PEMBINAAN JAYA ZIRA SDN BHD v SUNGAI LUI CONSTRUCTION AND DEVELOPMENT SDN BHD

w-02ca-538-04-2025 Court of Appeal (Mahkamah Rayuan) 7 December 2025 • W-02(C)(A)-538-04/2025 • 30 min read
21 cases cited (1 SG, 20 foreign)

Catchwords

Arbitration – Court-ordered reference to arbitration – Whether different from submission to arbitration – Whether award obtained pursuant to a court-ordered reference to arbitration may be enforced under the Arbitration Act - Whether enforcement should have been pursuant to section 24A of the Courts of Judicature Act 1964 Contract Law – Whether the subcontract from the Appellant to the Respondent was an Ali Baba arrangement – Whether such arrangement was illegal as contrary to public policy – Contracts Act 1950 section 24

Practice Areas

Arbitration Contract Law

Judges (3)

Evrol Mariette Peters Delivered Mohd Firuz bin Jaffril Coram Mohd Nazlan bin Mohd Ghazali Coram

Counsel (7)

Lo Chambers Firm Sanjay Mohan Firm Chan Yi Zheng Counsel Respondent Irwin Lo Chi Vui Counsel Respondent Rodney Gan Pei Rong Counsel Appellant Sanjay Mohanasundram Counsel Appellant Siew Suet Mey Counsel Appellant

Parties (2)

PEMBINAAN JAYA ZIRA Sdn Bhd Appellant SUNGAI LUI CONSTRUCTION AND DEVELOPMENT Sdn Bhd Respondent

Case Significance

PEMBINAAN JAYA ZIRA SDN BHD v SUNGAI LUI CONSTRUCTION AND DEVELOPMENT SDN BHD is a Court of Appeal (Mahkamah Rayuan) decision dated December 7, 2025 (citation: w-02ca-538-04-2025). <p>Pembinaan Jaya Zira Sdn Bhd appealed against the enforcement of an arbitration award obtained by its total subcontractor Sungai Lui Construction, arguing the subcontract was an illegal 'Ali Baba' arrangement contrary to public policy. The Court of Appeal unanimously allowed both appeals, finding that the award was obtained through a court-ordered reference to arbitration under Section 24A of the Courts of Judicature Act 1964 rather than by agreement, and that the arrangement was void as contr The panel comprised Evrol Mariette Peters, Mohd Firuz bin Jaffril and Mohd Nazlan bin Mohd Ghazali, with Evrol Mariette Peters delivering the judgment. Counsel appearing: Chan Yi Zheng (counsel for respondent), Irwin Lo Chi Vui (counsel for respondent), Rodney Gan Pei Rong (counsel for appellant), Sanjay Mohanasundram (counsel for appellant), Siew Suet Mey (counsel for appellant).

Summary

Pembinaan Jaya Zira Sdn Bhd appealed against the enforcement of an arbitration award obtained by its total subcontractor Sungai Lui Construction, arguing the subcontract was an illegal 'Ali Baba' arrangement contrary to public policy. The Court of Appeal unanimously allowed both appeals, finding that the award was obtained through a court-ordered reference to arbitration under Section 24A of the Courts of Judicature Act 1964 rather than by agreement, and that the arrangement was void as contrary to public policy under Section 24 of the Contracts Act 1950.

What was the outcome of PEMBINAAN JAYA ZIRA SDN BHD v SUNGAI LUI CONSTRUCTION AND DEVELOPMENT SDN BHD?

<p>Pembinaan Jaya Zira Sdn Bhd appealed against the enforcement of an arbitration award obtained by its total subcontractor Sungai Lui Construction, a...

Statutes Cited

Arbitration Act
s 37 s 38 s 39
Arbitration Act 1902
s 15
Arbitration Act 2005 (Cap 646)
s 38
Arbitration Act applies to contractual arbitrations governed by the Arbitration Act
s 38
Arbitration Ordinance 1960
s 15
Contracts Act 1950 (Cap 136)
s 24 s 24(e)
Courts of Judicature Act
s 24A
Courts of Judicature Act
s 24A
Courts of Judicature Act
s 24A
Courts of Judicature Act
s 24A
Courts of Judicature Act 1964
s 24A
Courts of Judicature Act 1964 (Cap 91)
New South Wales Arbitration Act 1902
s 15
New South Wales Arbitration Act 1902
s 15
Singaporean Arbitration Act
s 22

Cases Cited (21)

SG (1)
[2000] SGCA 18
UK (1)
[1947] AC 487
MY (19)
[1984] 2 MLJ 165 [1989] 1 CLJ 897 [1996] 2 MLJ 517 [1996] 3 CLJ 163 [1998] 2 CLJ 909 [1998] 2 MLJ 463 [2003] 2 MLJ 97 [2005] 2 MLJ 1 [2006] 7 MLJ 510 [2008] 2 MLJ 87 [2009] 6 MLJ 1 [2010] 3 MLJ 509 [2010] 9 CLJ 202 [2010] 9 CLJ 785 [2010] MLJU 543 [2012] 4 MLJ 149 [2013] 4 MLJ 693 [2015] 5 MLJ 619 [2017] 3 MLJ 763