Extra Excel (M) Sdn Bhd v Quek Peck Keow

Appellant(s): Extra Excel (M) Sdn. Bhd

Respondent(s): QUEK PECK KEOW (p)

• YA Datuk Azhahari Kamal bin Ramli
• YA Dato' Ong Chee Kwan
• YA Dato' Nadzarin Bin Wok Nordin

• The respondent, a distributor for the appellant's multi-level marketing business, had her distributorship suspended in March 2020, prompting her to commence court proceedings challenging the suspension.
• The appellant's standard form rulebook contained an arbitration clause (Clause 1.3) which, in its November 2019 version, included a 150-day time bar; this clause was previously declared void and inoperative by the Court of Appeal in an earlier, final decision.
• While the respondent's earlier appeal was pending, the appellant unilaterally amended the rulebook in June 2021 to remove the time bar and expressly add itself as an entity entitled to invoke arbitration, then relied on this amended clause to commence a fresh arbitration and seek a second stay of the respondent's court proceedings.

• Whether section 18 of the Arbitration Act 2005 (kompetenz-kompetenz) required the courts to defer questions on the existence/validity of the arbitration agreement to the arbitral tribunal, rather than determining the matter themselves under section 10(1).
• Whether the doctrines of res judicata or issue estoppel, arising from the earlier final decision on the 2019 clause, barred reliance on the differently worded 2021 amendment.
• Whether a party may unilaterally amend a standard-form arbitration clause after a dispute has crystallised and court proceedings commenced, and rely on that amendment to compel arbitration of that pre-existing dispute retrospectively.

• The Court held that section 18's kompetenz-kompetenz principle does not oust a court's statutory duty under section 10(1) to determine the existence and validity of an arbitration agreement, particularly where the relief sought is final, the question is one of pure construction on undisputed documents, or the same clause has already been finally adjudicated.
• On construction, the Court held that Clause 1.3 (2019 version) never conferred on the appellant any right to compel arbitration against a distributor, as the qualifying language limited invocation to disputes brought by the distributor only; this alone was sufficient to dismiss the appeal.
• The Court further held that a dispute resolution clause cannot be unilaterally rewritten to retrospectively capture a dispute that has already crystallised and been placed before a court, as the liberty to submit an existing dispute to arbitration belongs to both parties jointly, not one party unilaterally; both appeals were accordingly dismissed, though the Court declined to endorse the High Court's finding of subjective bad faith against the appellant.