Bintulu Development Authority v Pilecon Engineering Bhd 2CLJ422 [2007]

Bintulu Development Authority v Pilecon Engineering Bhd 2CLJ422 [2007]

The High Court issued its decision in a number of questions of law raised by the arbitrator at the request of both  Bintulu Development Authority and Pilecon Engineering Bhd under section 22(1)(a) of the Arbitration Act 1952.

The questions put before the court were:

Whether a dispute or difference had arisen between Pilecon Engineering Bhd and Bintulu Development Authority;

Whether arbitration was in fact a valid proceeding in this case

Whether the arbitration could proceed

Whether the arbitrator had been validly appointed by the parties

The questions arose following a party challenging the validity of the subcontract agreement under which the arbitration was brought and were raised after both parties had nominated and appointed the arbitrator, attended the preliminary meeting, served their respective points of claim and made interlocutory applications for further information.

The court held that the facts demonstrated that even in the event that arbitration clause in the underlying contract was held to be void, the parties’ joint appointment of the arbitrator constituted a new reference to the arbitrator. The Court further that the parties indeed by requesting the Courts ruling under the provisions of the Arbitration Act indicated that the parties acknowledged the validity of referring the case to arbitration.

The court held that the contract validated the appointment of the arbitrator, empowering him with the necessary jurisdiction to hear the matter. Therefore, Bintulu Development Authority could no longer dispute the validity of the arbitration proceedings as it had participated in the arbitration proceedings from the beginning.

Bintulu Development Authority v Pilecon Engineering Bhd [2007]