NORTON CONSTRUCTION SDN BHD v GLOMAC KRISTAL SDN BHD

Case Significance

A contractor's section 38 application to enforce and register a construction arbitration award as a judgment, allowed on the Act's pro-enforcement policy once the developer's setting-aside challenge had failed.

This High Court decision is the counterpart to a setting-aside challenge and concerns a contractor's application to enforce a construction arbitration award against a developer under section 38 of the Arbitration Act 2005, so that the award could be registered and take effect as a judgment of the High Court. The contractor had succeeded before the sole arbitrator and sought to reap the fruits of the award, while the developer resisted enforcement, its resistance being intrinsically linked to its own, separate, application to set the award aside.

Section 38 provides for the recognition and enforcement of an arbitral award as of right, subject only to the limited grounds for refusal set out in section 39. The policy behind the scheme is the finality of arbitration: parties who agree to arbitrate are held to the bargain that the tribunal's award will bind them, and the court's role at the enforcement stage is supervisory and narrow rather than appellate. The Court rejected as misconceived the suggestion that enforcement should be withheld because registration would deprive the enforcing court of an understanding of the arbitrator's reasoning; the reasoning is contained in the award, and enforcement does not depend on the court re-examining the merits. Because the developer's resistance stood or fell with its unsuccessful setting-aside application, and no ground under section 39 was made out, there was no basis to refuse enforcement.

The Court allowed the enforcement application with costs of RM10,000 subject to allocatur, and ordered that the award be registered as a judgment of the High Court under section 38 of the Arbitration Act 2005. The judgment is a useful illustration of the pro-enforcement policy of the Act, of the narrow grounds on which recognition may be resisted, and of how a failed attempt to set aside an award leaves the losing party with no answer to enforcement.