1. ) SEMASA SENTRAL SDN BHD (P dalam Tindakan Asal & D1 dalam Tuntutan Balas) 2. ) Jewel Builders & Resources (M) Sdn Bhd v 1. ) GLOBAL FUSION SDN BHD 2. ) Malaysia Resources Corporation Berhad 3. ) MRCB Builders Sdn Bhd (D3 dalam Tuntutan Balas) 4. ) One Sentral Park Sdn Bhd (D4 dalam Tuntutan Balas) 5. ) S & S Quest Sdn Bhd (D5 dalam Tuntutan Balas) 6. ) Sham Shamrat Sen Gupta (D6 Dalam Tuntutan Balas) BUKAN PIHAK-PIHAK 1. ) Kwan Joon Hoe (D7 Dalam Tuntutan Balas) 2. ) Mohd Imran Bin Mohama...

Case Significance

Illustrates how a court approaches a section 10 stay application where an arbitration agreement would splinter a multi-party construction dispute, and the court's reluctance to grant a stay that would fracture the proceedings and risk conflicting findings.

This High Court decision at Kuala Lumpur, delivered by Aliza Sulaiman J, concerns applications by the third and fourth defendants in a counterclaim — MRCB Builders Sdn Bhd and One Sentral Park Sdn Bhd — for a stay of the counterclaim proceedings brought against them by Jewel Builders & Resources (M) Sdn Bhd, pending reference of the dispute to arbitration under seksyen 10 Akta Timbang Tara 2005 (section 10 of the Arbitration Act 2005) and Aturan 69 kaedah 10 Kaedah-Kaedah Mahkamah 2012 (Order 69 rule 10 of the Rules of Court 2012). The litigation arose from a construction-related dispute in which Semasa Sentral Sdn Bhd was plaintiff in the original action, and a web of corporate and individual parties — including Malaysian Resources Corporation Berhad, One Sentral Park Sdn Bhd and others — featured in an amended counterclaim.

Section 10 of the Arbitration Act 2005 requires a court to stay court proceedings in favour of arbitration where a party applies before taking any other step in the proceedings, provided the dispute falls within a valid arbitration agreement. The issues the Court addressed included whether the applicant defendants had taken any step in the proceedings, whether the arbitration agreement covered the present dispute, and whether a stay would be appropriate given that the arbitration would concern only some of the parties while related claims involving non-parties proceeded in court — raising the prospect of duplicated evidence and conflicting findings. The Court observed that the application appeared to be an attempt to carve out only those claims involving the two applicant defendants, and that the plaintiffs' fallback proposal to stay the arbitration itself did not assist.

The Court was not persuaded that a stay in the terms sought was appropriate in the circumstances, noting in particular that the applicant defendants had not proposed or made submissions on the conditions that might be imposed. It dismissed the third and fourth defendants' applications, with costs of RM3,500 respectively, subject to allocatur. The judgment is a useful illustration of how a court approaches a section 10 stay application where an arbitration agreement would splinter a multi-party construction dispute, and of the court's reluctance to grant a stay that would fracture the proceedings and risk conflicting findings.