An oral arbitral award on liability?
Some things can be done verbally and not in writing. Like telling Alexa what song to play. Or asking someone to marry you.
Making a decision in an arbitration on whether a party is liable for a claim is not one of such things. This is because a decision on liability is a decision on the “substance of the dispute”. The Arbitration Act 2005 (the “Act”) requires such a decision to be made in the form of a written award, signed by the arbitrator.
It makes no difference that the arbitral proceedings were split into two phases, with liability to be decided first before quantum, which was what occurred in Telekom Malaysia Bhd v Obnet Sdn Bhd [2024] CLJU 2268. The learned arbitrator in that case, a retired judge, took the view that the Act did not prescribe when he should issue a written award on liability and he was therefore free to follow the practice of the High Court by giving an oral decision on liability first, proceed with the assessment of damages and then render a written award on both liability and quantum at the conclusion of the entire proceedings.
However, arbitral proceedings have features that are different from court proceedings, chief amongst those being the requirements of the Act which apply to the former but not the latter. Being a decision on the “substance of the dispute”, it had to be in the form of a written award at whatever time the learned arbitrator issues the same.
Consequently, the oral decision was declared to be void by the Federal Court, and the claimant injuncted from proceeding with the arbitration until a written award on liability is published.
The point that an award on liability should be in writing may appear to be obvious at first blush, but it was perhaps not so since both the High Court and Court of Appeal agreed with the learned arbitrator before the Federal Court took a contrary view.
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