IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO. W-02(C)(A) /2016 BETWEEN

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1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO. W-02(C)(A) /2016 BETWEEN 1. JAN DE NUL (MALAYSIA) SDN BHD... APPELLANTS (COMPANY NO K) 2. JAN DE NUL GROUP (SOFIDRA S.A.) AND 1. VINCENT TAN CHEE YIOUN... RESPONDENTS 2. CENTRAL MALAYSIAN PROPERTIES SDN BHD (COMPANY NO X) [Dalam Perkara Mahkamah Tinggi Malaya di Kuala Lumpur] Dalam Wilayah Persekutuan Kuala Lumpur No. Saman Pemula: 24C(ARB)-45-12/2015 Dalam Perkara Seksyen 20, 37(1)(a)(v), 37(1)(b)(ii), 37(2)(b), 37(3) dan 37(4) Akta Timbangtara 2005 Dan Dalam Perkara Aturan 69 Kaedah-Kaedah Mahkamah 2012 Dan Dalam Perkara Timbangtara Di antara Jan De Nul (Malaysia) Sdn Bhd & Jan De Nul Group (Sofidra S.A.) dan Vincent Tan Chee Yioun & Central Malaysian Properties Sdn Bhd Dan Dalam Perkara Awad Muktamad yang diterbitkan pada dan pembetulan 1

2 kepada Awad Muktamad yang diterbitkan pada oleh Penimbangtara- Penimbangtara Professor Lawrence Boo dan Dato Abdul Kadir Sulaiman dan Dr. Michael Pryles. ANTARA 1. JAN DE NUL (MALAYSIA) SDN BHD PEMOHON-PEMOHON (No. Syarikat: K) 2. JAN DE NUL GROUP (SOFIDRA S.A.) DAN 3. VINCENT TAN CHEE YIOUN RESPONDEN-RESPONDEN 4. CENTRAL MALAYSIAN PROPERTIES SDN BHD (No. Syarikat: X) Heard together with IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO. W-02(C)(A) /2016 BETWEEN 1. VINCENT TAN CHEE YIOUN... APPELLANTS 2. CENTRAL MALAYSIAN PROPERTIES SDN BHD (COMPANY NO X) AND 2

3 1. JAN DE NUL (MALAYSIA) SDN BHD... RESPONDENTS (COMPANY NO K) 2. JAN DE NUL GROUP (SOFIDRA S.A.) [Dalam Perkara Mahkamah Tinggi Malaya di Kuala Lumpur] Dalam Wilayah Persekutuan Kuala Lumpur No. Saman Pemula: 24C(ARB)-34-10/2015 Dalam Perkara Seksyen 20, 30 dan 42 Akta Timbangtara 2005 Dan Dalam Perkara Aturan 69 Kaedah-kaedah Mahkamah 2012 Dan Dalam Perkara Timbangtara antara Jan De Nul (Malaysia) Sdn Bhd & Jan De Nul Group (Sofidra S.A.) dan Vincent Tan Chee Yioun & Central Malaysian Properties Sdn Bhd Dan Dalam Perkara Awad Muktamad bertarikh dan oleh Penimbangtara- Penimbangtara Dr. Michael Pryles, Prof. Lawrence Boo dan Dato Abdul Kadir Sulaiman ANTARA 1. VINCENT TAN CHEE YIOUN PLAINTIF-PLAINTIF 2. CENTRAL MALAYSIAN PROPERTIES SDN BHD DAN 1. JAN DE NUL (MALAYSIA) SDN BHD DEFENDAN-DEFENDAN 2. JAN DE NUL GROUP (SOFIDRA S.A.) 3

