Alami Vegetable Oil Products Sdn Bhd v Lombard Commodities Limited MLJU 0214 [2009]

Alami Vegetable Oil Products Sdn Bhd v Lombard Commodities Limited MLJU 0214 [2009]

The appellant did not participate in the arbitration in the United Kingdom and the respondent failed to produce an original arbitration agreement between the appellant and the respondent or a duly certified copy thereof as required by Section 4(b) of the Foreign Arbitral Awards Convention Act.

The Putrajaya Court of Appeal refused to register the foreign arbitral award. The court held that His Majesty the Yang Di Pertuan Agong had not declared, by way of an order in the Official Gazette, that the United Kingdom was a party to the New York Convention. This is a requirement pursuant to Section 2(2) of the Foreign Arbitral Awards Convention Act. The court reasoned that were it not for the Foreign Arbitral Awards Convention Act, the plaintiff would have had to sue under the award in a common law action or register the award as a judgment in the Singapore court and then seek to register and enforce that judgment under the Reciprocal Enforcement of Judgments Act 1958. Therefore, the right to enforce a convention award pursuant to Section 3(1) of the Foreign Arbitral Awards Convention Act is a benefit that the plaintiff would not have had were it not for the act.

Similarly, under the Foreign Arbitral Awards Convention Act, it is mandatory that each convention country be notified in the Official Gazette. Thus, the argument that it could be easily established whether the United Kingdom was a convention country, did not find favour.

The court held that the purpose of the Foreign Arbitral Awards Convention Act is to give effect to the New York Convention, subject to certain reservations (eg. the required Official Gazette notification declaring one or more countries party to the convention). Since no Official Gazette notification was issued by the Yang Di Pertuan Agong declaring Singapore a contracting state to the New York Convention, the arbitration award held in Singapore could not be enforced in Malaysia. In so deciding, the court of appeal endorsed its earlier decision in Sri Lanka Cricket v World Sport Nimbus Pte Ltd, in which it took the same position.

The court of appeal also touched on other irregularities in the application (ie, the fact that no arbitration agreement existed between the appellant and the respondent, and that neither the original of such agreement nor a certified copy thereof was produced). It is regrettable that these ancillary grounds did not form the primary basis for dismissing the application to register the foreign arbitral award.

Applications to register foreign arbitral awards that were pending in the Malaysian courts under the Foreign Arbitral Awards Convention Act will now influenced by that decision. However, the Arbitration Act 2005 does not have a similar requirement and the case should not preclude enforcement under this Act.

See also later Federal Court Ruling which subsequently allowed enforcement in Malaysia

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