FGV Plantations (Malaysia) Sdn Bhd v Multazam Development Sdn Bhd

Appellant(s): FGV Plantations (MALAYSIA) Sdn. Bhd. (Dahulunya dikenali sebagai FELDA Global Ventures Plantations (Malaysia) Sdn. Bhd.)

Respondent(s): Multazam Development Sdn Bhd

• YA Dato' Lim Chong Fong
• YA Datuk Dr Lim Hock Leng
• YA Dato' Sri Latifah Binti Haji Mohd Tahar

• The appellant engaged the respondent as design-and-build contractor for an estate workers' housing project, and disputes arising from the project (including termination of the contract) were referred to arbitration before the Asian International Arbitration Centre.
• After a 4½-year arbitration, the tribunal found in the appellant's favour on its counterclaim, awarding a principal sum together with interest, representation costs, and costs of the award.
• The respondent applied to the High Court to set aside the award under s.37 of the Arbitration Act 2005, while the appellant applied to enforce the award under s.38 and simultaneously sought security for the award sum pending disposal of the setting-aside application.

• Whether the High Court's dismissal of the security application constituted an appealable decision, or was merely an intermediate ruling not amenable to appeal under ss.3 and 67 of the Courts of Judicature Act 1964.
• What is the proper test to be applied by the High Court in exercising its discretion under s.37(7) of the Arbitration Act 2005 to order security for sums payable under an arbitral award pending determination of a setting-aside application.
• Whether the High Court erred in its exercise of discretion in refusing to order security, having regard to the merits of the setting-aside application, the losing party's financial position, and the risk of prejudice to each party.

• The Court held that the decision below was an appealable "ultimate order" made on the security application (itself treated as a discrete "matter"), rejecting the preliminary objection that the appeal was incompetent.
• The Court affirmed that the "justice of the case" test is the appropriate standard under s.37(7), requiring the court to weigh whether the setting-aside application is prima facie flimsy, speculative, tactical or unmeritorious against the prejudice the delay may cause the award-winning party; mere impecuniosity of the losing party is insufficient, without more, to justify ordering security.
• Applying an appellate standard of review (interference only where an error in the exercise of discretion is shown), the Court found no such error since the setting-aside application was not plainly untenable, the appellant had long been aware of the respondent's weak financial position, and there was no evidence of asset dissipation; the appeal was accordingly dismissed with costs, affirming the High Court's refusal to order security.