KNM PROCESS SYSTEMS SDN. BHD. (Co. No.: 200140-X) CYPARK SDN. BHD. (Co. No.: 477910-K)

KNM PROCESS SYSTEMS SDN. BHD. (Co. No.: 200140-X) CYPARK SDN. BHD. (Co. No.: 477910-K)

Under the amended s 11(1) AA the court retained discretion to grant interim measures but its power is confined to the enumerated measures; plaintiff satisfied required threshold (valid arguable cause, existence of circumstances to maintain/restore status quo or prevent prejudice to arbitral process, strong prima facie/seriously arguable case of unconscionability, inadequacy of damages, balance of convenience, procedural compliance) to justify interlocutory injunctions restraining calls on two bank guarantees pending issuance of the final arbitral award; declarations and damages were improper as final relief for an interim application and were set aside; the court may impose a condition...

Citation
BA-24C(ARB)-2-02/2020 (Mahkamah Tinggi)
Parties
Plaintiff: KNM Process Systems Sdn. Bhd.; Defendant: Cypark Sdn. Bhd.
Court
ARB
Jurisdiction
Malaysia
Judgment Date
28 March 2020
Case Number
BA-24C(ARB)-2-02/2020 (Mahkamah Tinggi)
Procedural Posture
Originating Summons (arbitration Interim Measures) / Interim Injunction Hearing at High Court; Appeals Pending to Court of Appeal
Outcome
Amended interlocutory order: declarations set aside; interlocutory injunctions restraining calls on two bank guarantees granted pending the final arbitral award, subject to condition that plaintiff ensure the guarantees remain valid and enforceable until issuance of final award; plaintiff's stay application...
Legal Topics
Interim Measures Under Arbitration Act 2005, Bank Guarantees Calls, Unconscionability and Fraud in Guarantees, Court's Power to Attach Conditions to Interim Relief, Stay of Execution, Non Joinder
Source Language
Malay/English
Arbitration Contract Law Civil Procedure Injunctions Banking Law (bank Guarantees) Interim Measures Under Arbitration Act 2005 Bank Guarantees Calls Unconscionability and Fraud in Guarantees +3 more

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Parties

KNM Process Systems Sdn. Bhd.

Plaintiff

Cypark Sdn. Bhd.

Defendant

Procedural Posture

Originating Summons (arbitration Interim Measures) / Interim Injunction Hearing at High Court; Appeals Pending to Court of Appeal

Legal Issues

  1. 1 Whether plaintiff could proceed without joinder of consortium co-contracting party (Hitachi)
  2. 2 Whether court could grant declarations and damages in interim measures under s 11(1) Arbitration Act 2005
  3. 3 Whether court may grant interim injunctions to restrain calls on bank guarantees under s 11(1)(a) and (b) AA and on what basis (fraud, unconscionability, contract or guarantee non-compliance)

Ratio Decidendi

Under the amended s 11(1) AA the court retained discretion to grant interim measures but its power is confined to the enumerated measures; plaintiff satisfied required threshold (valid arguable cause, existence of circumstances to maintain/restore status quo or prevent prejudice to arbitral process, strong prima facie/seriously arguable case of unconscionability, inadequacy of damages, balance of convenience, procedural compliance) to justify interlocutory injunctions restraining calls on two bank guarantees pending issuance of the final arbitral award; declarations and damages were improper as final relief for an interim application and were set aside; the court may impose a condition...

Court Disposition

Amended interlocutory order: declarations set aside; interlocutory injunctions restraining calls on two bank guarantees granted pending the final arbitral award, subject to condition that plaintiff ensure the guarantees remain valid and enforceable until issuance of final award; plaintiff's stay application...

Orders

  • Declarations made in 1st Order set aside
  • Interlocutory injunctions restraining Defendant from making any call on the two bank guarantees and from receiving any proceeds of the guarantees granted pending issuance of the final arbitral award