KDN No.: PP8686/07/2013(032886)

MIArb N E W S L E T T E R

The Newsletter of The Malaysian Institute of Arbitrators

ISSUE 2/2015

ContentsNote From President 1

Past Events 3

Article: Third Party Funding:Is it The Way Forward? 4

Case Notes 7

Article: The Federal Court inCIDB v Konsortium JGCCorporation & Ors– An Overview and Analysis 14

Article: Diffusing Dynamite:Staying Adjudication DecisionsUnder Section 16 of CIPAA 20

Events Feature 26

Upcoming Events 29

New Members/Upgradesfor Session May 2015to November 2015 30

Dear Members,I took over as President of our Institute in June this year from Mr Lam Ko Luen. GivenMr Lam’s and his Council’s achievements during the past two years, your Counciland I have big shoes to fill. We will nevertheless endeavour to meet, if not exceedyour expectations of the Institute and the benefits of being a member.

This is our second newsletter of 2015; put together by our Editor and CouncilMember, Joshua Chong. This issue contains interesting and informative articles andcase commentaries and notes that I trust you will find useful. I thank the contributorsfor their time and effort. This issue also covers some events organised and/orparticipated by the Institute between May 2015 and November 2015.

On 4 June 2015, Nick Powell from Axiom Consultants spoke to us on ‘ExpertWitnesses: A Bare Knuckle Price Fight or Can We Do Better?’. On 28 July 2015, Ir.Lai Sze Ching from IEM gave a talk on ‘Performance Bonds: Can On-DemandBonds be Stopped?’ at the Institute. I thank Mr. Powell and Ir. Lai for taking the timeto give us an engaging talk on pertinent topics.

The Institute, in collaboration with Brickfields Asia College, successfully conductedthe Diploma in International Arbitration programme in August and September 2015.The course was well attended. I thank the speakers who contributed their time andeffort in making this recent intake a success. Special thanks goes to Shirley Horwho contributed extensively as course coordinator and speaker for the lectures.

In October 2015, the Institute, in collaboration with Pertubuhan Akitek Malaysia,Royal Institution of Surveyors, Malaysia and The Institution of Engineers, Malaysia(DRP Subcommittee) organised the Joint Courses on Alternative Dispute Resolutionfor Practitioners. The Course was a two-day course on arbitration, adjudication,mediation and a discussion on common issues in construction contractmanagement. The Joint Course was very well received. The Institute conducted thecourse entitled, ‘Arbitration: Practical Aspects’. I would like to thank Ms SharonChong for contributing as a speaker for the course.

The Institute also launched its Facebook page in August this year. The aim of ourFacebook page is to enhance our reach with our members and to bettercommunicate the activities of the Institute to our members. My sincere thanks andappreciation goes to Gregory Das for putting the page together and its on-goingadministration.

I wish to thank the Council Members for their tireless effort and support in carryingout our duties during the past six months.

I also encourage all members to continue playing an active role in the activities ofthe Institute and to support its initiatives for the betterment of the practice in Malaysia.

Thank you.

Kevin PrakashPresident

Note From President

Editor: Joshua Chong Wan Ken Senior Associate, Construction & EnergyMessrs Raja, Darryl & Loh, Kuala Lumpur

Contributors: Mr. Kevin Prakash, Ms. Hoh Foong May

Ms. Magdalene Soon Yi Lian, Ms. Sharon Chong Tze Ying

Mr. Gregory Das

Risk

& Strategy

A B

D C

Disputes &

Claims

Arbitration &

Adjudication

Contract

Administration

Expert

Witness

Axiom Consultants Sdn Bhd (468455-M) J-5-8, Jalan Solaris Solaris Mont Kiara

50480 Kuala Lumpur Tel:03-6203 6890 Fax: 03-6203 6891

www.axmco.com

Council (2015 – 2016) President

Kevin Prakash

Deputy President Sudharsanan Thillainathan

Vice President Hor Shirley

Honourary Secretary Victoria Loi

Honourary Treasurer Wong Wee Hong

Immediate Past President Lam Ko Luen

Council Members Joshua Chong Wan Ken

Lynnda Lim Mee Wan Karen Ng Gek Suan

Sharon Chong Tze YingGregory Das

Publisher The Malaysian Institute of Arbitrators Unit 508, Lobby 2, 5th Floor, Block A

Damansara IntanNo. 1, Jalan SS20/2747400 Petaling Jaya

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Disclaimer Views expressed are not necessarily those of theMalaysian Institute of Arbitrators (MIArb). MIArb bears noresponsibility for any action taken based on theinformation published in this newsletter and neither shallMIArb be liable for any product or service advertised inthe same. Nothing in this newsletter is to be consideredlegal advice. No part of this publication may bereproduced without the written permission of MIArb.

ContributionsArticles and other materials of interest for publication infuture issues are welcomed. MIArb reserves the right toedit or decline any materials submitted.

This newsletter is available on our website:www.miarb.com. We encourage members toforward this newsletter to interested individuals.We welcome feedback from readers; pleaseemail info@miarb.com

4.6.2015Talk on “Expert Witnesses: A Bare Knuckle Prize Fight of CanWe Do Better?”

28.7.2015Talk on “Performance Bonds: Can On-Demand Bonds beStopped?”

15.10.2015 & 22.10.2015The Joint Course on Alternative Dispute Resolution forPractitioners

24.10.2015CIArb Centennial Anniversary Dinner

Past Events2015

4

Third Party Funding:Is it The Way Forward?

by Kevin PrakashLLB (Hons), CLP, LLM (Hons)President of MIArb, Partner, Mohanadass Partnership

Third party funding has lately drawn differingviewpoints from various quarters. The generalconsensus however appears to favour thetraditional approach, with a clear reluctance

to embrace a situation where a third party with noconnection to the proceedings may fund a litigant’scase in exchange for a share of any sum awarded.

The classic case of British Cash & Parcel Conveyorsv Lamson Store Service Co. describes the conceptof third party funding as comprising bothmaintenance and champerty1. In the said case, theterm ‘maintenance’ is described as the wanton andofficious intermeddling with the disputes of others inwhich the maintainer has no interest whatsoever, andwhere the assistance he renders to the one or theother party is without justification or excuse.2

‘Champerty’, on the other hand, is really maintenancebut with a share in the spoils of the litigation.3

Contrary to the Malaysian position, it may be notedthat the concept of third party funding is welldeveloped in other Commonwealth jurisdictions,such as Australia, the United Kingdom, Canada,South Africa, and New Zealand. It is also widelypractised in the United States.

