(Chinese translation below by Low Kian Seng)

Enforcement of an arbitral tribunal interim measure was refused in a recent case for being incompatible with the powers of Court.

The Background

The Plaintiff in CRCC Malaysia Berhad v DSG Projects Malaysia Sdn Bhd [2022] 2 AMR 673 was the main contractor of a building project who engaged the Defendant as its nominated sub-contractor.

After initiating arbitration proceedings against the Defendant, the Plaintiff applied to the Arbitrator for an order requiring the Defendant to provide security for costs, to be paid by the Defendant into a joint account held by both parties’ solicitors.  The application was made pursuant to s 19(2)(e) of the Arbitration Act 2005 (“AA”), which confers power on an arbitral tribunal to grant interim measures in the form of security for costs.

After hearing the parties, the Arbitrator decided to order the Defendant to provide the security sought by the Plaintiff (but at a lower sum) (the “Arbitrator’s Decision”).

Subsequently, the Plaintiff discovered that it was not possible for two law firms to open a joint bank account.  As such, the Plaintiff proposed to the Defendant for the security to be deposited with the Plaintiff’s solicitors only, as stakeholders.

The Defendant did not reply to the Plaintiff’s proposal, nor did the Defendant provide the security.

The Plaintiff then applied to the High Court to enforce the Arbitrator’s Decision, pursuant to s 19H of the AA.  The Plaintiff also sought the following consequential reliefs – (i) requiring the Defendant to pay the security to the Plaintiff’s solicitors to hold as stakeholders; and (ii) if the Defendant fails to comply, enforcement proceedings may be taken against the directors of the Defendant.

The High Court Decision

The High Court dismissed the Plaintiff’s application.  The main reason for doing so was that the Arbitrator’s interim measure is incompatible with the powers conferred upon the Court.  It is incompatible because in the courts, the general rule is that only a plaintiff / claimant can be ordered to provide security for costs but not a defendant / respondent.  The rationale for this is that a defendant / respondent is the party who is compelled into the proceedings, and is merely on a defensive mode.

Here, the Arbitrator’s Decision ordered the Defendant (respondent in arbitration) to provide security, contrary to the Court’s powers.

There is an exception to the general rule – where a defendant has a counterclaim that exceeds the plaintiff’s claim amount, the defendant can be ordered to provide security for costs.  However, this exception did not apply on the facts of the case.

Incompatibility between an arbitrator’s interim measure and the court’s powers is one of the grounds to refuse enforcement of the said measure, as provided in s 19I(1)(b)(i) of the AA.

The High Court also noted that the consequential reliefs sought is an attempt to modify or vary the Arbitrator’s Decision.  However, this is not permissible in an enforcement application.

Comment

Section 19(2) of the AA provides for 5 types of interim measures that can be granted by an arbitral tribunal, consisting of orders to a party to:

a) maintain or restore the status quo pending the determination of the dispute;

b) take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself;

c) provide a means of preserving assets out of which a subsequent award may be satisfied;

d) preserve evidence that may be relevant and material to the resolution of the dispute; or

e) provide security for costs of the dispute.

The description of each interim measure appears to be widely worded, as can be seen above.

However, an arbitral tribunal would also have to consider whether the interim measure sought before them is compatible with the powers of the Court, apart from falling within s 19(2).  Consequently, principles (and pitfalls) of court civil procedure become relevant, even though the proceedings are arbitral proceedings.

The contents of this article are published for the purpose of general information only; they are not to be regarded, used or relied on as legal advice for any matter.  Please contact us if you require legal advice specific to your case.

与法庭权限不匹配的临时措施

因为与法庭权限的不匹配，法庭在最近的一个案件里驳回了要求执行仲裁庭临时措施的申请。

概述

原告在CRCC Malaysia Berhad v DSG Projects Malaysia Sdn Bhd [2022] 2 AMR 673是一个建筑工程的主承包商，被告是提名分包商。

对被告展开了仲裁程序后，原告向仲裁官申请，要求下令被告提供费用担保，放进双方律师的共同户口。该申请是根据2005年仲裁法案 (“仲裁法案”)，第19(5)(e)条文做出的。该条文授予仲裁庭给予临时措施的权限,其中一项就是费用担保。

进过双方的辩论后，该仲裁官下令被告提供原告要求的费用担保 (但是在一个比较少的数目)(“仲裁官的决定”)

过后，原告发现两个律师事务所并不能开一个共同的银行户口。所以，原告向被告提议，让费用担保寄存于原告律师(作为利益相关者)。

结果被告没有回复，也没有提供费用担保。

于是原告，根据仲裁法案，第19(h)条文，向高庭申请执行仲裁官的决定。 原告也申请相应的法律救济–(i)要求被告提交费用担保给原告律师; 原告律师将作为利益相关者持有该费用担保；(ii)如果被告未能遵守，可以对被告的董事采取执法诉讼程序。

高庭的决定

高庭驳回原告的申请。这项决定的主要原因是该仲裁官的临时措施是和给予法庭的权限不匹配的。这之所以不匹配，是因为在法庭里，通常只有原告(而不是被告)可以被下令提供费用担保。这是因为被告是被强行带进法律程序来辩护的。

这个案件里，仲裁官的决定是下令被告提供费用担保；这是和法庭的权限相左的。

当然这是有例外的 – 当被告拥有一个超过原告索求的反索求 – 这样被告就可以被令提供费用担保。只不过，这个例外在这个案件并不成立。

仲裁官临时措施和法庭权限的不匹配是其中一个法庭驳回该执法申请的原因。这也是仲裁法案，第19I(b)(i)条文所诠释的。

高庭也提到那些相应法律救济的索求尝试更改仲裁官的决定。但是，这是不被允许的。

评论

仲裁法案第19(2)条文提供5种仲裁庭可以给予的临时措施 ，包括谕令一方：

a) 在纠纷裁决之前，维持现有状况或回复旧有的状况；

b) 采取可以避免，或避免采取可能造成，立即对仲裁过程有伤害或侵害的行动；

c）给予一个可以维护资产的渠道，以偿还以后的裁决；

d) 保护对诉讼有关系且重要的证据；或

e) 提供诉讼的费用担保。

每项临时措施的描述，如上所见，看起来很广泛。但是，仲裁庭，在确定第19(2)条文受用后，也是需要考虑究竟临时措施的申请是不是和法庭的权力匹配。理论上，法庭民事程序上的原则（和陷阱）在仲裁程序上，也还是相关的。

这篇文章仅仅是一般信息而已；内容不能当成任何法律意见。如果你需要任何关于你案件或情况的法律意见，可以联系我们。