ZECON ENGINEERING & CONSTRUCTION SDN BHD POSCO ENGINEERING & CONSTRUCTION CO. LTD.

ZECON ENGINEERING & CONSTRUCTION SDN BHD POSCO ENGINEERING & CONSTRUCTION CO. LTD.

Defendant committed a repudiatory breach of the arbitration agreement by failing to request AIAC to appoint a substitute sole arbitrator within a reasonable time under the applicable KLRCA/AIAC rules after the original arbitrator withdrew; Plaintiff accepted the repudiation by filing the Originating Summons; accordingly the arbitration agreement was rendered inoperative as against the Defendant, entitling the Plaintiff to the declaratory relief and associated costs; the Stay Application under s10 AA 2005 was therefore dismissed.

Citation
WA-24C(ARB)-19-03/2024 (Mahkamah Tinggi)
Parties
Plaintiff: ZECON ENGINEERING & CONSTRUCTION SDN BHD; Defendant: POSCO ENGINEERING & CONSTRUCTION CO LTD
Court
ARB
Jurisdiction
Malaysia
Judgment Date
21 October 2024
Case Number
WA-24C(ARB)-19-03/2024 (Mahkamah Tinggi)
Procedural Posture
Originating Summons (declaration & Injunction) / Judgment (grounds of Judgment)
Outcome
Declaration granted that the arbitration agreement is inoperative; interim injunction preserved status quo; Stay Application dismissed
Legal Topics
Arbitration Agreement Operability, Appointment of Arbitrator, Advance Preliminary Deposit (apd), Repudiatory Breach, Waiver and Abandonment, Stay of Proceedings S10 Arbitration Act 2005, Injunctions, Aiac/klrca Rules
Source Language
Malay/English
Arbitration Civil Procedure Contract Law Arbitration Agreement Operability Appointment of Arbitrator Advance Preliminary Deposit (apd) Repudiatory Breach Waiver and Abandonment +3 more

Case Brief

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Parties

ZECON ENGINEERING & CONSTRUCTION SDN BHD

Plaintiff

POSCO ENGINEERING & CONSTRUCTION CO LTD

Defendant

Procedural Posture

Originating Summons (declaration & Injunction) / Judgment (grounds of Judgment)

Legal Issues

  1. 1 Whether there was a breach of the arbitration agreement by failure to appoint a substitute arbitrator
  2. 2 Whether the arbitration agreement was rendered inoperative/null and void/incapable of being performed
  3. 3 Whether the Defendant abandoned or waived its rights to arbitrate

Ratio Decidendi

Defendant committed a repudiatory breach of the arbitration agreement by failing to request AIAC to appoint a substitute sole arbitrator within a reasonable time under the applicable KLRCA/AIAC rules after the original arbitrator withdrew; Plaintiff accepted the repudiation by filing the Originating Summons; accordingly the arbitration agreement was rendered inoperative as against the Defendant, entitling the Plaintiff to the declaratory relief and associated costs; the Stay Application under s10 AA 2005 was therefore dismissed.

Court Disposition

Declaration granted that the arbitration agreement is inoperative; interim injunction preserved status quo; Stay Application dismissed

Orders

  • Declaration that the arbitration agreement originally entered between the Plaintiff and Posco Engineering Co Ltd is inoperative including as against the Defendant (prayer 1)
  • Declaration in the alternative that the Defendant has abandoned or waived rights to proceed with arbitration (as alternative sought) - not necessary to decide further given primary declaration