1 British Cash & Parcel Conveyors v Lamson Store Service Co [1908] 1 KB 1006 at 1014.

2 British Cash at 1014

3 Per Lord Mustill in Giles v Thompson [1994] 1 AC 142, 161

5

As a matter of law, third party funding is prohibitedhere in Malaysia. The High Court, in the case ofAmal Bakti Sdn Bhd & Ors v Milan Auto (M) SdnBhd & Ors4, refused to entertain a champertyagreement on grounds of public policy. See alsoof Mastika Jaya Timber Sdn Bhd v Shankra A/LRam Pohumall5, where it has been held thatpublic policy is offended by a champertousagreement because of its tendency to pervert thedue course of justice. In Re Trepca Mines Ltd(No.2)6, Lord Denning explained this public policyin the following oft cited passage at 219-220:

“The reason why the common lawcondemns champerty is because of theabuses to which it may give rise. Thecommon law fears that the champertousmaintainer might be tempted, for hisown personal gain, to inflame thedamages, to suppress evidence, oreven to suborn witnesses. These fearsmay be exaggerated; but, be that so ornot, the law for centuries has declaredchamperty to be unlawful, and wecannot do otherwise than enforce thelaw.”

In addition to the above, Section 112 of the LegalProfession Act 1976, which is applicable toadvocates and solicitors practising in WestMalaysia, provides that no advocate shall enterinto any agreement which stipulates for orcontemplates payment only in the event ofsuccess in such suit, action or proceeding(commonly known as a contingency feeagreement).

4 [2009] 5 MLJ 95

5 [2010] MLJU 301

6 [1963] Ch 199

6

Despite the tilt towards the traditional approachdescribed above, the concept of third partyfunding is gaining traction whereby it is seen as ameans to assist a litigant in pursuing a meritoriousclaim7. There is growing opinion that a litigant oreven companies facing insolvency or bankruptcyshould not be shut out from seeking justice dueto want of funding.

Further, the ever-increasing costs of courtlitigation and arbitration appear to be acontributing factor in favouring external funding.In particular, a litigant with limited funding may notbe able to pursue or defend a claim in a complexinternational arbitration involving multiple parties,a protracted discovery exercise and expensiveexpert testimony. Arbitration in particular appearsto be attractive to third-party funders given theenforceability of arbitration awards acrossjurisdictions. An attractive middle ground perhapsmay be to permit third party funding in arbitrationalone.

The Malaysian Bar appears to adopt the positionthat the rule against maintenance and champerty isintended to uphold and ensure the professionalismof lawyers in the conduct of matters entrusted tothem. This is to ensure that the administration ofjustice is not commercialised. This cautiousapproach underscores the Malaysian position thusfar. I do agree with this position. The questionhowever is whether we should look forward byadopting a less rigid approach to third party fundingat least for arbitration.

As a way forward, I propose that a thoroughconsultative process should be taken by the variousstakeholders to assess the utility of the third partyfunding model in Malaysia. Regulation would be keyto ensure that the feared side effects of third partyfunding are kept in check. While it remains of utmostimportance that the principles of the profession areupheld without any compromise, we shouldconsider embracing this change if we are todevelop our arbitration practice here.

7 David S. Abrams & Daniel L. Chen, “A Market for Justice: A First Empirical Look at Third Party Litigation Funding”, 15 U. PA. J. BUS. L. 1075 (2013)

There is growingopinion that a litigantor even companiesfacing insolvency orbankruptcy shouldnot be shut out fromseeking justice dueto want of funding.

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Case Notesby Gregory Das LL.B (Hons), Barrister-At-LawAssociate, Shook Lin & Bok,Council Member of MIArb

-Arbitration-Section 42 of theArbitration Act 2005Scope of a challenge against anarbitrator’s decisionChallenging an arbitrator’sdecision on the quantum ofdamages to be awarded to aninnocent contracting party.

In Chain Cycle Sdn. Bhd. v. KerajaanMalaysia (Civil Appeal No.: W-01(C)(A)-379-09/2014), the Court of Appeal wasrequired to decide upon a challengeagainst an arbitrator’s decision on thepropriety of the termination of aconstruction contract and the quantumof damages to be awarded as a result ofa breach of the contract.

The Appellant contracted with theRespondent for the design, construction,testing and commission of a solid wastetreatment plant in Labuan. The contractcontained certain performancespecifications for the treatment plant,which required there to be a periodicaltest of, amongst others, the capacity ofthe plant to treat a specified tonnage ofwaste.

The plant failed to meet the performancespecifications at its first testing andcommissioning. Following theimplementation of certain designmodifications, the plant underwent asecond testing and re-commissioning.The plant again failed to meet theperformance specifications under thecontract.

The Appellant declined to undertakefurther testing and commissioning for theplant. The Respondent thereafterterminated the contract. The Appellantthen instituted arbitral proceedingsagainst the Respondent to challenge thesaid termination of the contract. Inresponse, the Respondent filed acounterclaim that alleged that theAppellant had itself breached thecontract in view of the non-functionalstate of the plant.

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The arbitrator upheld the Respondent’s terminationof the contract and dismissed the Appellant’s claimand, further, allowed the Respondent’scounterclaim. The Appellant then challenged thearbitrator’s decision at the High Court underSections 37 and 42 of the Arbitration Act 2005.The High Court affirmed the arbitrator’s findings butdecreased the quantum of damages awarded tothe Respondent for its counterclaim.

The Appellant appealed against the High Court’sdecision and the Respondent cross-appealedagainst the variation of the quantum of damagesthat it was awarded. The Court of Appealunanimously dismissed the appeal and allowed theRespondent’s cross-appeal.

In so doing, the Court of Appeal made somesignificant remarks on the scope of a challengeagainst an arbitrator’s award under Section 42 ofthe Arbitration Act 2005.

In this respect, there was much discussion on theextent to which a party could challenge anarbitrator’s decision on a specific matter that hadbeen referred to him, such as the interpretation ofa contract. This point arose because part of theAppellant’s challenge in the case involved aninvitation to scrutinise the nature of the contractualrelationship between the Appellant and theRespondent.

The Respondent relied on the principle known asthe ‘Absalom Exception’ (derived from the case ofAbsalom Ltd. v. Great Western (London) GardenVillage Society Ltd. [1933] AC 592) to argue that itwas not open to the Appellant to challenge thearbitrator’s interpretation of the contract betweenthe parties.

In this regard, it is to be noted that the ‘AbsalomException’ precludes a party from challenging anarbitral tribunal’s decision on a matter referred to itsave for instances where the decision underchallenge amounted to an error of law “on the faceof the award”.

In response, the Appellant argued that the‘Absalom Exception’ was no longer of applicationin view of Section 42 of the Arbitration Act 2005.In this connection, it was contended that Section42 had expanded the scope of a challenge againstan arbitral award by permitting the courts tointerfere with an arbitrator’s decision that containedan error of law that arose “out of the award”.

...the ‘AbsalomException’

precludes aparty from

challenging anarbitral tribunal’s

decision on amatter referred

to it ...

9

The Court ofAppeal disagreed

with the Appellantand held that the

‘AbsalomException’

remained to beapplicable

notwithstandingthe advent of

Section 42.

The Court of Appeal disagreed with the Appellantand held that the ‘Absalom Exception’ remained tobe applicable notwithstanding the advent of Section42. On this point, George Varghese JCA observedthat the preservation of the ‘Absalom Exception’ wasnecessary to ensure that references of questions oflaw pursuant to Section 42 were “not turned into awholesale ‘appeal’ against the arbitral tribunal’sdecision or ruling”. His Lordship proceeded to findthat the Appellant was not entitled to revive the issuerelated to the nature of its contractual relationshipwith the Respondent and that the High Court hadcorrectly declined to entertain the challengepremised on this issue.

