Malaysian High Court Clarifies Limits On Stay Conditions

The Malaysian High Court has refused to impose a condition on a party seeking a stay of proceedings under section 10 of the Arbitration Act 2005 to pay its share of the deposit in the arbitration, on the basis that the issue of costs and expenses of an arbitration are within the exclusive jurisdiction of the arbitral tribunal. This decision highlights that the Malaysian court's power to impose conditions on a stay under section 10 of the Act does not extend to matters that are governed by the Act and within the exclusive jurisdiction of the arbitral tribunal.

Lion Pacific Sdn Bhd v Pestech Technology Sdn Bhd (High Court Suit No: BA-22NCvC-85-02/2021)

Background

Pestech Technology Sdn Bhd was appointed by Lion Pacific Sdn Bhd as the sub-contractor for a project concerning the design, construction, equipping and maintenance of a railway. Pestech was contracted to complete certain works for an agreed sum of approximately RM42 million. A dispute arose over payment,