Volume 20 No 12 (2022)
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CIRCUMVENTING THE ARBITRATION AGREEMENT IN CONSTRUCTION CONTRACTS: NEW FRONTIERS IN TINDAK MURNI SDN BHD V JUANG SETIA SDN BHD
A.M. Abdul Razak , S. MohdZin , N.E., Rahmat , and N.H., Fathi
Abstract
The arbitration agreement in standard form construction contracts is rampant in the industry whereby parties chose in advance their preferred dispute resolution method should the need for it arises. There are a plethora of cases where the courts have taken an active step to uphold contractual parties' autonomy in determining their rights and obligations arising from their contractual relationship, including the stipulation as to agreement to arbitrate their dispute and differences. Using a doctrinal study, this paper examines the legal position concerning arbitration agreements, especially dealing with a unilateral attempt to divert disputes or differences to a civil suit in Court. Tindak Murni v Juang Setia cemented the position of the law regarding the courts' powers in safeguarding the arbitral process, which is consistent with practices in the United Kingdom and Singapore. Construction industry players are recommended to pay close attention to their dispute resolution clauses to avoid such matters escalating to a seemingly endless litigation process. Should an arbitration agreement be included in the construction contract, parties should bear in mind the steps taken to avoid being posited as acquiescing to the court proceeding and abandoning the arbitral process.
Keywords
Arbitration Agreement, Construction Contract, Stay of Proceedings, Judgment in Default, New Frontiers
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