The Court of Appeal then found the High Court tohave correctly upheld the arbitrator’s finding that thecontract had been lawfully terminated. In this regard,the Court of Appeal rejected the Appellant’sargument that the contract could only be terminatedonce the plant had successfully fulfilled itsperformance specifications under the contract. Thiswas in view of the appellate court’s ruling that sucha construction of the contract was contrary to thecommercial intent that underpinned the agreementbetween the parties.

Further, the Appellant argued that the Respondenthad unlawfully terminated the contract as theAppellant had substantially performed its contractualobligations. On this matter, the Court of Appeal heldthat the issue of the extent to which a party haddischarged its duties under a contract was an issueof fact that could not form the basis of a challengeunder Section 42. It was observed that the onlymatter that was open for consideration on this issuewas whether the arbitrator had correctly identified thelegal principles that were to be applied. In thisconnection, it was held that neither the arbitrator northe High Court had erred in their respectivedecisions on the matter of the Appellant’sperformance under the contract.

Lastly, on the issue of the quantum of damages tobe awarded for the Respondent’s counterclaim, theCourt of Appeal held that the determination of theappropriate figure to be paid in damages was aquestion of fact that was within the exclusiveprovince of the arbitrator to decide. It was furtherheld that the arbitrator had addressed his mind tothe correct principles of law and thereafterappropriately decided upon a reasonablecompensatory sum to be awarded to theRespondent as a result of the Appellant’s breach.

10

It followed that the Court of Appeal agreed with theRespondent that the High Court had incorrectlyreduced the sum in damages that was due to it. Inthis regard, the Court of Appeal found that the HighCourt had acted in excess of its powers inreassessing and varying the arbitrator’s decision onthe quantum of damages to be awarded as the saidmatter involved a pure issue of fact that the arbitratorwas best placed to determine.

-Arbitration-Scope of Section 42 of theArbitration Act 2005Challenging an arbitrator’s decision onthe fees payable for the workundertaken by a civil engineer in abuilding project.

The Court of Appeal in Brunsfield ProjectManagement Sdn. Bhd. v. Ingeniur BersekutuConsulting Engineers (Civil Appeal No.:W-02(C)(A)-1786-10/2014) was required to decide upon achallenge against an arbitrator’s findings on theprofessional fees that were payable to a firm ofengineers for their work in a building project.

The appeal arose from the Appellant’s challengeagainst an arbitral award pursuant to Sections 37and 42 of the Arbitration Act 2005. In 2009, theAppellant project developer entered into an oralagreement with the Respondent firm of engineersto engage the latter’s engineering design andconsultancy services for a building project. TheAppellant became dissatisfied with the services ofthe Respondent and consequentially terminated theagreement in 2011. The Respondent had issued aseries of invoices to the Appellant for the work thatit had undertaken prior to the termination whichincluded a set of professional fees that werepremised on the BEM Scale of Fees (Revised 1998)(“the BEM Scale of Fees”).The Appellant disputedthe invoices on the grounds, amongst others, thatit had not agreed to adopt the BEM Scale of Feesas part of the agreement.

The Respondent commenced arbitral proceedingsto challenge the Appellant’s termination of theagreement. In January 2014, a single arbitratorallowed the Respondent’s claim and held thetermination of the agreement to be unlawful. Further,the arbitrator found that the parties were not bound

by the BEM Scale of Fees and instead held thereasonable fee percentage for the Respondent’sservices to be 1.25% of the total cost ofconstruction.

The Appellant’s subsequent challenge against theentire award under Sections 37 and 42 of theArbitration Act 2005 was dismissed by the HighCourt. The Appellant then appealed to the Court ofAppeal.

The Court of Appeal unanimously dismissed theappeal and made some significant observations onthe scope of a challenge against an arbitral awardon a reference of questions of law.

At the Court of Appeal, the Appellant advancedthree arguments, namely; that the High Court haderroneously perceived the Appellant’s challenge tobe exclusively premised on Section 37(1), that theJudge should have held that the arbitrator had

The Court of Appeal......made some significantobservations on thescope of a challengeagainst an arbitral awardon a reference ofquestions of law.

11

acted wrongfully in arbitrarily awarding damages thatwere predicated on the fee percentage of 1.25% ofthe total construction costs and, further, that theproper remedy should have been for damages to beawarded on a quantum meruit basis.

The Court of Appeal first held that the High Court hadcorrectly appreciated the twofold challenge of theAppellant’s application to have been founded uponSections 42 as well as 37 of the Arbitration Act 2005.

Then, Idrus bin Harun JCA held that the determinationof the fee percentage of 1.25% of the totalconstruction costs was not arbitrary and had insteadresulted from the arbitrator’s consideration of,amongst others, the evidence tendered by theparties. In this regard, it was held that the arbitratorhad appropriately decided upon a reasonable feepercentage from a review of the fee proposalssubmitted by the Respondent (to which the Appellantdid not respond), the BEM Scale of Fees (which thearbitrator held merely to be a guide) and, further,following his own assessment of a reasonable feepercentage from his own experience in theengineering industry.

Further, the Court of Appeal found that the High Courthad correctly declined to interfere with the arbitrator’sfindings on a reasonable fee percentage in the caseas the same were “unqualified findings of fact” inrespect of which a Court of law should not intervene.

Ultimately, and significantly, it was observed inemphatic terms that the Appellant’s challenge wasessentially a reference of questions of fact which hadthe effect of inviting “the High Court to have anotherlook at these documents and second-guess thearbitrator’s decision”. It was stated that suchchallenges were beyond the scope of Section 42 ofthe Arbitration Act 2005.

Moreover, the Court of Appeal observed that thequestions, which related to the appropriate feepercentage in the case, did not meet theadditional threshold imposed by Section 42(1A),which required the questions posed in such an

Ultimately, andsignificantly, it was

observed inemphatic terms

that the Appellant’schallenge was

essentially areference of

questions of factwhich had the

effect of inviting“the High Court tohave another look

at thesedocuments and

second-guess thearbitrator’sdecision”.

12

application to substantially affect the rights of theparties. In this regard, it was stated that thequestions merely affected the Appellant’s ability tosettle the fees due to the Respondent, asopposed to substantially or significantly affectingthe Appellant’s rights in the dispute.

-Arbitration-Section 42 of theArbitration Act 2005Challenging an arbitrator’s decision onthe interpretation of a commercialagreement and the validity of theallotment of shares.

In Far East Holdings Bhd. & Another v. MajlisUgama Islam Dan Adat Resam Melayu Pahang(Civil Appeal No.:W-02(NCC)(A)-2672-12/2013)and two related appeals (Civil Appeal No.:W-02(NCC)(A)-2781-12/2013 and Civil Appeal No.:W-02(NCC)(A)-2671-12/2013), the Court ofAppeal was invited to decide upon thesustainability of an arbitrator’s interpretation of acommercial agreement and the findings relatedthereto on the propriety of an allotment of sharesto a majority shareholder of a company.

