A recent Court of Appeal case addressed whether a negative declaratory arbitration award is enforceable. The decision emphasises the narrow grounds that enable the high courts to refuse to recognise or enforce an arbitration award, as long as the requirements of Section 38(2) of the Arbitration Act are complied with. It also establishes a precedent that there is no barrier to the enforcement of a negative declaratory arbitration award.
In a recent Court of Appeal case, the plaintiff sought an injunction to restrain arbitration proceedings between the second, third and fourth defendants, despite the fact that it was not a party to the proceedings. Among other things, the court had to consider whether Sections 10(1)(a) and 10(3) of the Arbitration Act 2005 apply to non-parties to arbitration proceedings and determine the test for accepting an injunction application to restrain arbitration proceedings by non-parties.
The Federal Court recently clarified the high threshold required for an arbitral award to be set aside on grounds of public policy pursuant to Section 37 of the Arbitration Act. According to the court, although public policy is a broad concept, when applying it for the purpose of setting aside an award under Section 37, it should be read narrowly. Further, even where such a conflict with public policy is established, the court's power to set aside an award under Section 37 remains discretionary.
In 2005 the Indian government unsuccessfully applied to the Malaysian courts to set aside a partial award issued by the arbitral tribunal. In 2014 the Indian government issued the defendants with a notice to show cause, prompting the defendants to request the tribunal to be reconvened since there was a dispute on the quantification of sums payable. The tribunal granted the final award and the Indian government applied to the Malaysian High Court to set it aside.
The legal battle between La Kaffa International Co Ltd and Loob Holding Sdn Bhd, which has garnered much public attention, recently made its way to the Court of Appeal. This court's decision clarifies that the Arbitration Act 2005 does not oust the inherent jurisdiction or the powers of the courts to order interim measures. However, by virtue of Section 8, the court will be slow to provide relief which is not clearly spelled out in act.
The Court of Appeal recently considered the law governing a stay of proceedings in relation to non-parties to an arbitration agreement pending the outcome of arbitration proceedings. The court determined that the facts of the case supported the conclusion that the court proceedings involving the non-parties to the arbitration agreement should proceed ahead of the arbitration proceedings between the parties to the arbitration.
The Federal Court recently held that under Section 42 of the Arbitration Act, judicial intervention is warranted only where the award substantially affects the rights of one or more parties. A perverse, unconscionable and unreasonable award is not grounds to set aside the award under Section 42. Further, according to the court, Section 42 provides no jurisdiction to deal with questions of fact.
The Federal Court recently delivered its decision in a dispute involving the Laotian government and two foreign companies. The dispute related to the termination of a project development agreement and was set to be resolved by arbitration. Dissatisfied with the arbitration award, the Laotian government applied to the High Court to set aside the award on the ground that the arbitral tribunal had gone beyond the scope of arbitration.
The high court recently held that resisting an application for an interlocutory injunction is not a 'step in the proceedings'. The only steps that amount to a step in the proceedings under Section 10 of the Arbitration Act are those taken to advance the substantive dispute in the action. Parties' compliance with court directions will not constitute steps to advance the dispute.
The Federal Court recently held that Sections 2(1)(a) and (b) of the Advocates Ordinance must be read with Section 8. The statutory right given to advocates admitted in Sabah to practise in Sabah by virtue of Section 8(1) of the Advocates Ordinance cannot be taken away by tying the non-exclusive right of barristers and solicitors in England to appear for parties in arbitration proceedings with the practice in Sabah.
In a recent case, the plaintiff opposed the defendant's stay application on the basis that, among other things, the ambit of the arbitration clause was confined to disputes arising before and during the completion of the work. The contract did not provide for disputes after completion of the work to be referred to arbitration. Despite the ambiguous clauses, the court upheld the arbitration clause to give effect to the parties' intentions.
A high court recently granted an order approving the defendant's application to stay the court proceedings and have the dispute referred to arbitration pursuant to the Arbitration Act 2005, finding that the plaintiff had, through its conduct, demonstrated that it intended to refer the dispute to arbitration. This case demonstrates the Malaysian courts continued attempts to give effect to arbitration agreements and to discount attempts to renege on agreements to arbitrate by relying on technical objections.
The Federal Court recently ruled in a case involving an arbitration agreement within a production sharing contract. The court held that the term 'venue' was more than a mere reference to the geographical or physical seat and in this respect could be construed as the seat of arbitration. The court also held that the Supreme Court of India's earlier ruling did not bind the parties, as a decision issued by a court without jurisdiction does not give rise to res judicata.
A recent high court decision has set out clear parameters within which an arbitral award can be set aside as a result of an arbitral tribunal acting in excess of its jurisdiction and on the grounds of public policy. The court clarified that an award will be set aside on the basis of public policy only if it causes "actual prejudice" or offends the "fundamental principles of justice and morality".
The Court of Appeal recently held that general words are sufficient for the incorporation of arbitration clauses by way of reference, emphasising the importance of arbitration clauses in commercial contracts and the need to give business efficacy to commercial arrangements. Given the widespread use of arbitration clauses in commercial contracts, this is a welcome decision.
The Malaya High Court recently considered the recognition and enforcement of four Australian awards by a sole Australian arbitrator. The court held that it had no supervisory jurisdiction or power under the Arbitration Act 2005 to inquire into the validity and correctness of awards. In any event, the defendant should have applied to the Australian courts to challenge and review the validity and correctness of the awards.
The Malaya High Court recently considered awards rendered by arbitral tribunals which the parties neither claimed nor pleaded in the arbitral proceedings. The court found that the arbitral tribunal in the case at hand had exceeded its jurisdiction by rendering an award in respect of a matter not claimed or pleaded by the parties and thus amended the award accordingly.
The Court of Appeal recently considered whether the appointment of an arbitrator by an appointing authority can be challenged and, if so, on what basis. The court highlighted that a proper challenge to the appointment of an arbitrator should stem from the Arbitration Act. Further, if an arbitrator needs special knowledge or expertise, this should be made clear to the appointing authority before appointment.
The Federal Court recently considered the applicable limitation periods in respect of the registration and enforcement of arbitral awards. The court concluded that two separate limitation periods apply to arbitral awards from countries which are signatories to the New York Convention. The first is a six-year period for registration and the second is a 12-year period for enforcement.
The Malaysian Court of Appeal has upheld the High Court's grant of a Mareva injunction that froze the assets of six individuals and two companies. This decision bodes well for international arbitration, as the Malaysian court granted an injunction in aid of an injunction in a foreign jurisdiction.