Court of Appeal finds filing of pleadings prior to applying for stay of proceedings showed intention to proceed with trial

28 August 2020

Yeo Eng Lam v Infinity Vantage Sdn Bhd [2020] 6 CLJ 616

The matter before the Malaysian Court of Appeal in Yeo Eng Lam v Infinity Vantage Sdn Bhd concerned an alleged breach of a joint venture agreement. Before filing an application to stay court proceedings under section 10(1) of the Malaysian Arbitration Act 2005, the defendant had taken several steps, including applying to disqualify the plaintiff’s solicitors and filing a statement of defence and counterclaim. Although the statement of defence had included a prayer to refer the matter to arbitration, the Court of Appeal held that it was neither an express nor unequivocal reservation of its rights to refer the matter to arbitration, as it included a counterclaim. Additionally, although the Deputy Registrar had directed the defendant to file the statement of defence, the defendant could have easily informed the Deputy Registrar that an application for a stay would be made. Further, the application to disqualify the plaintiff’s solicitors was done on the premise that they might be called as witnesses. For these reasons, the court found that there was no indication or a clear and unequivocal reservation of the defendant’s right to refer the matter to arbitration, the absence of which confirmed the Court of Appeal’s findings that the defendant had taken active steps to litigate the matter in court.