4 Heard Together With DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02(C)(A) /2016 Antara 1. JAN DE NUL (MALAYSIA) SDN BHD PERAYU-PERAYU 2. JAN DE NUL GROUP (SOFIDRA S.A.) Dan 1. VINCENT TAN CHEE YIOUN RESPONDEN- 2. CENTRAL MALAYSIAN PROPERTY SDN BHD RESPONDEN [Dalam Mahkamah Tinggi Malaya di Kuala Lumpur] Dalam Wilayah Persekutuan Kuala Lumpur No. Saman Pemula: 24C(ARB)-32-10/2015 Dalam Perkara Seksyen 42 Akta Timbangtara 2005 Dan Dalam Perkara Timbangtara antara Jan De Nul (Malaysia) Sdn Bhd dan Jan De Nul Group (Sofidra S.A.) dan Vincent Tan Chee Yioun dan Central Malaysian Properties Sdn Bhd Dan Dalam Perkara Awad Muktamad yang diterbitkan oleh Prof. Lawrence Boo, Dato Abdul Kadir Sulaiman dan Dr. Michael Pryles pada

5 ANTARA 1. JAN DE NUL (MALAYSIA) SDN BHD PEMOHON-PEMOHON 2. JAN DE NUL GROUP (SOFIDRA S.A.) DAN 1. VINCENT TAN CHEE YIOUN RESPONDEN-RESPONDEN 2. CENTRAL MALAYSIAN PROPERTIES SDN BHD Coram: Hamid Sultan bin Abu Backer, JCA Umi Kalthum binti Abdul Majid, JCA Hasnah binti Dato Mohammed Hashim, JCA Hamid Sultan Bin Abu Backer, JCA (Delivering Judgment of The Court) GROUNDS OF JUDGMENT [1] Three appeals arising from one award fixed for hearing on We first heard the cross-appeal in appeal No. W-02(C)(A) /2016 and allowed the cross-appeal in in appeal No. W-02(C)(A) /2016 on In consequence of allowing the cross-appeal, two appeals under section 42 of the Arbitration Act 2005 (AA 2005), i.e. one by the claimant to the arbitration proceedings and the other by the respondent were dismissed with no order as to costs. The only appeal remained to be heard was the appeal No. W-02(C)(A) /2016 related to section 37, filed by the claimant to the arbitration proceedings. 5

6 [2] We heard the appeal on and reserved judgment. We do not wish to set out the facts and issues related to this appeal as it has been admirably set out by the learned High Court judge in great detail and reported as [2016] 1 LNS This appeal must be read with our previous judgment now reported as [2017] 1 LNS 1130 and the judgment of the learned judge. Brief Facts [3] The brief facts in our own words can be summarised as follows: (i) The 1 st appellant was engaged for a reclamation project which is a specialist job. The contract makes them liable in various instances to ensure that they deliver a reclaimed platform from the sea coast. The 2 nd appellant was the guarantor. The 1 st appellant was not able to deliver what was required under the contract notwithstanding that the 1 st appellant as claimant initiated arbitration proceedings for payment of work done. The respondents, the owners of the project filed a counterclaim and the arbitral tribunal found in favour of the respondents and made the following award: (i) JDN validly terminated the Contract; (ii) JDN was responsible, in breach of the Contract, for the Reclamation Failure Incident; (iii) JDN and Sofidra are ordered, jointly and severally, to pay CMP the amount of RM2,789, in respect of CMP's 6

7 counterclaim, plus simple interest on that amount at the rate of 5% from the date of the award until the date of payment; (iv) Each party shall bear equally all the fees and expenses incurred by the KLRCA and the Tribunal; and (v) All other claims of the parties are dismissed. (ii) The appellants filed an application under section 37 of AA 2005 to set aside the award. The appellants case is summarised in their further submissions inter alia as follows: 18. To wit, the Appellants' s. 37 challenge is premised upon the following grounds. At all material times, the battle lines drawn and submitted by the parties to arbitration were simply a contest between design and method of construction. In this respect:- (a) The Appellants' case is that the contract between JDN and CMP is a conventional contract where JDN builds to CMP's design. The need for ground improvement, via staged construction, is an issue of design and needed to be specified and/or communicated. JDN's is not responsible by reason of Clause 7.2(a) of the Contract 28. (b) The Respondents' case is that ground improvement, via staged construction, constitutes a method of construction which is left to be determined by JDN and the Reclamation Failure Incident was caused by JDN purportedly not following its Method Statement / Work Programme. 7

