ONE AMERIN RESIDENCE SDN BHD v RAGAWANG CORPORATION SDN BHD

Case Significance

Confirms the confined scope of curial intervention under the Arbitration Act 2005: a setting-aside application examines the arbitrator's decision-making process and grounds such as natural justice and jurisdiction, not the merits of the award.

This Court of Appeal decision concerns the setting aside of an arbitral award and the limited scope of curial intervention under the Arbitration Act 2005. The appellant, One Amerin Residence Sdn Bhd, appealed against the High Court's decision, on originating summonses brought by the respondent, Ragawang Corporation Sdn Bhd, to set aside a second final award made in a construction arbitration between the parties, the appeals being heard together. The issues engaged sections 37 and 42 of the Arbitration Act 2005, the principle that a setting-aside application may enquire only into the arbitrator's decision-making process and not into the correctness of the decision itself, the reach of the "public policy" ground under section 37(1)(b)(ii), the requirement of a right to be heard, and the operation of res judicata and estoppel per rem judicatam. The court examined whether the High Court judge had been correct to find valid grounds to set aside the second final award, focusing on questions of natural justice and jurisdiction rather than the merits. It found that the judge was correct to hold that there were valid grounds to set aside the second final award, save for the judge's findings on the arbitrability of the respondent's claim under the relevant contracts and the retention sum, noting that the respondent had disputed the architect's final account within the applicable three-month limitation period and had not admitted or failed to dispute that account. Concluding that the appeals had no merit, the court dismissed both appeals and upheld and affirmed the decision to set aside the second final award, while varying the High Court's decision only so far as to define the scope of the remainder claims the respondent might still pursue in further arbitration, and it ordered the appellant to pay costs of RM15,000 in each appeal. The judgment is a useful statement of the confined role of the court in setting aside an arbitral award for want of natural justice or jurisdiction.