JUDGMENT

Hasnah Mohammed Hashim FCJ:

[1] The appeal raised questions about the significance and the enforceability of oral pronouncements by an arbitral tribunal in bifurcated arbitration proceedings governed by the Arbitration Act 2005 (AA 2005) and KLRCA Arbitration Rules, now known as the AIAC Arbitration Rules 2021 (Rules 2021). In particular, whether an oral decision by an Arbitral Tribunal on liability being a decision on the substance of a dispute, is a valid decision within the meaning of the AA 2005. We heard oral submissions by all learned counsel representing the respective parties and at the end of those submissions we indicated that we needed time to consider the respective submissions. We have now reached our decision and what follows below are our deliberations on the issues raised and our reasons as to why we have so decided.

[2] On 3 November 2022, Telekom Malaysia Berhad (Telekom) obtained leave to appeal on the following question of law:

Where an arbitral tribunal directs proceedings be bifurcated (with liability to be heard and decided first followed by determination of quantum, if liability is established), whether an oral pronouncement by the arbitral tribunal on liability is sufficient to (i) amount to a decision on liability and (ii) entitle the arbitral tribunal and parties to proceed with a determination of quantum, in a case where the arbitration is governed by:

(a) the Arbitration Act 2005 (AA 2005); and

(b) the KLRCA Arbitration Rules (AIAC Arbitration Rules 2021).

Factual Background

[3] In 2003, the Selangor State Government (the State Government) awarded a project to the Respondent, Obnet Sdn Bhd (Obnet), to connect all State Government departments, statutory bodies, municipals/local authorities, Government-linked companies and Government agencies via a high-speed broadband network (SELNET Project). Two agreements were executed between Obnet and the State Government, that is, the Selangor Broadband Internet Access Agreement dated 10 October 2003 and the Subscription Agreement dated 23 September 2005 (SELNET Agreements).