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

Case Significance

Applies party autonomy and minimal curial intervention under the Arbitration Act 2005, holding that mere disagreement with an arbitrator's findings is no ground to set aside an award, and enforcing the award under section 38.

This High Court decision at Kuala Lumpur, in the Construction Court, concerns an application by a contractor to enforce a final arbitration award in its favour under section 38 of the Arbitration Act 2005, heard together with the opposing party's application to set the same award aside. The contractor had obtained a final award from the arbitrator in a construction dispute, and it applied by originating summons for leave to enforce the award as a judgment of the court, while the paying party applied by a separate originating summons to set the award aside on various grounds.

The governing principle is that the courts respect the parties' autonomy in choosing arbitration and exercise only minimal curial intervention in arbitral awards. The court invoked the Federal Court's approach in Government of India v Cairn Energy India Pty Ltd, and the classic statement that a party which refers a matter to an arbitrator must take the consequences even of an error of law by the arbitrator it has chosen; having chosen to go to arbitration, it must accept the arbitrator's judgment. The limited grounds on which an award may be disturbed do not extend to a mere disagreement with the arbitrator's findings on the merits.

The court found that the opposing party's challenge amounted to no more than dissatisfaction with the arbitrator's findings and the merits of the decision, which is not a permissible basis for setting aside an award. It accordingly dismissed the setting-aside application with costs. Because the setting-aside application failed and the interim stay fell away with it, the way was clear to enforce the award, and the court allowed the enforcement application, granting the prayers sought. The judgment is a clear application of the party-autonomy and minimal-curial-intervention principles to the enforcement of an arbitral award under section 38 of the Arbitration Act 2005.