1. APEX MARBLE SDN BHD (Company Registration No. 669745-X) 2. MCORE SDN BHD (Company Registration No. 599497-H) LEONG TAT YAN (NRIC NO. 760730-04-50870)

1. APEX MARBLE SDN BHD (Company Registration No. 669745-X) 2. MCORE SDN BHD (Company Registration No. 599497-H) LEONG TAT YAN (NRIC NO. 760730-04-50870)

The Court of Appeal allowed the appeal, set aside the High Court's stay. It held s.10 did not apply because the defendant was not a party to the arbitration agreement and any stay against a non‑party requires rare and compelling circumstances. Further, the defendant had taken unqualified steps in the proceedings (including filing defence and counterclaim) without reserving arbitration rights and was therefore precluded from invoking s.10; the High Court erred in its exercise of discretion; appeal allowed and matter remitted to High Court.

Citation
W-02(NCvC)(W)-202-01/2018 (Mahkamah Rayuan)
Parties
Appellant/ Plaintiff: Apex Marble Sdn Bhd; Appellant/ Plaintiff: Mcore Sdn Bhd; Respondent/ Defendant: Leong Tat Yan
Court
NCvC
Jurisdiction
Malaysia
Judgment Date
26 June 2018
Case Number
W-02(NCvC)(W)-202-01/2018 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court Concerning Stay Pending Arbitration
Outcome
Appeal allowed; High Court decision granting stay set aside; proceedings remitted to High Court for determination of plaintiffs' claims
Legal Topics
Stay of Proceedings Pending Arbitration, Non Party Arbitration, Separability Doctrine, Estoppel, Steps in the Proceedings, Abuse of Process, Costs
Source Language
Malay/English
Arbitration Contract Law Civil Procedure Jurisdiction Inherent Court Powers Stay of Proceedings Pending Arbitration Non Party Arbitration Separability Doctrine +4 more

Case Brief

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Parties

Apex Marble Sdn Bhd

Appellant/ Plaintiff

Mcore Sdn Bhd

Appellant/ Plaintiff

Leong Tat Yan

Respondent/ Defendant

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court Concerning Stay Pending Arbitration

Legal Issues

  1. 1 Whether a person who denies being party to an arbitration agreement can apply for a stay pending arbitration under s.10 Arbitration Act 2005
  2. 2 Whether the defendant was precluded from seeking a stay because he had taken steps in the court proceedings

Ratio Decidendi

The Court of Appeal allowed the appeal, set aside the High Court's stay. It held s.10 did not apply because the defendant was not a party to the arbitration agreement and any stay against a non‑party requires rare and compelling circumstances. Further, the defendant had taken unqualified steps in the proceedings (including filing defence and counterclaim) without reserving arbitration rights and was therefore precluded from invoking s.10; the High Court erred in its exercise of discretion; appeal allowed and matter remitted to High Court.

Court Disposition

Appeal allowed; High Court decision granting stay set aside; proceedings remitted to High Court for determination of plaintiffs' claims

Orders

  • The decision of the High Court is set aside and the appeal is allowed
  • Appeal allowed with costs of RM15,000.00 here and below, subject to payment of allocator fee