8 (iii) The arbitral tribunal has considered the issues related to the appellants complaint inter alia based on the contract and parties obligations. The learned judge had captured it as follows: [146] Based on the legal test set out above, CMP s learned counsel submitted that JDN s complaint does not meet the high threshold of the Tribunal having made a determination on a new difference that was outside the scope of the submission to Arbitration. JDN s complaint is this: I state that it was never the pleaded cases and/or contention of the parties nor was evidence led on the premise that was decided by the Tribunal, i.e. Staged construction is a design issue, yet JDN bore the responsibility of designing the same. (para 38 of Affidavit in Support of Martin Eric Harms of ) [147] I agree with CMP s submission that this complaint does not amount to a new difference. As recognised by the Tribunal, the case mounted by CMP in their Counterclaim is a simple case of JDN having breached its Contractual obligations in causing the RFI (para 229 of Final Award). The Contract clearly imposed obligations on JDN. [148] These relevant obligations are summarised as follows: 1. Clause 7.1(a) of the Contract requires JDN to, with due care and diligence, design (to the extent required by the Contract), execute and complete the Works and remedy Defects to the satisfaction of the Superintending Officer in accordance with the provisions of the Contract ; 8

9 2. Clause 7.1(a) is to be read with Clause 4.0 of the Coastal Reclamation Specification which required JDN to take cognisance of the relative low strength of the original soil at the reclamation area and to avoid inducing slips, slides, mudwaves, erosion or displacement of the original soil; 3. Clause 7.1(a) is also to be read with Clauses 5.1(a) and (b) of the Conditions which required JDN to submit a works programme identifying the manner in which JDN proposed to carry out the works as well as a method statement describing the arrangement, sequence and method of construction of the works including temporary works; 4. Clause 4.0 of the Coastal Reclamation Specification required JDN to maintain a minimum FOS of 1.2 at all times. 5. Clause 4 of the Instruction to Tenderers required JDN to visit the site and obtain for themselves all other information which may be necessary for making a tender and entering into the Contract to ascertain the matters as to which they will be deemed to have satisfied themselves and the risks and obligations which they are to undertake ; and 6. Clause 4.8 of the Coastal Reclamation Specification similarly required JDN to have acquainted himself with all matters pertaining to risks, contingencies and all circumstances affecting the executions and completing of the Works. 9

10 [149] Learned counsel for CMP emphasized that these clauses were specifically referred to in paragraph 4 of CMP s Defence and Counterclaim dated [150] CMP has a valid point when through their counsel they submitted that the Contract was before the Tribunal. The Tribunal was entitled, and in fact was incumbent, to take cognisance of the Contract and to determine the parties respective obligations. Howsoever the isolated issue of whether staged construction is a design issue is answered, it does not detract the Tribunal from having to determine the overarching issue of whether JDN had breached its Contractual obligations in causing the RFI. With that this Court agrees. [151] In any event, CMP s pleaded case clearly submits a dispute of whether JDN had breached its Contractual obligations in causing the RFI. [152] CMP had in its Defence and Counterclaim dated pleaded as follows: 6.3 CMP states that the Reclamation Failure Incident was caused by a failure by JDN to properly and safely execute the Works, in breach of its contractual obligations Further or alternatively, JDN failed to carry out the Works to any satisfactory quality, with due care and diligence, with reasonable care and skill and/ or in a good workmanlike manner. JDN failed to ensure that the Works were carried out by workmen with reasonable and adequate capability, experience, knowledge and understanding required to execute and complete the Works. Further, the Works that were carried out by JDN 10

11 were not fit for the particular purposes for which they were required i.e. to form a reclaimed platform for the purposes of building the Lido Boulevard Project. In fact, the reclaimed platform collapsed into the sea without any building on it. 6.8 Further or alternatively, the only inference that can be drawn from the circumstances which led to the Reclamation Failure Incident is that JDN was negligent. The Respondents will, therefore, rely on the principle of res ipsa loquitor. [153] JDN had pleaded that: 1. The Contract was a conventional contract with no design and/or fitness for purpose obligations resting upon JDN, express or implied in the Contract; 2. JDN followed the Contract with its Method Statement and Work Programme which were approved; and 3. The design in the Contract did not provide for staged construction as a method. Staged construction was never disclosed to JDN at the material time. (Para 7 in JDN s Reply to Defence). [154] In CMP s Rejoinder to the Reply to the Statement of Defence & Reply to the Defence to the Counterclaim dated , CMP had pleaded as follows: 2.2 The issue for determination was therefore whether it was JDN s obligation to: (a) Ascertain the weak soils conditions at Site; 11

