SAMLING RESOURCES SDN BHD 1. ) EKOVEST BERHAD 2. ) EKOVEST CONSTRUCTION SDN BHD

SAMLING RESOURCES SDN BHD 1. ) EKOVEST BERHAD 2. ) EKOVEST CONSTRUCTION SDN BHD

The court found Clause 15 of the JVA created a valid arbitration agreement between the Plaintiff and D2 and therefore a stay under s 10 AA 2005 was mandatory as to D2; however, exercising its s 10(2) discretion the court imposed a condition that the D2 arbitration proceed only after resolution of the Plaintiff's claim against D1 because D1 is not party to the JVA, there is substantial factual overlap and real risk of inconsistent findings and duplicative proceedings; D1's application for a stay was dismissed because D1 failed to show special or compelling circumstances to justify a stay as a non-party.

Citation
WA-22C-7-01/2020 (Mahkamah Tinggi)
Parties
Plaintiff: Samling Resources Sdn Bhd; 1st Defendant: Ekovest Berhad; 2nd Defendant: Ekovest Construction Sdn Bhd
Court
High Court
Jurisdiction
Malaysia
Judgment Date
30 July 2020
Case Number
WA-22C-7-01/2020 (Mahkamah Tinggi)
Procedural Posture
Civil Suit Concerning Construction Project: Negligence, Negligent Misrepresentation, Breach of Jva, Fiduciary Claims and Arbitration / Interlocutory Judgment on Competing Stay Applications Under S 10 Arbitration Act 2005 and O.92 R.4 Ro C 2012; Appeal Filed Against Orders
Outcome
D2's application to stay and refer to arbitration allowed subject to condition that the arbitration proceed only after resolution of Plaintiff's claim against D1; D1's application to stay dismissed.
Legal Topics
Stay of Proceedings, Enforcement of Arbitration Clause, Non Party to Arbitration, Section 10 Arbitration Act 2005, Entire Agreement Clause, Risk of Inconsistent Findings/duplicity of Proceedings
Source Language
Malay/English
Arbitration Law Civil Procedure Contract Law Tort (negligence and Misrepresentation) Construction Law Stay of Proceedings Enforcement of Arbitration Clause Non Party to Arbitration +3 more

Case Brief

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Parties

Samling Resources Sdn Bhd

Plaintiff

Ekovest Berhad

1st Defendant

Ekovest Construction Sdn Bhd

2nd Defendant

Procedural Posture

Civil Suit Concerning Construction Project: Negligence, Negligent Misrepresentation, Breach of Jva, Fiduciary Claims and Arbitration / Interlocutory Judgment on Competing Stay Applications Under S 10 Arbitration Act 2005 and O.92 R.4 Ro C 2012; Appeal Filed Against Orders

Legal Issues

  1. 1 Whether a mandatory stay under s 10 Arbitration Act 2005 should be granted in favour of the 2nd Defendant
  2. 2 Whether the court may and should impose conditions under s 10(2) when granting a stay
  3. 3 Whether the 1st Defendant, a non-party to the JVA, is entitled to a stay of the court proceedings

Ratio Decidendi

The court found Clause 15 of the JVA created a valid arbitration agreement between the Plaintiff and D2 and therefore a stay under s 10 AA 2005 was mandatory as to D2; however, exercising its s 10(2) discretion the court imposed a condition that the D2 arbitration proceed only after resolution of the Plaintiff's claim against D1 because D1 is not party to the JVA, there is substantial factual overlap and real risk of inconsistent findings and duplicative proceedings; D1's application for a stay was dismissed because D1 failed to show special or compelling circumstances to justify a stay as a non-party.

Court Disposition

D2's application to stay and refer to arbitration allowed subject to condition that the arbitration proceed only after resolution of Plaintiff's claim against D1; D1's application to stay dismissed.

Orders

  • D2's application (encl.7) allowed subject to condition that the D2 Arbitration shall proceed only after the resolution of the Plaintiff's claim against D1 in the present suit
  • D1's application (encl.8) dismissed