Reference no: EM133412563
Question
Malaysia has sought to develop a refined and efficient system for alternative dispute resolution. Today, Malaysia has a relatively robust arbitration ecosystem. The purpose of this assignment is to enable the students to illustrate factors the High Court will consider when setting aside an arbitration award on the grounds of public policy, particularly in a construction project.
REQUIREMENT:
ABC Sdn. Bhd. ('ABC') is a Malaysian Consultant company undertaking electrical works in the construction sector and Cool Engineering ('Cool') is an air-conditioning fitting contractor. Cool is a grade 2 contractor and licensed to undertake projects not exceeding RM2 million.
In June 2021, Cool was appointed by ABC as a subcontractor to undertake the supply and installation of air conditioning for its construction project. The contract is for the sum of RM3 million, payable to Cool upon completion.
In January 2022, a dispute arose between ABC and Cool in which ABC claimed that installation of the air-conditioners by Cool was not properly done whereas Cool claimed that they had completed all the tasks in accordance with the instructions and Mr. Mak, the project manager from ABC had acknowledged receipt of the final task. In view that both parties were unable to reach an agreement, an arbitration proceeding was commenced. After a hearing, the arbitrator delivered a final award that allowed most of Cool's claim against ABC and dismissed ABC's counterclaim ('Award').
ABC filed an application under Section 37 of the Arbitration Act 2005 to set aside the Award. In submission, ABC alleged that the Award is against public policy, claiming that an unlawful construction works undertaken by Cool, exceeded its grade of registration with the Malaysian Construction Industry Development Board ('MCIDB').
ABC also alleged that the Award is against public policy on the grounds that it was obtained by cheating, breaching natural justice as ABC was not given a fair hearing during the arbitration proceedings.
Applying arbitration principles, illustrate what factors the High Court will consider setting aside an arbitration award on the grounds of public policy, if any.