12 (b) Given the weak soils conditions at Site, to calculate and plan the logic, sequence, arrangement and rate of fill during construction to accommodate the need for the Weak Deposits to consolidate and gain shear strength over time; and/or (c) To carry out its works to accommodate the need for the Weak Deposits to consolidate and gain shear strength over time. 2.3 The Respondents aver that it was indeed JDN s obligation, bearing in mind: (a) The terms and conditions of the Contract documents; (b) The Specification Instrumentation; (c) JDN s method Statement and Work Programme; and (d) The experience and expertise of JDN. 2.4 The Respondents will further state that in breach of its contractual obligations, JDN did not take into consideration the sub soils condition and the need for it to gain shear strength over a course of the fill when it: (a) (b) calculated the logic, sequence and rate of its construction works; and/or When it actually carried out its construction works. [155] Furthermore, it was not the Respondents case that it required JDN to only utilise staged construction and that JDN had breached its duties under the Contract or at common law in failing to do so. 12

13 In this regard: the Contract is silent as to the exact method of constructing the intended reclaimed platform. It was for JDN to deliver the works as they saw fit whilst maintaining a FOS of 1.2 and maintaining stability of the works. It was not CMP s case that the reclaimed platform could only have been constructed by staged construction. [156] The geotechnical experts agreed that a stable reclaimed platform, as per CMP s design, was buildable or constructible by adopting an appropriate design and method of construction. It was up to JDN to determine the method in which the reclaimed platform was to be constructed. [157] JDN was contractually obligated to satisfy itself to the sub-soil conditions. The Contract further required JDN to adopt the most appropriate method having regard to the sub-soil conditions which it was expected to be appraised of continuously through monitoring. [158] In any event, JDN s expert agreed under cross-examination that the Soil Investigation Report, provided by CMP to JDN, contained all necessary data to prepare a stability analysis. This in essence meant that such information pertaining to the condition of the seabed was equally available to both CMP and JDN. [159] However, in building the reclaimed platform in the way it did, JDN had failed its contractual obligations and, in doing so, it had also breached its duties of care in tort. This led to the RFI. [160] As such, JDN s contention that the Tribunal had gone beyond its jurisdiction in the Final Award is baseless. [161] Here is a case where every opportunity had been given to JDN to present its case. It is clear that JDN seek to take issue with the merits of the Tribunal s decision, in effect seeking to appeal the 13

14 Final Award to this Court. This is not permitted in a challenge under s. 37 AA In any event, the Tribunal had not committed any error on the matters put into issue by JDN. [162] I cannot agree more with CMP that it was therefore a live issue before the Tribunal whether the Contract was a conventional contract and the legal implications of the same on JDN s responsibilities. The Tribunal had determined this issue, with particular reference to clause 7.2(a) of the Conditions of Contract, in paragraphs 207 and 208 of the Final Award reproduced above. I fail to see, in the light of the above, how the Tribunal could be said to have strayed from the pleaded case and have gone beyond the submission of the parties to the Arbitration. [4] On the issue of natural justice, the learned judge had captured the appellants complaint inter alia as follows: [163] Then there is the issue of a breach of natural justice which JDN, through their learned counsel Mr Rajendra Navaratnam, alleged that the Tribunal had committed. It was submitted that there was a breach of natural justice when the Tribunal: 1. Decided the case on a basis not raised or contemplated by the parties in the arbitration, i.e. JDN bears the responsibility to carry out staged construction and/or ground treatment even though it is found to be a design issue; 2. Summarily dismissed, without notice, the contentions of the parties and/or the parties pleaded case and/or the evidence led in the arbitration hearings as unhelpful; and 14

