approach must be undertaken by the Court to strike a balance to meet the ends of justice. It follows that a stay against the 2nd Defendant is therefore not merely necessary but warranted to avoid inconsistent findings and overlap of claims between the disputing parties. This results in giving full effect to the arbitration mechanism.

Based on the authorities, I found that the dispute resolution mechanism that is valid, enforceable, and operative is as set out in the CBA. It follows that Section 9 and Section 10 of the Arbitration Act 2005 mandate the Court to refer the dispute between the parties to arbitration as contractually agreed by the parties (see: Tindak Murni Sdn. Bhd. v. Juang Setia Sdn. Bhd. & Another Appeal [2020] 4 CLJ 301). The Court is not to delve into the respective merits of the claim and the defence (see: TNB Fuel Services Sdn. Bhd. v. China National Coal Group Corp [2013] 4 MLJ 857).

Having perused the record of appeal and submissions, I find no appealable error in the Sessions Court’s determination that the dispute is governed by the arbitration clause in the CBA, that the Quotation does not constitute a stand-alone agreement capable of displacing the CBA, and that the stay properly extends to the 2nd Defendant to avoid fragmented litigation.

The Sessions Court correctly applied Section 10 of the Arbitration Act 2005 and the authorities that are plainly binding upon it. The threshold under Section 10 is low, and once an arbitration agreement is shown to exist and the dispute is prima facie arbitrable, the Court must stay proceedings. That threshold is met here.

Based on those reasons, I dismissed the Plaintiff’s appeal with costs and affirmed the orders made by the Sessions Court. Dated the 15th day of December 2025 -sgd- ……………………………………………………………………… MUHAMMAD ADAM @ EDWARD BIN ABDULLAH Judicial Commissioner High Court (Commercial Division NCC 4) High Court of Kuala Lumpur In the Federal Territory, Malaysia Counsel for the Plaintiff/Appellant : Ian Hannibal Messr. Phang Tham Teoh & Co Counsel for the Defendants/Respondents: Chew Yen Lin Messr. Dason Raj & Partners

Renault SA v. Inokom Corp Sdn. Bhd. & Anor & Other Appeals [2010] 5 MLJ 394 2. Gise Kam Kwan International Trade Ltd v. Antara Steel Mills Sdn. Bhd. [2024] 6 MLJ 662 3. Protasco Bhd v. Tey Por Yee & Another Appeal [2018] 5 CLJ 299 4. Tomolugen Holdings Ltd and another v. Silica Investors Ltd and other appeals [2015] SGCA 57 [2016] 1 SLR 373 5. Jaya Sudhir a/l Jayaram v. Nautical Supreme Sdn. Bhd. & Ors [2019] 5 MLJ 1 6. Danone Asia Pacific Holdings Pte Ltd v. Fonterra Cooperative Group Limited [2014] NZHC 1681 7. Tindak Murni Sdn. Bhd. v. Juang Setia Sdn. Bh.d & Another Appeal [2020] 4 CLJ 301 8. TNB Fuel Services Sdn. Bhd. v. China National Coal Group Corp [2013] 4 MLJ 857

Section 9 and Section 10 of the Arbitration Act 2005