Contributed by Shearn Delamore & Co

March 08 2007
 
“On April 20 2006 the High Court delivered judgment in Shamelin Holdings Sdn Bhd v Mohd Anhar Bin Ahmad (trading as ABA Architect) ([2006] 6 MLJ 135 (HC)).

Facts

By an agreement dated May 19 1995 Shamelin Holdings appointed Mohd Anhar Bin Ahmad to provide professional architectural services for various construction projects. Three years later Ahmad terminated his appointment as architect for the projects on the grounds of non-payment of his fees.

The dispute was referred to an arbitrator in relation to bills issued for professional services rendered by Ahmad for the projects granted to Shamelin Holdings. The arbitrator found in favour of Shamelin Holdings and awarded it pre-award interest.

Ahmad appealed to the High Court against the arbitrator’s award on the grounds that (i) there were errors in the award which merited the setting aside of the award, and (ii) the arbitrator had no jurisdiction to award pre-award interest.
Decision

The High Court dismissed Ahmad’s application with costs and allowed Shamelin Holdings’ application. It held that its jurisdiction was limited in that it had no jurisdiction to examine the correctness of the arbitral award based on merit. The court’s function was not to re-hear the matter, but rather to determine whether there was an error of law on the face of the award. This involved considering whether the arbitrator had properly analyzed the evidence and drawn the appropriate inferences of fact from the evidence.

The High Court held that the arbitrator had the discretion to award pre-award interest. In awarding the interest, the arbitrator was guided by established precedents; the fact that the Arbitration Act 1950 provides for post-award interest did not preclude the grant of pre-award interest.
For further information on this topic please contact K Shanti Mogan at Shearn Delamore & Co by telephone (+60 3 2070 0644) or by fax (+60 3 2078 5625) or by email (shanti@shearndelamore.com).”