June 10 2004
In Bandar Sungai Buaya Sdn Bhd v Sri Lanjutan (M) Sdn Bhd(1) the Kuala Lumpur High Court considered the extent of judicial interjection in arbitral awards.
The respondent (the main contractor for the applicant's building development project) and applicant were involved in a dispute which arose when the applicant's architect refused to extend the completion date of the project as requested by the respondent. The dispute was referred to arbitration and an award was rendered in favour of the respondent.
The applicant, contending that the arbitrator had committed an error of law and had acted inappropriately, applied to set aside the award under Section 24 of the Arbitration Act, or alternatively to have it remitted to the arbitrator for reconsideration under Section 23.
The court pointed out that an award will be set aside where an arbitration or award has been improperly procured (eg, where the arbitrator has been deceived or material evidence has been concealed), or where the arbitrator has conducted himself or the proceedings inappropriately.
The court added that an award will be remitted for reconsideration by the arbitrator where:
The court added that it would not be proper to set aside an award merely on wrong inferences of fact made by the arbitrator; the arbitrator is the sole judge on findings of fact. The court's role is merely to ascertain whether there is an error of law on the face of the record, and not to rehear the matter.
The court opined that the arbitrator had addressed all the issues raised by the parties and had given sufficient reasons for his decision.
The court held that the arbitrator's decision to award 25% of the damages claimed as direct loss and expenses was based on findings of fact and, as such, could not be interfered with.
The application to set aside or remit the award was dismissed.
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