The Majlis Ugama Islam Dan Adat Resam MelayuPahang (“MUIP”) required an independent sourceof funds to discharge its functions pursuant to theAdministration of Islamic Law Enactment 1991. Inthis regard, the State Government of Pahangapproved the alienation of an 11,000 acre plot of

land (“the said land”) to MUIP for the latter’s useto generate the funds required.

MUIP intended to develop the said land into anoil palm estate. MUIP therefore entered intodiscussions with Far East Holdings Bhd. (“FEH”)in view of the latter’s experience in oil palmcultivation. The discussions culminated in theexecution of an agreement between MUIP, FEHand Kampung Aur Oil Palm (Co) Sdn. Bhd.(“KAOP”), which was a wholly owned subsidiaryof FEH (“the said agreement”). Pursuant to thesaid agreement, KAOP incorporated MadahPerkasa Sdn. Bhd. (“MPSB”) to develop the saidland into an oil palm estate and the said landwas thereafter registered under MPSB.Subsequently, in accordance with the saidagreement, KAOP allotted in excess of 8 millionshares of its shares to MUIP in consideration forthe transfer of the said land. This led to MUIPhaving a 33% shareholding in KAOP, with FEHowning the 67% remainder of the shareholdingin KAOP.

Under the said agreement, MUIP was entitled toexercise two options to acquire additional sharesin MUIP. The first option allowed MUIP to acquire16% of FEH’s shares in KAOP and the secondoption entitled MUIP to the acquisition of afurther 11% of FEH’s shares in KAOP.

Next, it must be noted that FEH advanced aRM22.09 million loan to KAOP to finance theproject under the said agreement.

the Court of Appeal was invited to decideupon the sustainability of an arbitrator’s

interpretation of a commercial agreementand the findings related thereto on thepropriety of an allotment of shares to a

majority shareholder of a company.

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Now, at a Board of Directors meeting in April1997, the Board of KAOP agreed to the increaseof the share capital of KAOP to 50 million sharesand, further, to the allotment of 22 millionadditional shares in KAOP to FEH (“the impugnedallotment of shares”).

The impugned allotment of shares led to theinstitution of a suit by MUIP to challenge the saidallotment on the grounds that it diluted MUIP’sshareholding in KAOP and, further, that it wasviolative of the said agreement. The suit wassubsequently stayed in view of a clause under thesaid agreement that required the dispute inquestion to be referred to arbitration.

MUIP then commenced arbitral proceedingsagainst FEH and KAOP in respect of theimpugned allotment of shares. A single arbitratorallowed MUIP’s claim and, amongst others, struckdown the said allotment, ordered FEH to payMUIP damages in the sum of an excess of RM77million (for loss of dividends up to 2010) andordered the payment of pre-arbitral award interestat 4% per annum and post-arbitral award interestat 4% per annum.

FEH and KAOP then filed an application underSection 42 of the Arbitration Act 2005 tochallenge the arbitral award. Moreover, MUIP filedan application to register the award.

The High Court dismissed the Section 42application and upheld the arbitral award, but setaside the arbitrator’s decision to award pre andpost award interest. The High Court also allowedMUIP’s application to register the award.

FEH and KAOP then appealed against thedecisions of the High Court and the Court ofAppeal unanimously dismissed the appeals.

On appeal, FEH and KAOP argued that thearbitrator erred in his interpretation of the saidagreement. In this regard, it was contended thatthe arbitrator had erroneously found that the saidagreement contemplated that MUIP wouldultimately acquire 60% of the shares of KAOP andthat the impugned allotment of shares wascontrary to the intent of the agreement. FEH andKAOP argued that MUIP had nothing more thantwo options that entitled it to 60% of the sharesof KAOP, which would only come into effect uponthe exercise of the said options.

It was also argued that the arbitrator haderroneously relied on the fact that there was nospecific provision under the said agreement thatallowed FEH to finance the project under the saidagreement through the subscription of additionalshares to KAOP. In this connection, FEH andKAOP argued that the said agreement did notpreclude them from increasing the share capitalof KAOP and therefore the impugned allotment ofshares was valid.

In dismissing the appeal, the Court of Appeal heldthat the decision of the arbitrator on thesubstantive issues was premised on findings offact derived from the evidence tendered at thearbitration. These findings, it was observed, wereneither perverse nor manifestly unlawful to warrantinterference.

The Court of Appeal then observed that thearbitrator had correctly interpreted the saidagreement by applying the “business commonsense approach” of contractual interpretation. Inthis regard, it was held that the parties intendedthat MUIP would own 60% of the shares in KAOPafter the two options had been exercised and,further, that it was not within the contemplation ofthe parties that there would be changes to theshare capital of KAOP pending the exercise of theoptions. Therefore, the Court held that anychanges to the share capital of KAOP, particularlychanges that were adverse to one of thecontracting parties, required the consent of theparties to the contract, which was not obtained inthe present case.

Moreover, the Court of Appeal held that the rightof FEH and KAOP to increase their authorised andpaid up capital had to be circumscribed by thelegal and contractual obligations that they hadwith third parties (i.e. with MUIP under the saidagreement).

Lastly, the High Court’s decision to set aside thearbitrator’s award of pre and post award interestwas upheld. In this respect, the Court of Appealheld that the arbitrator had acted in excess of hisjurisdiction by awarding pre-award interest as theArbitration Act 2005 does not provide for theaward of the same. Further, Aziah Ali JCAimpugned the award of post-award interest asMUIP did not expressly pray for the award of suchinterest in its pleadings.

14

The Federal Court recently had theopportunity to consider and determineimportant questions of law on theconstruction of the Lembaga Pembangunan

Industri Pembinaan Malaysia Act 1994 (“CIDB Act”)and the Construction Industry (Collection of Levy)Regulations 1996 (“1996 Regulations”).

Parties

The plaintiff/appellant was a statutory body knownas Lembaga Pembangunan Industri PembinaanMalaysia or Construction Industry DevelopmentMalaysia (“CIDB”) incorporated under the CIDB Act.In essence, it is a regulatory body for theconstruction Industry in Malaysia with relatedpowers to issue licenses, collect levies forconstruction works, impose fines for breaches, andother powers.

The defendant/respondent was a consortiumconsisting of foreign and local companies(“Consortium”), which was awarded a contractworth US$1,481,254,000 plus Euro €59,640,000to participate in a Liquefied Natural Gas PlantProject at Bintulu (“MLNG Tiga”) through theauspices of PETRONAS (“Contract”). The workconsisted of offshore and onshore works.

