KEBABANGAN PETROLEUM OPERATING COMPANY SDN. BHD. MALAYSIA MARINE AND HEAVY ENGINEERING SDN. BHD.

KEBABANGAN PETROLEUM OPERATING COMPANY SDN. BHD. MALAYSIA MARINE AND HEAVY ENGINEERING SDN. BHD.

The Award was set aside because the Tribunal, despite accepting KPOC’s methodology, failed to consider and make reasoned findings on material issues (the detailed quantification of Claim 1 against expert evidence, defences of waiver/acquiescence/estoppel and mitigation) and did not provide a reasoned award as required by the agreed arbitral procedure and statute; those omissions amounted to serious breaches of natural justice with material impact and conflicted with public policy, so the Award must be set aside and enforcement refused.

Citation
WA-24C(ARB)-51-09/2021 (Mahkamah Tinggi)
Parties
Plaintiff (enforcement Applicant): Kebabangan Petroleum Operating Company Sdn Bhd; Defendant (setting Aside Applicant): Malaysia Marine And Heavy Engineering Sdn Bhd
Court
ARB
Jurisdiction
Malaysia
Judgment Date
30 August 2022
Case Number
WA-24C(ARB)-51-09/2021 (Mahkamah Tinggi)
Procedural Posture
Enforcement and Setting Aside of Arbitral Award (arbitration Act 2005) / Decision (grounds of Judgment)
Outcome
Setting Aside Application allowed; Award set aside in full; Enforcement Application dismissed
Legal Topics
Setting Aside Arbitral Award, Enforcement of Arbitral Award, Natural Justice, Reasoned Award, Quantum of Damages, Mitigation of Loss, Waiver, Acquiescence and Estoppel, Burden of Proof
Source Language
Malay/English
Arbitration Contract Law Civil Procedure Administrative Law Setting Aside Arbitral Award Enforcement of Arbitral Award Natural Justice Reasoned Award +4 more

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Parties

Kebabangan Petroleum Operating Company Sdn Bhd

Plaintiff (enforcement Applicant)

Malaysia Marine And Heavy Engineering Sdn Bhd

Defendant (setting Aside Applicant)

Procedural Posture

Enforcement and Setting Aside of Arbitral Award (arbitration Act 2005) / Decision (grounds of Judgment)

Legal Issues

  1. 1 Whether the Tribunal failed to consider and make findings on key defences and quantification of Claim 1
  2. 2 Whether the Award contains decisions beyond the scope of the submission to arbitration or is vitiated by breach of natural justice
  3. 3 Whether the arbitral procedure complied with parties' agreement to give a reasoned award

Ratio Decidendi

The Award was set aside because the Tribunal, despite accepting KPOC’s methodology, failed to consider and make reasoned findings on material issues (the detailed quantification of Claim 1 against expert evidence, defences of waiver/acquiescence/estoppel and mitigation) and did not provide a reasoned award as required by the agreed arbitral procedure and statute; those omissions amounted to serious breaches of natural justice with material impact and conflicted with public policy, so the Award must be set aside and enforcement refused.

Court Disposition

Setting Aside Application allowed; Award set aside in full; Enforcement Application dismissed

Orders

  • Award dated 23.7.2021 set aside in its entirety
  • Enforcement application dismissed