MRCB BUILDERS SDN. BHD. v BRILLIANT STAR CONSTRUCTION (M) SDN BHD

Case Significance

Illustrates the narrowness of curial intervention under section 37 of the Arbitration Act 2005: the court cannot rehear the merits or remit to a fresh tribunal, may sever an award only where the impugned part is separable, and may otherwise only adjourn for the tribunal to cure the defect.

This High Court decision, in the Construction Division at Kuala Lumpur, concerns an application to set aside an arbitration award under section 37 of the Arbitration Act 2005, in a construction dispute between a main contractor and a sub-contractor. By this originating summons the applicant sought to set aside a final award made in the sub-contractor's favour, invoking several limbs of section 37 — including sections 37(1)(a)(iv) and (v), 37(1)(b)(ii), 37(2)(b)(i) and (ii), and 37(6) — which permit an award to be set aside where, among other things, the award deals with matters beyond the scope of the submission to arbitration or conflicts with the public policy of Malaysia. Both parties are companies and are named.

The court's reasoning is notable for its treatment of the limited remedial options open to a court under section 37. It held, after examining the authorities, that the court has no power to remit matters to a new tribunal, and that an arbitrator, having signed the award, becomes functus officio — the arbitral mandate is spent. It further construed the specific sub-sections that qualify the setting-aside power: section 37(3) permits an award to be severed, so that the part affected by an excess of jurisdiction is set aside while the remainder stands, but only where the offending decision can be separated from the matters properly submitted; and section 37(4) empowers the court, where appropriate, merely to adjourn the proceedings to give the tribunal an opportunity to resume the arbitration or to take other action to eliminate the grounds for setting aside.

The judgment is a useful illustration of the narrowness of curial intervention under the Arbitration Act 2005. The grounds for setting aside are confined to those enumerated in section 37; the court cannot rehear the merits, cannot remit to a fresh tribunal, and can sever an award only where the impugned portion is genuinely separable. It reflects the Act's policy of according finality to arbitral awards and restricting the supervisory role of the court to the limited statutory bases for interference.