CIDB imposed a levy on the Consortium pursuantto Section 34 of the CIDB Act and ConstructionIndustry (Collection of Levy) Regulations 1996(“1996 Regulations”). The Consortium, however,

by Sharon Chong Tze Ying LLB (Hons), CLP, FCIArb, FMIArbPartner, SkrineCouncil Member of MIArb

The Federal Court in CIDBv Konsortium JGCCorporation & Ors– An Overview and Analysis

15

paid only a portion of the levy. They contended thatoffshore works and non-construction works underthe project did not attract levy. CIDB brought thisaction to claim for the full amount of the levy, andthe Consortium counterclaimed for declaratoryorders to negate CIDB’s claim. Both parties agreedfor the issues to be determined pursuant to Order14A of the then Rules of the High Court 1980. Order14A was a provision for an application to dispose acase on a point of law.

The core issue in this case was whether levy underthe CIDB Act and 1996 Regulations had to be paidby the Consortium for “offshore works” or “non-construction works” (like engineering design,procurement, commissioning, managementservices) in respect of the MLNG Tiga Plant Projectinvolving the construction of a liquefied natural gasplant in Sibu, Sarawak that was owned byPETRONAS.

High Court Decision1

Hamid Sultan Abu Backer J (as his Lordship thenwas) held that CIDB had construed the CIDB Actand the relevant documents wrongly and haddetermined and imposed an incorrect levy amount(according to Regulation 6 of the 1996 Regulations)on the Consortium. In substance, the LearnedJudge’s grounds were as follows:

First, Section 1(2) of the CIDB Act clearly states thatthe “Act shall apply throughout Malaysia”. Given thatthe other provisions of the CIDB Act does notencompass extra territorial jurisdiction, any form ofwork done outside Malaysia would not fall within theambit of the Act.

Second, the Learned Judge held that offshoreworks and/or non-construction works fall outsidethe definition of “construction works” as found inSection 2 of the CIDB Act (and hence are outsidethe ambit of Section 34). His Lordship said that the

CIDB brought this action to claim for thefull amount of the levy, and the Consortiumcounterclaimed for declaratory orders tonegate CIDB’s claim.

16

levy under Section 34 of the CIDB Act is restrictedto the construction works component of theContract, and hence, excludes non-constructionworks such as engineering, procurement,supervision, management and other ancillaryservices. Also, non-construction works performedoffshore such as engineering, procurement,supervision, management, equipment andmaterials supplied on a FOB basis and otherancillary services are excluded.

Third, Regulation 6 of the 1996 Regulationsimplicitly recognises that there will be contracts ofwhich construction works form only a part, andfurther recognises that the “non-constructionworks” portions of such contracts will not besubject to the levy.

With regard to the construction of taxing statutes,the Learned Judge said that it is a well settledprinciple of law that the language of a statuteimposing a tax, duty or charge must receive a strictconstruction in the sense that there is no room forany intendment, and regard must be had to theclear meaning of the words.

Court Of Appeal Decision2

The Court of Appeal agreed with the High Court’sfindings and conclusions, and dismissed CIDB’sappeal against the High Court decision. The Courtof Appeal held that it is trite that a taxing statutehas to be strictly construed. The introduction ofSection 17A of the Interpretation Acts 1948 and1967 (“Interpretation Acts”) which enjoins apurposive reading to be taken when interpreting astatute, has not relaxed this rule. That purposivereading will require the Court to bear in mind thatthe Court is interpreting a taxing statute where thelaw requires a strict reading in favour of thetaxpayer.

In construing the meaning of “construction works”which is defined in Section 2 of the CIDB Act, theCourt of Appeal said that on a strict and plain

reading of the words in Section 2 of the CIDBAct and applying the principle of noscitur asociis (the meaning of a word may be knownfrom the accompanying words), the other worksforming an integral part of those activities (i.e.the engineering design performed offshore)could not on the facts be accepted as fallingwithin the definition of “construction works”. TheCourt of Appeal also considered the fact thatthe procurement by the offshore JV was doneoffshore on a FOB basis where property in thematerials passed to the Owner at the port ofshipment. The Court concluded that there couldnot arise any question of liability to pay levy onthese particular procurement activities in anyevent.

On the issue of ‘extra-territorial’ effect of theCIDB Act, the Court of Appeal was of theopinion that Section 1(2) of the CIDB Act, whichprovides that the Act “shall apply throughoutMalaysia”, is “obviously territorial in effect”. It istrite that the statute must expressly state that ithas an extra-territorial effect. However, the Courtof Appeal noted that there is no such provisionin the CIDB Act.

1 Lembaga Pembangunan Industri Pembinaan Malaysia v Konsortium JGC Corporation & Ors [2011] 7 CLJ 46.

2 Lembaga Pembangunan Industri Pembinaan Malaysia v Konsortium JGC Corporation & Ors [2015] 5 CLJ 157 (CA).

3 Lembaga Pembangunan Industri Pembinaan Malaysia v Konsortium JGC Corporation & Ors [2015] 9 CLJ 273 (FC).

The Court ofAppeal held thatit is trite that ataxing statutehas to be strictlyconstrued.

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Federal Court Decision3

CIDB obtained leave to appeal to the FederalCourt on the following questions of law:

Question 1

Whether CIDB has construed the CIDB Act andthe relevant documents wrongly and determinedand imposed an incorrect levy amount (accordingthe Regulation 6 of the 1996 Regulations) inparticular:-

(i) Whether construction works doneoffshore as part of construction workswithin Malaysia fall within the definition of“construction works” as found in Section2 of the CIDB Act (and hence are outsidethe ambit of Section 34) given that suchworks are to be performed outsideMalaysia;

(ii) Whether the imposition of the levy underSection 34 of the CIDB Act excludes thenon-construction components of aconstruction work, namely engineering,procurement, supervision, management,and other ancillary services;

(iii) Whether the imposition of the levy underSection 34 of the CIDB Act excludes non-construction works performed offshoresuch as engineering, procurement,supervision, management, equipmentand materials supplied on an FOB basis,and other ancillary services; and

(iv) Whether or not the Contract is in fact asupply contract, which was consolidatedinto one contract for convenience andefficiency; and if so whether the supply

contract should be subject to a levy underthe CIDB Act.

Question 2

Whether CIDB is entitled to interestnotwithstanding that the CIDB Act does notprovide for interest and if so, how is the interest tobe calculated?”

At the outset, the Federal Court said that in anOrder 14A application, it is crucial that all thenecessary and material facts relating to the subjectmatter of the question have been duly proved oradmitted. There must be no substantial factualdisputes left to be resolved. On the present facts,the only remaining dispute was on the constructionof a provision of the CIDB Act, the 1996Regulations and the interpretation to be given tothe contractual documents, namely the letter ofaward, the Engineering, Procurement,Construction and Commissioning (“EPCC”)contract and the consortium agreement.

The Federal Court answered Questions 1(i) and (iv)in the positive while Questions 1(ii) and (iii) wereanswered in the negative. As for Question 2, theFederal Court refrained from answering it as CIDBdid not submit on it.

On the issue of the construction of a taxing statute;while the Federal Court’s opinion was substantiallythe same with the Courts below, the Federal Courtdeparted from the Court of Appeal’s caution thatSection 17A of the Interpretation Acts has notrelaxed the rule of interpreting taxing statutes, andsaid that “taxing statutes like all other statutes mustbe given a purposive interpretation to fulfil theobjective of the statute, unless the circumstancesdemand otherwise”.

