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Our Partner, Kuhendran Thanapalasingam and Senior Associate, Agesh Jeyaratnam from Zul Rafique & Partners’ Construction Dispute Resolution Practice Group, succeeded on appeal in the Court of Appeal in favour of the Appellant against the Respondent in respect of the High Court’s decision to dismiss the Appellant’s application to set aside a Partial Award granted to the Respondent in the sum of RM3 Million.
 
The Appellant was the developer of a residential and commercial development on certain land in Menggatal, Kota Kinabalu (“Project”). The Respondent was appointed by the Appellant as the architect for the Project.

Disputes arose and the Appellant and the Respondent agreed to have their disputes referred to arbitration in 2013. The parties agreed that the dispute as to the Appellant’s liability was to be determined first and that the issue of quantum was to be dealt with in the final award.

Contrary to the agreement of the parties, the arbitrator published a Partial Award in respect of quantum for a sum of RM3million inclusive of costs and post award interest as well as pre-award interest of RM2million.

The Appellant applied to set aside the Partial Award on the following grounds:-

 
  1. The arbitrator’s decision to publish the Partial Award was not in accordance with the agreement of the parties pursuant to Section 37(1)(a)(vi) of the Arbitration Act (“AA”) 2005; and
  2. Given the pre-amended AA 2005 applies, the arbitrator exceeded its jurisdiction by granting pre-award interest pursuant to Sections 37(1)(a)(iv) and (v) of the AA 2005.

Whereas, the Respondent applied to enforce the Partial Award.

The High Court dismissed the Appellant’s setting aside application, save for the pre-award interest. While, the Respondent’s enforcement application was allowed, save for the pre-award interest.

Aggrieved by the High Court’s decisions, the Appellant and the Respondent appealed against both decisions of the High Court.

Upon reading and hearing submissions, the Court of Appeal allowed the Appellant’s appeals and set aside the decision of the High Court and the arbitrator’s Partial Award for not being in accordance with the parties’ agreement. Accordingly, the Court of Appeal also held the Respondent’s appeals were rendered academic. Further, the Court of Appeal awarded global costs of RM30,000.00 to the Appellant.

For more insight into this area of law, please contact our Partners in the Construction Dispute Resolution Practice Group:
Kuhendran Thanapalasingam
Susan Tan Shu Shuen


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