MALAYSIA MARINE AND HEAVY ENGINEERING SDN BHD v HAUMEA OFFSHORE SDN BHD

Case Significance

Confirms that a court will not restrain arbitration under the Arbitration Act 2005, which mandates minimal curial intervention and permits only measures in aid of arbitration, leaving questions of jurisdiction to the tribunal and treating participation in the arbitration as an estoppel.

This High Court decision at Johor Bahru concerns an application by a main contractor to restrain a counterparty from pursuing arbitration. The plaintiff had been appointed as the main contractor for an oil-and-gas redevelopment project, and the defendant had issued a notice of arbitration. The plaintiff sought an injunction to prevent the defendant from continuing or initiating arbitration under that notice; the Court had earlier granted an ex parte injunction but subsequently set it aside, and the inter partes application then came on for hearing. Applying the familiar principles governing interlocutory injunctions from Keet Gerald Francis Noel John v Mohd Noor bin Abdullah, the Court found that the defendant had substantially complied with the relevant clause of the letter of award, so that no serious question to be tried had been established, that damages would be an adequate remedy, and that the balance of convenience favoured allowing the arbitration to proceed. It emphasised the strong legislative policy of minimal curial intervention in the Arbitration Act 2005: section 8 restricts court interference in arbitral matters, and section 11 permits only interim measures in aid of arbitration, not measures to restrain it, so that continuing the injunction would be inconsistent with those provisions and with the principle of party autonomy recognised in Press Metal Sarawak Sdn Bhd. The Court also held that questions of the arbitral tribunal's jurisdiction were for the tribunal itself to determine, and that the plaintiff's own participation in the arbitration gave rise to an estoppel. To restrain the arbitration on grounds already adjudicated would risk a duplication of proceedings and undermine the arbitral process the parties had chosen. The Court dismissed the application with costs of RM10,000 and left the defendant at liberty to proceed with the arbitration before the Asian International Arbitration Centre. The decision underscores that an anti-arbitration injunction is an exceptional remedy that runs counter to the statutory scheme, and will rarely be granted where the parties have bound themselves to resolve their disputes by arbitration.