MTC ENGINEERING SDN. BHD. VME PROCESS ASIA PACIFIC PTE. LTD.

MTC ENGINEERING SDN. BHD. VME PROCESS ASIA PACIFIC PTE. LTD.

The Court held that the LOU did not incorporate the arbitration clause from the VME/SOM Contract because the reference in the LOU was a mere recital intended only to provide context and was insufficient under s9(5) to make the arbitration clause part of the LOU; the LOU was a standalone, temporary undertaking and MTC was not a party to the main contract containing the arbitration clause.

Citation
W-03(IM)(NCC)-1-01/2024 (Mahkamah Rayuan)
Parties
Appellant: MTC Engineering Sdn Bhd; Respondent: VME Process Asia Pacific Pte. Ltd.
Court
IM
Jurisdiction
Malaysia
Judgment Date
8 October 2025
Case Number
W-03(IM)(NCC)-1-01/2024 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed; High Court decision upheld
Legal Topics
Incorporation by Reference, Arbitration Agreement, Stay of Proceedings, Letters of Undertaking, Integration Clause
Source Language
Malay/English
Arbitration Contract Law Civil Procedure Incorporation by Reference Arbitration Agreement Stay of Proceedings Letters of Undertaking Integration Clause

Case Brief

Summary, issues, holding and outcome

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Parties

MTC Engineering Sdn Bhd

Appellant

VME Process Asia Pacific Pte. Ltd.

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether an arbitration clause in a main contract (VME/SOM Contract) was incorporated by reference into a separate Letter of Undertaking (LOU) to which the appellant was party
  2. 2 Whether a mere recital reference satisfies s9(5) of the Arbitration Act 2005
  3. 3 Whether the LOU is a standalone contract independent of the main contract such that arbitration clause does not apply

Ratio Decidendi

The Court held that the LOU did not incorporate the arbitration clause from the VME/SOM Contract because the reference in the LOU was a mere recital intended only to provide context and was insufficient under s9(5) to make the arbitration clause part of the LOU; the LOU was a standalone, temporary undertaking and MTC was not a party to the main contract containing the arbitration clause.

Court Disposition

Appeal dismissed; High Court decision upheld

Orders

  • Appeal dismissed
  • High Court decision setting aside the Senior Assistant Registrar's stay upheld