Chip Lam Seng Berhad V R1 International Pte Ltd

  

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MALAYSIA

 

IN THE HIGH COURT IN KUALA LUMPUR (APPELLATE AND SPECIAL POWERS DIVISION) ORIGINATING SUMMONS NO. R3-24-30-2009

 

In the matter of Order 7 and Order 28 Rules of the High Court 1980

 

And

 

In the matter of Section 42 and Section 50 Arbitration Act 2005 And

 

In the matter of Section 56(1) and Section 56(3) Contract Act

 

And

 

In the matter of Arbitration Award No 1/2009 pertaining to dispute between R1 International Pte Ltd and Chip Lam Seng Berhad in respect of contract No. 209907 dated 19/09/08

 

Between

 

CHIP LAM SENG BERHAD

 

(Company No: 22805-A) … APPLICANT

 

And

 

R1 INTERNATIONAL PTE LTD … RESPONDENT

 

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BEFORE THE HONOURABLE JUDGE

 

Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER

 

IN CHAMBERS

 

JUDGMENT

 

This is my judgment in respect of the applicant’s originating summons requesting a reference on question of law in accordance with section 42 of the Arbitration Act 2005 [AA 2005].

 

1. In the instant case the arbitration award was dated 21.04.2009. However the present application was only made on 05.06.2009 i.e. more than 42 days after the arbitration award. Section 42(2) AA 2005 makes it clear that any reference must be made within 42 days. The said section 42(2) AA 2005 reads as follows:

 

A reference shall be filed within forty-two days of the publication and receipt of the award, and shall identify the question of law to be determined and state the grounds on which the reference is sought.

 

2. It is clear that the present application prima facie is in breach of the

 

mandatory provision of the Act. In addition the applicant had filed this

 

application without seeking leave of court or at least seeking leave in the

 

present application. In addition I will say that as a general rule courts are

 

reluctant to condone delay unless exceptional circumstance warrants it to

 

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do so. In Majlis Peguam & Anor v Tan Sri Dato ’ Mohamed Yusoff Mohamed [1997] 3 CLJ 332, the Supreme Court had this to say:

 

“Generally, statutory provisions in respect of time are always mandatory and obligatory unless an express power to enlarge or abridge time is given to the court therein. ”

 

3. In the instant case there appears to be no express provision for the applicant under section 42 of AA 2005 to make an application after lapse of 42 days and in consequence the application must be dismissed in limine. However there is a dispute as to when the award was received. And the applicant says the application was within time. Notwithstanding the dispute as to delay, even on merit, the applicant’s application cannot be entertained. My reasons inter alia are as follows:-

 

(a) The applicant’s complaint is based on the fact that the arbitral tribunal in making the award has failed to consider and/or apply Section 56(1) Contracts Act 1950, which states that:-

 

When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

 

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In my view it is a misconceived argument as it is clear that the arbitration proceeded not only pursuant to the ordinary laws inclusive of the Contract Act but also in accordance to the provisions stated in the Malaysian Rubber Exchange Rules and Byelaws. In consequence, Contract Act cannot be read in isolation.

 

(b) In addition, the arbitrators had in the award considered the issues complained of by the applicant in broad terms and that part of the award as per appendix 1 reads as follows:-

 

“(2) that the claimant had failed to fulfill its contractual obligation for not making the shipment within the contractual month and for not informing the buyer timely to seek for alternative solution when it was evident that the cargo could not be shipped in time ”

 

(3) that the respondent cannot unilaterally cancel a contract that was mutually entered into without any warning notice and without making effort to resolve the dispute or seek alternative settlement in accordance to the provisions in the MRE Rules and Byelaws; the Arbitral Tribunal considered it necessary to stride a balance between technicality and trade practice, particularly in-house trading precedents for this case, especially in face of a volatile market situation when the dispute occurred”

 

(4) therefore, both parties are equally responsible to this resultant dispute and must bear responsibility and cost equally”

 

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(c) It is trite that the court will not ordinarily interfere with the decision of an arbitrator made pursuant to AA 2005 unless it is a case of patent injustice which the law permits the court in clear terms to interfere. I have dealt with this area of jurisprudence in detail in the case of Taman Bandar Baru Masai Sdn Bhd v Dindings Corporation Sdn Bhd [2009] 1 LNS 842. I do not wish to repeat the same.

 

4. For reasons stated above, I dismiss the application with costs. The applicant to pay the respondent costs in the sum of RM10,000.00.

 

I hereby order so.

 

(Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER)

 

Judge

 

High Court (Commercial Division)

 

KUALA LUMPUR

 

Date: 19th January 2010

 

For the Applicant: Shariful Bahrin Bin Halim; M/s Amir, Lim &

 

Partners

 

For the Respondent: Andrew Heng; M/s Zain Megat & Murad

 

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