It is trite that the statute must expresslystate that it has an extra-territorial effect.However, the Court of Appeal noted that

there is no such provision in the CIDB Act.

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The Courts below accepted that the Contractwas an EPCC Contract with the scope of workand project specifications spelt out clearly. TheEPCC Contract had divided the contract priceinto two components – the offshore and onshoreprices. The Court of Appeal also accepted thatthe Owner, MLNG Tiga had written to CIDB toclarify expressly the respective scope of works ofthe offshore and onshore entities and expressedMLNG Tiga’s understanding of the legal position.The legal position was that, in addition to theengineering services, the equipment andmaterials purchased on behalf of owner on aFOB basis should not be subject to CIDB levy,and that only the contract price for the“construction works”, which will be payable toMalaysian incorporated members should beused as the calculation base of CIDB levy on theproject.

On this issue, the Federal Court took an entirelydifferent view and found that the Contract was alump sum turnkey contract and hence notdivisible. The Federal Court found no justificationto split the contract sum into different parts,according to the work done by the individualmember contractors. The Federal Court went on

to state that although a contractual transactionmay involve a series of transactions it maynevertheless be a single transaction for levypurposes. On the present facts, looking at thescheme in the EPCC contract as a whole, it wasa single transaction.

On this issue, theFederal Court tookan entirely differentview and found thatthe Contract was alump sum turnkeycontract and hencenot divisible.

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The Federal Court further held that going by thenatural meaning, the engineering designprocurement works that form part of the‘construction works’ include all ‘integral andpreparatory’ work that will lead to a successfulperformance of the contract. It was opined that“surely no construction works may be carried outsatisfactorily without the requisite design, drawings,supervision or planning preceding it”.

As for the issue of whether the CIDB Act has anexterritorial application, the Federal Court held thatin the circumstances of the case, as thecommercial transaction was undertaken throughthe Consortium, a tax presence was created withinMalaysia to enable a levy to be imposed. The levywas on the contract sum to be paid in Malaysia tothe registered contractor’s accounts i.e., theConsortium, and not to individual Consortiummembers.

It is noteworthy that the Lembaga PembangunanIndustri Pembinaan Malaysia (Amendment) Act2011 (“CIDB Amendment Act”) received the RoyalAssent on 26 August 2011 and was gazetted on15 September 2011, but has not come into forceas yet. Under the CIDB Amendment Act 2011, thedefinition of “construction works” will include the“procurement of construction materials, equipmentof workers, necessarily required for any work”described in the definition of “construction works”.The definition of the “construction industry” will alsoinclude “design, manufacturing, technology,material and workmanship and services forpurposes of construction”. It is the author’s viewthat the CIDB Amendment Act was clearly passed

by Parliament to address the specific issuesdecided by the High Court and to confer widerpowers on CIDB to impose levy beyond thedefinition of construction works or the constructionindustry as provided for in the current CIDB Act.This author submits that the amendments areuseful as an aid of construction as the un-amended Section 34 of the CIDB Act cannot besaid to have the same effect as the amendedSection 34. It is trite that Parliament could not andwould not have intended to carry out a pointlessexercise in amending Section 34 of the CIDB Actonly for it to still have the same meaning; theprinciple of statutory interpretation summarised as“Parliament does not act in vain”.

Conclusion

This decision is significant in that the CIDB Act andthe 1966 Regulations have been construed toconfer on CIDB the power to impose a levy notonly on onshore construction works, but also for“offshore works” or “non-construction works”.Parties seeking to enter into EPCC contractsshould now take note that their contracts may beviewed as indivisible lump sum turnkey contractsand the entire contract sum is subject to levy. Thisis especially so in the light of the amendmentsmade to Section 34 pursuant to the CIDBAmendment Act 2011. Nonetheless, if one wereto apply the Federal Court’s interpretation to thecurrent CIDB Act, there may be no materialdifference between the current law and the newAmendment Act 2011. This begs the question inthe author’s mind: “Why fix it if it isn’t broken?” HasParliament in fact acted in vain?

Under the CIDB Amendment Act 2011, thedefinition of “construction works” will include

the “procurement of construction materials,equipment of workers, necessarily required for

any work” described in the definition of“construction works”.

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Diffusing Dynamite:Staying Adjudication DecisionsUnder Section 16 of CIPAA

by Hoh Foong MayLL.B (Hons)Associate, Messrs Raja, Darryl & Loh

by Magdalene Soon Yi LianLL.B (Hons), CLPAssociate, Messrs Raja, Darryl & Loh

A. Introduction

The Construction Industry Payment andAdjudication Act (CIPAA) 2012 (“Act”) hadcome into force on 15.4.2014. The primaryobject of the Act is to afford speedy disposal

of payment disputes on a temporary note of finalityand to ensure that successful claimants are paidpromptly. Although an adjudication decision is onlyprovisional in nature, it is binding on the parties untiland unless it is set aside by the Court under Section15 of the Act, the subject matter of the decision issettled by a written agreement between the parties,or the dispute is finally decided by arbitration or theCourt, and this is expressly provided under Section13 of the Act. This is also in line with the principlethat a successful claimant ought not to be deprivedof the fruits of his litigation, and under the Act, hisadjudication.

The object of the Act is further strengthened by theprovisions relating to enforcement of adjudicationdecisions as stipulated under Sections 28 to 31 ofthe Act. In this regard, if a respondent has failed topay the adjudicated sum, a successful claimant maytake appropriate enforcement measures to enforcean adjudication decision as if it is a judgment or orderof the High Court (Section 28); may suspend

Section 16(1) ofthe Act permits aparty to apply tothe High Court fora stay of anadjudicationdecision and theCourt may grantsuch order underSection 16(2).

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performance or reduce the rate of progress ofperformance of his work (Section 29); may makea written request for payment of the adjudicatedamount directly from the principal of the partyagainst whom the adjudication decision is made(Section 30); or may even exercise any or all of theremedies provided under the Act concurrently toenforce the adjudication decision (Section 31).

Notwithstanding the above, the Court retains thepower to grant stay of an adjudication decisionunder Section 16 of the Act. Section 16 reads asfollows:

(1) A party may apply to the High Court for a stayof an adjudication decision in the followingcircumstances:

(a) An application to set aside the adjudicationdecision under Section 15 has been made;or

(b) The subject matter of the adjudicationdecision is pending final determination byarbitration or the court.

(2) The High Court may grant a stay of theadjudication decision or order the adjudicatedamount or part of it to be deposited with theDirector of the KLRCA or make any other orderas it thinks fit.

Section 16(1) of the Act permits a party to apply tothe High Court for a stay of an adjudication decisionand the Court may grant such order under Section16(2). A stay of an adjudication decision is in effect

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a stay of the enforcement of the adjudicationdecision without which it would be open to thesuccessful claimant to enforce the adjudicationdecision under the relevant provisions under the Actas mentioned above.