15 3. Without notice, denied the Applicants an opportunity to be heard and/or a fair opportunity to present its case on the issue upon which the arbitration was decided. [164] In order for JDN to succeed in a complaint of a breach of public policy, JDN must show that the most basic notions of morality and justice would be offended by the Final Award and that the conflict with the public policy of Malaysia is something clearly injurious to the public good in Malaysia. Jurisprudence relating to setting aside of the award under section 37 of AA [5] Section 37 of AA 2005 reads as follows: Application for setting aside 37. (1) An award may be set aside by the High Court only if (a) the party making the application provides proof that (i) 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; (v) subject to subsection (3), the award contains decisions on matters beyond the scope of the submission to arbitration; or 15

16 (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 (b) the High Court finds that (i) 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. (2) Without limiting the generality of subparagraph (1)(b)(ii), an award is in conflict with the public policy of Malaysia where (a) (b) the making of the award was induced or affected by fraud or corruption; or a breach of the rules of natural justice occurred (i) during the arbitral proceedings; or (ii) in connection with the making of the award. (3) 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. (4) 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. (5) 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. 16

17 (6) 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. (7) 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. [6] It is important to note that section 37 is not in pari materia to any of the sections in English Arbitration Act 1996 (EAA 1996). In addition, England is not strictly a Model Law country. England allows the court to intervene on the arbitral award on a number of grounds. There is no provision in England as that of the opening of section 37(1) i.e. An award may be set aside by the Court if in relation to setting aside a domestic award. The provisions of sections 67 and 68 of EAA 1996 give a positive and/or substantive right to the party to challenge the award. At the most the right under section 37, if at all is negative in nature as it is dependent on the courts discretion. Section 37 of AA 2005 does not give a positive right for the parties to challenge the award. Section 37 AA 2005 vests the discretion to the court. The distinction between the English and the Malaysia Act is not one related to an apple and orange but a marble and pumpkin. Counsel, in decided cases often have been instrumental in citing the English cases to seek intervention of the court to interfere in the award. However, most of the Malaysian decisions have not allowed intervention readily and where intervention has been allowed or the jurisprudence advocated has been in favour of intervention the reasoning appears to be convoluted in the light of our section 37 AA 2005 and the difference in sections 67 and 68 of EAA 17

18 1996. For ease of reference, we produce sections 67 and 68 of EAA 1996 which read as follows: 67. Challenging the award: substantive jurisdiction. (1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court (a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or (b) 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). (2) 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. (3) On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order (a) confirm the award, (b) vary the award, or (c) set aside the award in whole or in part. 18

19 (4) The leave of the court is required for any appeal from a decision of the court under this section. 68. Challenging the award: serious irregularity. (1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. 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). (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant (a) failure by the tribunal to comply with section 33 (general duty of tribunal); (b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67); (c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties; (d) failure by the tribunal to deal with all the issues that were put to it; (e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers; (f) uncertainty or ambiguity as to the effect of the award; 19

20 (g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy; (h) failure to comply with the requirements as to the form of the award; or (i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award. (3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may (a) remit the award to the tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration. (4) The leave of the court is required for any appeal from a decision of the court under this section. [7] Even our section 42 is not in pari materia to section 69 EAA 1996, when it relates to appeal in respect of point of law. The jurisprudence in England is to accommodate intervention and the jurisprudence in 20

21 Malaysia for section 42 is to be extremely restrictive in intervention. England also does not have a similar or equivalent provision like section 36 which attempts to bar court intervention per se. For ease of reference, section 69 of EAA 1996 is reproduced which read as follows: 69. Appeal on point of law. (1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal s award shall be considered an agreement to exclude the court s jurisdiction under this section. (2) An appeal shall not be brought under this section except (a) with the agreement of all the other parties to the proceedings, or (b) with the leave of the court. The right to appeal is also subject to the restrictions in section 70(2) and (3). (3) Leave to appeal shall be given only if the court is satisfied (a) that the determination of the question will substantially affect the rights of one or more of the parties, (b) that the question is one which the tribunal was asked to determine, 21

