GLOMAC KRISTAL SDN BHD v NORTON CONSTRUCTION SDN BHD

Case Significance

A developer's section 37 application to set aside a construction arbitration award dismissed because its natural-justice complaints were in truth a challenge to the arbitrator's merits and contractual interpretation.

This High Court decision concerns an application by a developer to set aside a construction arbitration award under section 37 of the Arbitration Act 2005, the developer having been the respondent in an arbitration commenced by a contractor over a building project. Section 37 confines the grounds on which a court may set aside an award to a closed list that includes a breach of the rules of natural justice in the making of the award; it is not a gateway to a rehearing of the merits.

The developer's principal complaint was that the arbitrator had breached natural justice by failing to consider material submissions, and that the arbitrator had wrongly preferred, or failed properly to weigh, expert-witness evidence that conflicted with the contemporaneous documentary record. The Court examined whether these complaints truly went to procedural fairness or whether, in substance, they were a challenge to the arbitrator's findings of fact and interpretation of the contract dressed up as natural-justice grounds. It held that they were the latter: the objections amounted to disagreement with the merits and with the arbitrator's contractual interpretation, matters that lie within the tribunal's province and are not reviewable under section 37. The governing principles of minimal curial intervention and the finality of arbitral awards meant the Court would not substitute its own view for the arbitrator's on how the evidence should have been assessed. Considerations of public policy did not assist the developer where no true procedural unfairness was shown.

The Court dismissed the setting-aside application with costs of RM20,000 subject to allocatur. The judgment is a useful illustration of the narrow scope of section 37, of the courts' insistence on minimal curial intervention and the finality of awards, and of how complaints that are in truth a challenge to an arbitrator's factual findings and contractual construction will not be entertained under the guise of a breach of natural justice.