TUMPUAN MEGAH DEVELOPMENT SDN. BHD. v 1. ) ING BANK N.V. 2. ) O.W. BUNKER FAR EAST (SINGAPORE) PTE LTD

Case Significance

Restates the narrow section 37 grounds for setting aside an arbitral award and holds that a challenge to the amount and method of a tribunal's costs assessment goes to the merits and does not, without more, establish a breach of public policy or natural justice under the Arbitration Act 2005.

This High Court decision concerns an application to set aside an arbitral award on costs under section 37 of the Arbitration Act 2005. The plaintiff, which had commenced arbitration under the rules of the Asian International Arbitration Centre against two defendants, a bank and a bunker-supply company, sought to set aside a Final Award on Costs made by the tribunal, relying on sections 37(1)(b)(ii), 37(2)(a)(i) and 37(2)(b). Its grounds were that the costs award conflicted with the public policy of Malaysia; that it had been deprived of the opportunity to present its case, the tribunal having disregarded its submissions on costs; that the tribunal was affected by bias and predetermination, in breach of natural justice; and that the award was induced or affected by fraud. Related questions were whether the tribunal had become functus officio after issuing a partial award, so that it lacked jurisdiction to determine and allocate costs, and whether the plaintiff's repeated attempts to re-litigate matters already decided amounted to an abuse of process. The court dismissed the application. It found that the complaints were not substantiated: the award was not contrary to the public policy of Malaysia, was not made in breach of natural justice, was not tainted by bias or predetermination, and was not induced by fraud. The court emphasised that the plaintiff's real complaint went to the amount of costs and the method by which the tribunal had assessed them, which lay within the tribunal's own powers; even if the sum awarded seemed high by the standards of the local courts, that went to the merits of the award and did not establish a breach of natural justice. It also dismissed a related application to stay the proceedings pending an appeal in a connected matter, finding no special circumstances. The judgment is a clear restatement of the narrow, non-merits grounds on which a Malaysian court will interfere with an arbitral costs award.