As the primary objective of this Act is to providespeedy disposal of payment dispute and to ensureprompt payment to the successful claimant, theCourt will need to strike a balance betweenParliament’s clear intention as well as the rights andlegitimate concerns of an applicant when exercisingits discretion under Section 16(2) of the Act. In thisconnection, we will analyse some of the recentcases that have considered and decided on Section16 of the Act.

B. Stay of AdjudicationDecision under Section16 of the Act

It should be noted that Section 16 of the Act isunique and peculiar only to the Act in the sense thatthere is no equivalent or similar provision in thestatutory regimes of other jurisdictions withadjudication, be it the Housing Grants, Constructionand Regeneration Act 1996 in the UK, the Buildingand Construction Industry Security of Payment Act2004 in Singapore, or the Building and ConstructionIndustry Security of Payment Act 1999 in New SouthWales, Australia.

Be that as it may, the principles decided in cases inthose jurisdictions may be a useful guide to our localCourts in deciding under Section 16 of the Act, asthe purpose of the Act is similar to the adjudicationlegislation in the other jurisdictions, i.e. to ensurespeedy disposal of payment disputes and thatsuccessful claimants are paid and paid promptly.

The High Court in Subang Skypark Sdn Bhd vArcradius Sdn Bhd [2015] MLJU 286 had in factreferred to cases in the jurisdictions of the UK andSingapore, and then agreed and applied the relevantprinciples when considering whether or not to granta stay under Section 16 of the Act as decided inthose cases.

It appears from the reading of Section 16(1) of theAct that an application for a stay of an adjudicationdecision may only be initiated in somewhat limitedcircumstances. There are only two circumstanceswhere Section 16(1) can be invoked, and this isaffirmed in the High Court decisions of Subang

Skypark Sdn Bhd v Arcradius Sdn Bhd [2015]MLJU 286 and Foster Wheeler E & C (Malaysia)Sdn Bhd v Arkema Thiochemicals Sdn Bhd[2015] 1 LNS 632, that is:

a. where an application to set aside theadjudication decision under Section 15 of theAct has been made; or

b. where the subject matter of the adjudicationdecision is pending final determination byarbitration or the court.

In order to qualify a Plaintiff to make an applicationfor stay under Section 16(1), one of the abovemust be satisfied and at the date of the stayapplication; it must either be that the setting asideof the adjudication decision has already been filedin Court or the arbitration or Court proceedingshave already been commenced (See: FosterWheeler E & C (Malaysia) Sdn Bhd v ArkemaThiochemicals Sdn Bhd [2015] 1 LNS 632).

In our opinion, some uncertainty seems to appearin the case of Bina Puri Construction Sdn Bhd vHing Nyit Enterprise Sdn Bhd [2015] 1 LNS 305,the relevant part reads below:

“Although in the instance application, theapplicant only cited limb (b), in the writtensubmissions counsel for applicant alsorelied on limb (a). In my opinion, relianceof limb (b) is flawed for two reasons. Thefirst reason is that at the date of theinstant application, the applicant has notapplied to set aside the Adjudication

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Decision. Under limb (b), an existingapplication to set aside the AdjudicationDecision appears to be a pre-condition.”

Reading the judgment as a whole and the passagein its context, we are of the view that this was a meretypographical error. The above highlighted “limb (b)”in the quoted judgment should be read as limb (a)as it seems that the learned Judge above intendedto address the issue in relation to limb (a). We believethat what was intended by the learned Judge wasthat an existing application to set aside theadjudication decision appears to be a pre-conditionto an application for stay of the adjudication decisionunder Section 16(1)(a) of the Act. On top of that, limb(b) has already been dealt with earlier in the samejudgment.

Similarly, we are of the opinion that there was also atypographical error appearing in paragraph 22 ofSubang Skypark Sdn Bhd v Arcradius Sdn Bhd[2015] MLJU 286 where it states that:

“In the context of paragraph 16(1)(a),although it is not expressly provided that thesubject matter before arbitration or the Courtis the same, it stands to reason that theremust be some sameness or similarity,

whatever the extent, to warrant a stay ofthe adjudication decision. Aside fromavoiding any potential conflict in findingsand decisions from adjudication andarbitration or the Court, one is remindedof one of the central themes of CIPAAwhich is to provide temporary finality topayment disputes between parties. Thisprovision indirectly acknowledges theparties' decision that the final resolution ofthe issue or matter at hand bedetermined by some other forum, be itarbitration or by the Court. Until that finalresolution or determination, the decisionof the adjudication binds.”

In our opinion, reading the above highlighted“16(1)(a)” as 16(1)(b) in the context of thejudgment would more accurately reflect thelearned Judge’s intention and would be consistentwith the wording of the Act. Therefore, we are ofthe view that what Dato’ Mary Lim J meant wasthat the Court will take into account if the subjectmatter before arbitration or the Court and thesubject matter of the adjudication is the same orsimilar, whatever the extent, in order to evenconsider an application for stay of an adjudicationdecision under Section 16(1)(b) of the Act.

As the primary objective of this Act is toprovide speedy disposal of payment

dispute and to ensure prompt payment tothe successful claimant, the Court will

need to strike a balance betweenParliament’s clear intention as well as the

rights and legitimate concerns of anapplicant when exercising its discretion

under Section 16(2) of the Act.

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The fulfilment of either Section 16(1)(a) or (b) merelyprequalifies an applicant to make a stay application.For a Plaintiff which has crossed the thresholdrequirement in the Act, the grant of stay is notautomatic, as held in the case of Subang SkyparkSdn Bhd:

“…That is not to say that simply because thedispute or subject matter of the adjudicationdecision is now in the arbitration moderegime, the grant of stay is automatic. It isnot, let alone as of right or as a matter ofcourse. Being in arbitration merely puts thePlaintiff's case as one within Section 16 forconsideration; or one which has crossedthe threshold.”

At all times, the Court is vested with a discretionarypower in considering an application for stay ofadjudication decision and this is expressly codifiedin Section 16(2) of the Act. In Bina Puri ConstructionSdn Bhd, Ravinthran J suggests that the Courtshould be careful in exercising their discretion in linewith the word “may” in the context of Section 16. Thediscretion must be exercised sparingly in clear cutcases and he went on to state that:

“Otherwise an Adjudication Decision wouldbe effectively frustrated and renderedacademic.”

It appears that the Court must always bear in mindParliament’s intention behind the Act when exercisingthis discretion. Therefore, an applicant has to showwhy the Court’s discretion ought to be exercised inits favour after meeting the threshold set in Section16(1) of the Act.

After the “threshold” has been met, how then isan application for stay to be considered or how isthe discretion under Section 16(2) is to beexercised? Should it be on the same generalprinciples applicable to the ordinary applicationsfor stay of execution or stay of proceedings in civilsuits?

In this connection, light has been given in the HighCourt decisions of Bina Puri Construction SdnBhd and Subang Skypark Sdn Bhd. It was held inthe former case that the discretion under Section16 must not be exercised in the same manner asordinary applications for stay of execution or stayof proceedings as it may defeat the objective ofParliament in promulgating the Act in the firstplace.