22 (c) that, on the basis of the findings of fact in the award (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and (d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question. (4) An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted. (5) The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required. (6) The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse leave to appeal. (7) On an appeal under this section the court may by order (a) confirm the award, (b) vary the award, (c) remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court s determination, or (d) set aside the award in whole or in part. 22

23 The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration. (8) The decision of the court on an appeal under this section shall be treated as a judgment of the court for the purposes of a further appeal. But no such appeal lies without the leave of the court which shall not be given unless the court considers that the question is one of general importance or is one which for some other special reason should be considered by the Court of Appeal. [8] Appreciating the distinction in our sections 37 and 42 of AA 2005 in relation to EAA 1996, the Court of Appeal in Petronas Penapisan (Melaka) Sdn Bhd v Ahmani Sdn Bhd [2016] 3 CLJ 403, had in simple terms advocated that the test for intervention will be related to one where the award suffer from patent injustice and/or where the award is manifestly unlawful and unconscionable. Parading English judgments in submissions or cases relating to sections 37 or 42 in actual fact have no jurisprudential utility. The test in England can be said to be one related to low threshold to intervene and in Malaysia the legislation has placed a high threshold for intervention, though the threshold to satisfy the grounds stated in section 37 may be low. In Petronas case, the Court of Appeal made the following observations: [7] In Taman Bandar Baru Masai Sdn Bhd v. Dindings Corporation Sdn Bhd [2010] 5 CLJ 83, it was stated: [13] I have no hesitation in saying that in the instant case the provision of the AA 2005 is applicable notwithstanding the Arbitration agreement was made before the AA 2005 came into force i.e. the date 23

24 being 15 March Even assuming that AA 1952 applies, the facts stated by the plaintiff do not permit the intervention of court as Justice KN Segara sitting in the Court of Appeal in the case of Crystal Realty Sdn Bhd v. Tenaga Insurance (Malaysia) Sdn Bhd [2008] 3 CLJ 791, CA have in an articulate manner, in practical terms, put a stop to the interference of court by stating that: The final award of an arbitrator must be viewed in its totality and any error of law on the face of the award must be one that is patent and obvious as to render the award manifestly unlawful and unconscionable to subsist and, thereby, justify the award being set aside. On the facts of this instant appeal, there was no error of law on the face of the final award for the High Court to review. When an arbitrator does not accept any submission made by counsel with regard to any proposition of law, such act or conduct does not render the award infected with an error on its face. Clearly, there was no legal proposition by the arbitrator, forming the basis of the award, which was erroneous. [14] The other appellate judges have readily concurred making the decision a formidable authority in this area of law in contrast to earlier apex decisions. And at p. 98: [20] I will say that draftsmen of provisions such as ss. 8, 9, 37 and 42 have with great ingenuity asserted that court should not interfere with arbitrator's award without out rightly saying so. If they have said so out rightly, it will stand to be unconstitutional. Thus, it will appear that it is going to be difficult to frame any question of law pursuant to AA 2005 when the subject matter of complaint is one which is restricted by ss. 9, 37, or 42 etc. It is now for the courts themselves to restrain from interference unless it is a case of patent injustice which the law permit the court in clear terms to intervene. It is trite that AA 2005 is meant to 24

25 promote one-stop adjudication. In Lesotho Highland Development Authority v. Impregilo Spa [2005] UKHL 43, Lord Steyn sitting in the House of Lords had this to say: I am glad to have arrived at this conclusion. It is consistent with the legislative purpose of the 1996 Act, which is intended to promote one-stop adjudication. If the contrary view of the Court of Appeal had prevailed; it would have opened up many opportunities for challenging awards on the basis that the tribunal exceeded its powers in ruling on the currency of the award. Such decisions are an everyday occurrence in the arbitral world. If the view of the Court of appeal had been upheld, a very serious defect in the machinery of the 1996 Act would have been revealed. The fact that this case has been before courts at three levels and that enforcement of the award has been delayed for more than three years reinforces the importance of the point. [9] Section 37 largely subsumes Article V of the New York Convention. In addition, it has additional features to ensure the award is not set aside. Section 37 grounds relates to arbitral process. The threshold to satisfy the grounds may appear to be low. However, the court is given discretion not to set aside the award notwithstanding the applicant can establish one or more of the grounds set out in section 37. Some of the grounds stated under section 37, if established, may require the court to set aside the award as of right. For example, incapacity of a party to the arbitration agreement or no notice of the arbitration proceedings was given at all. The weaker grounds will relate to such as unable to present the party s case where due opportunity has been given to the parties and award is within the four corners of the principal contract which carries arbitration clause or agreement. [See Lesotho Highland Development Authority v. Impregilo Spa [2005] UKHL 43]. 25

