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 Court of Appeal affirmed the High Court: the arbitral tribunal breached the rules of natural justice and failed to make a reasoned award by not addressing the quantification of Claim 1, arguments on waiver/acquiescence/estoppel and the pleaded mitigation issue; those failures engaged s33(3)/Art34(3) and amounted to a conflict with Malaysian public policy under s37 AA, warranting setting aside of the arbitral award and dismissal of the enforcement application.

Citation
W-02(C)(A)-1836-09/2022 (Mahkamah Rayuan)
Parties
Appellant (also Plaintiff in Original Proceedings): Kebabangan Petroleum Operating Company Sdn Bhd; Respondent (also Defendant in Original Proceedings): Malaysia Marine and Heavy Engineering Sdn Bhd
Court
C
Jurisdiction
Malaysia
Judgment Date
24 January 2025
Case Number
W-02(C)(A)-1836-09/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (arbitration Enforcement and Setting Aside) / Court of Appeal Judgment (final)
Outcome
Both appeals dismissed
Legal Topics
Setting Aside Arbitral Award, Enforcement of Arbitral Award, Natural Justice, Duty to Give Reasons, Mitigation of Loss, Waiver Acquiescence Estoppel, Uncitral/aiac Rules, Arbitration Act 2005
Source Language
Malay/English
Arbitration Contract Law Civil Procedure Public Policy Setting Aside Arbitral Award Enforcement of Arbitral Award Natural Justice Duty to Give Reasons +4 more

Case Brief

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Parties

Kebabangan Petroleum Operating Company Sdn Bhd

Appellant (also Plaintiff in Original Proceedings)

Malaysia Marine and Heavy Engineering Sdn Bhd

Respondent (also Defendant in Original Proceedings)

Procedural Posture

Civil Appeal (arbitration Enforcement and Setting Aside) / Court of Appeal Judgment (final)

Legal Issues

  1. 1 Whether the arbitral tribunal breached the rules of natural justice by failing to address quantification of damages
  2. 2 Whether the tribunal failed to address arguments on waiver, acquiescence and estoppel
  3. 3 Whether the tribunal failed to address mitigation of loss

Ratio Decidendi

The Court of Appeal affirmed the High Court: the arbitral tribunal breached the rules of natural justice and failed to make a reasoned award by not addressing the quantification of Claim 1, arguments on waiver/acquiescence/estoppel and the pleaded mitigation issue; those failures engaged s33(3)/Art34(3) and amounted to a conflict with Malaysian public policy under s37 AA, warranting setting aside of the arbitral award and dismissal of the enforcement application.

Court Disposition

Both appeals dismissed

Orders

  • Appeal No. W-02(C)(A)-1837-09/2022 dismissed and arbitral award dated 23.7.2021 set aside
  • Appeal No. W-02(C)(A)-1836-09/2022 dismissed and enforcement application refused