In fact, Dato’ Mary Lim J in Subang Skypark SdnBhd adopted a similar approach and held that:

“…stay should only be granted inexceptional circumstances…

…the grant of any stay must alwaysweigh in the primary object of CIPAA2012; that it is to ensure a speedyresolution of a payment dispute; that it isto inject much needed cash flow into thecontractual arrangements betweenparties that saw progressive payments ofclaims as the recognised and acceptedway of doing business in constructioncontracts. It would be futile to encourageparties to resort to adjudication and thendeprive a successful claimant of its claimby staying the access to the cash simply

At all times, the Court is vested with adiscretionary power in considering an

application for stay of adjudicationdecision and this is expressly codified in

Section 16(2) of the Act.

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because there is another proceeding ofthe nature described in Subsection 16(1)which is pending. The whole concept oftemporary finality would be lost and theobject of the Act defeated if such was theconsideration.”

With regard to the applicable principles in grantinga stay of adjudication decision, Dato’ Mary Lim Jheld in Subang Skypark Sdn Bhd that stay shouldonly be granted in exceptional circumstances andthat such exceptional circumstances mustnecessarily refer to the financial status of the otherparty. The Court further held that the probableinability of repayment that may follow fromconcurrent Court or arbitration proceedings arevalid factors to be weighed.

In this regard, even if reasons are brought uppertaining to the financial status of the Defendantbeing of doubtful solvency or near insolvency, theCourt still needs to examine why that may be thecase. It is paramount to note that the merits of thecase before the arbitration or the Court or even thechances of success in setting aside theadjudication decision are not relevantconsiderations. The evidence of the applicant’sown financial status and that it is in the position topay up is again irrelevant for the Court to considerif a stay of adjudication decision ought to begranted. (see also: the Grounds of Judgment for

the case View Esteem Sdn Bhd v Bina Puri HoldingsSdn Bhd civil suit no. 24C-19-06/2015 heardtogether with Bina Puri Holdings Sdn Bhd v ViewEsteem Sdn Bhd civil suit no. 24C-21-06/2015 andView Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhdcivil suit no. 24C-22-07/2015 “View Esteem SdnBhd v Bina Puri Holdings Sdn Bhd”)

C. Conclusion

It can be seen from the above cases that the localCourts in deciding if a stay ought to be granted underSection 16 of the Act, have always had the primaryobject of the Act in mind which is to ensure speedydisposal of payment disputes on a temporary noteof finality and to inject much needed cash flow. TheCourts are always prepared to uphold this objectiveof the Act and recognise the provisional finality ofadjudication decisions. The Courts support the viewthat a successful claimant should not be deprived ofthe very benefit of why it resorted to adjudication inthe first place. In a nutshell, stay will only be grantedin exceptional circumstances and this mustnecessarily relate to the financial aspect of paymentor repayment of the Defendant. A party who appliesfor stay must necessarily present cogent andcredible evidence to convince the Court to departfrom the default view and show why a stay of thatadjudication decision ought nevertheless to begranted.

A party who applies for stay mustnecessarily present cogent and

credible evidence to convince theCourt to depart from the default view

and show why a stay of thatadjudication decision oughtnevertheless to be granted.

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Secretariat, The Malaysian Institute of Arbitrators4 June 2015

Talk on “ExpertWitnesses: A BareKnuckle Prize Fight ofCan We Do Better?”

Nick Powell of Axiom Consultants spoke on expert witnesses – an important area for members as they would eitherbe working with or working as experts themselves. The talk focused on experts’ roles and responsibilities in courtand arbitration, and Nick Powell shared tips and views on how to better use experts, garnered from his many yearsof experience in the field.

Secretariat, The Malaysian Institute of Arbitrators28 July 2015

Talk on “PerformanceBonds: Can On-DemandBonds be Stopped?”

Ir. Lai Sze Ching of IEM spoke on a topic pertinent to many in the construction industry – Performance Bonds. Alarge crowd of attendees were treated to an informative talk by Ir. Lai, drawing from his many years of experience inthe construction industry, as well as his legal knowledge. Ir. Lai also shared on recent legal developments in the areawhich have challenged common assumptions about on-call performance bonds.

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Wisma IEM15 & 22 October 2015

The Joint Course onAlternative DisputeResolution for Practitioners

The MIArb, together with Persatuan ArkitekMalaysia, Royal Institution of Surveyors Malaysiaand the Institution of Engineers Malaysia, jointlyorganised a two-day intensive course on thepractical aspects of construction law, arbitration,adjudication and mediation. The course wasattended by various members of theprofessional bodies. Kevin Prakash and SharonChong from MIArb spoke on arbitration.

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The MIArb joined the Malaysia Branch of theChartered Institute of Arbitrators in celebratingtheir Centennial Anniversary at a dinnerorganised by the Malaysia Branch of theInstitute. The evening was graced by CIArbPresident 2015, Mr. Charles Brown, currentand former judges, current and formerchairpersons of CIArb Malaysia Branch, andheads of various institutes and bodies.

CIArb CentennialAnniversary DinnerMandarin Oriental Kuala Lumpur24 October 2015

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27.2.2016 and 28.2.2016The Membership Upgrade CourseVenue: To be confirmed, please visit the MIArb website for updates.

This intensive two-day course and assessment programme is designed and organised byMIArb to impart key and relevant knowledge of the practice and procedures in arbitration toAssociates, who may apply to be upgraded to MIArb Member status upon successfulcompletion of the course and assessment.

For more information about the events on this page and otherupcoming events organised or participated by MIArb, visit ourwebsite: www.miarb.com.

UpcomingEvents

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New Members/Upgrades for SessionMay 2015 to November 2015

Fellow M/No. Date Approved1.Mr John Kelly Arthur F/115 23-07-2015

Upgraded from Member to Fellow M/No. Date Approved1.Mr Sudharsanan R. Thillainathan F/116 17-09-20152.Ms Chong Tze Ying F/117 17-09-2015

Member M/No. Date Approved1.Mr Lim Chee Yip M/444 17-09-20152.Shiyamala Devi Manokaran M/145 17-09-2015

Upgraded from Associate to Member M/No. Date Approved1.Ms Voon Ah Kam M/438 23-07-20152.Mr Eddy Azhar bin Othman M/439 23-07-20153.En Wan Ahmad Kamal bin Wan Ahmad M/440 23-07-20154.Mr Sandraruben a/l Neelamagham M/441 23-07-20155.Ms Ratnaning Wulandari M/442 23-07-20156.Ms Sharifah Kadnariah binti Syed Ahmad M/443 23-07-2015

Associate M/No. Date Approved1.Ms Lee Chooi Kheng A/226 23-07-20152.Mr Gregory Vinesh Das A/227 23-07-20153.Mr Fong Lay Cheng A/228 23-07-20154.Mr Ngo Hea Bing A/229 17-09-2015

Affiliate M/No. Date Approved1.Ms Koveladavei a/p Perumal AF/193 23-07-2015

The Malaysian Institute of Arbitrators extends awarm welcome to our new Fellows, Members,Associates and Affiliates.