Case Summary : Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd

Nov 11, 2017

Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd

[2016] 1 LNS 1089
YA Lee Swee Seng (High Court) Appeal dismissed in CoA.

Originating Summons: 24C (ARB)-7-02/2015
Arbitration- s 37 AA 2005- delay in giving Award- breach of natural justice- breach of public policy- strike out- s 42 AA 2005- question of law

Brief Facts: The parties, ABF (Employer) & WSB (Contractor) were involved in a construction contract to expand ABF’s bulk area storage capacity in Bintulu. ABF brought an action against WSB in arbitration for not finishing work on time. During the process of Arbitration, there were 27 days of hearings stretched over from 2007 to 2009. Thereafter the learned arbitrator only handed down the Final Award on 26 December 2014. There was some 4 years delay after the date of last submission of the parties. The Arbitrator decided in favour of WSB and dismissed ABF’s claim.

ABF, being dissatisfied with the Final Award, has applied to set aside the Award both under s. 37 of the Arbitration Act 2005 as well as s. 42 AA 2005. The Learned judge upheld the Arbitration Award and dismissed ABF’s application.

Principles held by the Court:

S37 AA 2005

1) Whether a delay of 4 years in delivering the Arbitral Award is a breach of the public policy of Malaysia that justify setting aside the Award.

  • The court held that findings of fact are not automatically to be set aside because a judgment was seriously delayed and is satisfied that the Arbitrator’s ability to decide on the case was not compromised by the delay. ABF could and should have written to the Arbitrator a reminder of the parties’ anxious wait for the Award. Instead, ABF had agreed to the extension of time. The law does not allow a party to adopt a “head we win, tail you lose” attitude nor allow a party to keep the alleged non-adherence to rules “up their sleeve” for later use to challenge the award if it is not in their favour.
  • The Court also observed that there were no specific procedural rules adopted nor was there any specific timeline in which the Arbitrator has to render its Award.

2) Whether the Arbitrator is in breach of natural justice or of any public policy and thus justifying the setting aside of the Award.

  • It was held that even if there be errors of law and fact in respect of the Arbitrator’s determination of these issues, that do not qualify to be a breach of public policy that justify setting aside the Award. An error of law or of fact does not engage the public policy of Malaysia.
  • Both the parties were given sufficient opportunities to present their case and the contents of the Final Award reflected the great care taken by the learned Arbitrator in arriving at his determination. He has considered all the evidence, submissions and deliberated and delivered a reasoned Award.

S42 AA 20015

  • It was held by the Court that the question of law must be a legitimate question of law, and not a question of fact “dressed up” as a question of law. A question of law cannot be premised on facts different from what had been found by the arbitrator. In such a situation, the questions of law would not arise out of the award as they cannot be related to the findings of fact and legal analysis in the award.
  • The arbitrators are the masters of facts. On an appeal the Court must decide any question of law arising from an award on the basis of a full and unqualified acceptance of the findings of fact of the arbitrators. It is irrelevant whether the Court considers those findings of fact to be right or wrong. The mere fact that an arbitrator has chosen an available answer that would not have been preferred by the court reviewing its award in order to arrive at its determination in the third stage will not be a reason justifying judicial interference.


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