26 [10] In considering whether or not to set aside the award, the court is obliged to look at other provisions of the Act and take a holistic approach as far as practical to sustain the award. Very importantly the court must consider sending the award back to the arbitral tribunal to eliminate the grounds for setting aside. There may be instances where the award cannot be sent back to the tribunal. For example, incapacity of one of the party s to the arbitration agreement or where no notice of arbitration was given, etc. [11] Unlike the New York Convention regime, the Model Law advocates the jurisprudence to ensure the arbitral tribunal delivers an award which is enforceable. The court s role is to ensure substantive integrity of the arbitral process is maintained at all stages. Trivial complaints framed as excess of jurisdiction related to the manner the arbitral tribunal had handled the issues which arose from the substantive contract having the arbitration clause should not be much of a concern for the court in the regime of party autonomy concept. Only violent breaches on the face of record which compromises the integrity of the decision making process should be the cause of concern for the courts. [12] It is now well settled that in Malaysia, the arbitrators award is final, binding and conclusive and can only be challenged in exceptional circumstances. This jurisprudence is unique to Malaysia and is well articulated in section 36 of AA 2005 which reads as follows: An award is final and binding 36. (1) An award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied upon by 26

27 any party by way of defence, set-off or otherwise in any proceedings in any court. (2) The arbitral tribunal shall not vary, amend, correct, review, add to or revoke an award which has been made except as specifically provided for in section 35. [13] In the Malaysian context, section 36 largely closes the door for judicial intervention. Section 36 is not found in the Model Law. In consequence, reliance on other jurisdiction on the scope of intervention will not be helpful. In Taman Bandar Baru Masai Sdn Bhd v Dindings Corporations Si Bhd [2010] 5 CLJ 83 Hamid Sultan Abu Backer JC (as he then was), when dealing with section 36 of the AA 2005 held that: "...AA 2005 makes it compulsory for courts to respect the decision of arbitrators and only minimum intervention is allowed. It is the parties who selected the arbitrator and s. 36 of AA 2005 makes the award final, binding and conclusive. Real proof is required to be shown before the court can meddle with the award." [14] We have read the appeal records and the able submissions of the learned counsel. We do not think it is a fit and proper case for judicial intervention to set aside the award. [15] For reasons stated above, the appeal is dismissed with agreed costs of RM20, subject to allocatur. Deposit is to be refunded. We hereby order so. 27

28 Dated: 24 October 2017 sgd (DATUK DR. HJ. HAMID SULTAN BIN ABU BACKER) Judge Court of Appeal Malaysia. Note: Grounds of judgment subject to correction of error and editorial adjustment etc. Counsel for Appellant: Mr. Rajendra Navaratnam [with Mr. Raja Kumar, Raja Kandan and Mak Hon Pan] Messrs Azman Davidson & Co Peguambela & Peguamcara Suite 13.03, 13 th Floor, Menara Tan & Tan 207 Jalan Tun Razak Kuala Lumpur. [Ref: RN/RKR/MHP/0325/2011P] Counsel for Respondent: Mr. Philip Koh [with Mr. Kamraj Nyagam, Mr. Kent Chai and Ms Dawn Wong] Messrs Mah-Kamaryah & Partners Peguambela & Peguamcara 3A07, Block B, Phileo Damansara II No. 15 Jalan 16/11, Off Jalan Damansara Petaling Jaya Selangor Darul Ehsan. [Ref: LIT (PK/KN/KC)] 28