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26 May 2020
In Siemens Industry Software GmbH & Co KG v Jacob & Toralf Consulting Sdn Bhd,(1) the appellant commenced arbitration against a group of respondents in Singapore claiming, among other things, a sum in excess of €3 million. The arbitral tribunal dismissed the appellant's claim in its entirety and awarded costs, fees and expenses in the respondents' favour.
The respondents filed an originating summons pursuant to Section 38 of the Arbitration Act 2005 in a high court to enforce and recognise the entire award as a high court judgment. The appellant did not file a setting-aside application pursuant to Section 39 of the Arbitration Act but instead opposed the originating summons on, among others, the ground that only the dispositive portion of the award (which set out the orders or reliefs) – and not the entire award – could be registered.
The court allowed part of the originating summons, finding that only the dispositive portion of the award and not the entire award could be recognised and enforced.
The court's decision was based on the following grounds:
The respondents appealed to the Court of Appeal, which set aside the high court's order.
The Court of Appeal's decision was based on the following grounds:
The appellant was granted leave to appeal the Court of Appeal's decision on the following question of law:
Whether for the purposes of an application made under section 38 of the Arbitration Act 2005 and Order 69 rule 8 of the Rules of Court 2012 ("Recognition and Enforcement Application"), the recognition and enforcement of an arbitration award by way of entry as a judgment of the High Court of Malaya ought to relate only to the disposition of the said award and not the entire award containing the reasoning, evidentiary and factual findings of the arbitral tribunal?
The Federal Court answered this question in the affirmative and allowed the appeal. It held that the high court had not erred in recognising and enforcing only the dispositive portion of the award as a high court judgment.
The Federal Court's decision was based on the following grounds:
The analogy drawn by Chief Justice of Malaysia Tengku Maimun that the dispositive portion of an arbitration award is akin to a court's judgment or order, whereas the entire award is akin to grounds of judgment, makes legal, practical and logical sense. An enforcement court in, for example, garnishee, writ of seizure and sale or winding-up proceedings would ordinarily be concerned only with the actual order or judgment (or dispositive portion of the award), rather than the grounds of judgment (or the entire award). The chief justice of Malaysia affirmed the practice that, in an application for recognition and enforcement under Section 38 of the Arbitration Act, only the dispositive portion of the award will be incorporated as prayers in the originating summons.
For further information on this topic please contact Lee Xin Div at Gan Partnership by telephone (+603 7931 7060) or email (email@example.com). The Gan Partnership website can be accessed at www.ganlaw.my.
(3) Jacob & Toralf Consulting Sdn Bhd v Siemens Industry Software GmbH & Co KG  2 MLJ 537. Presided by Vernon Ong JCA. The other two members of the panel were Hasnah Hashim and Harmindar Singh JJCA.
(4) Presided by the chief justice of Malaysia. The other four members of the panel were Federal Court Judges Mohd Zawawi Salleh, Idrus Harun, Nallini Pathmanathan and Abdul Rahman Sebli. References were also made to Arbitration in Malaysia: A Practical Guide by Tun Ariffin Zakaria, Datuk Professor Sundra Rajoo and Philip Koh; Atkins Court Forms Malaysia in Civil Proceedings; Originating Summons Number LBN-24-8/7-2013 between CTI Group v International Bulk Carrier SPA; Civil Suit 24 ARB-2-08/2015 between Kerajaan Negeri Selangor v Triumph City Development Sdn Bhd; Caucedo Investments Inc and Anor v Saipem SA  EWHC 3375 (TCC); LR Aivonics Technologies Limited v The Federal Republic of Nigeria  EWHC 1761; and Denmark Skibstekniske Konsulenter A/S Likvidation v Ultrapolis 3000  SGHC 108.
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