Case Review Jati Erat Sdn Bhd v City Land Sdn Bhd

By wafiyuddin13401 | Updated: June 15, 2024, 5:26 p.m.

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Jati Erat Sdn Bhd v City Land Sdn Bhd [2002] 1 CLJ 346
Facts of the Case
*  The plaintiff seek for Mareva Injuction to be granted by the High Court despite the case has been heard in the proceeding of arbitration under Kuala Lumpur Regional Centre for Arbitration Rules (KLRCA Rules). The plaintiff relied on art.26(3) of KLRCA Rules:
*  “A request for interim measures addressed by any party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate or as a waiver of that agreement”
Legal Issues
*  Whether the High Court has jurisdiction to grant Mareva injunction for the purpose of restraining the disposal of assets which are the subject matter of the aforesaid arbitration proceedings?
Ground of Judgement
*  the High Court was asked to decide whether it had the authority to issue a Mareva Injunction in the context of an ongoing arbitration governed by the Kuala Lumpur Regional Centre for Arbitration Rules (KLRCA Rules). The court considered the relevant laws and previous cases to determine its jurisdiction.
*  Jurisdiction of the High Court: The High Court typically has the power to issue Mareva Injunctions, which are orders to freeze assets to prevent them from being moved or sold while a case is ongoing. However, the court found that its jurisdiction is limited when it comes to arbitrations under the KLRCA Rules.
Ground of Judgement
*  Arbitration Act 1952: The court looked at the Arbitration Act 1952 and determined that certain sections do not apply to arbitrations conducted under the KLRCA Rules, except for the enforcement of an award. This means that the High Court's usual powers to intervene in arbitrations are restricted.
*  Respect for Arbitration Process: The court emphasized the importance of respecting the arbitration process and not interfering with it unless there is a clear legal basis to do so.
*  Requirements for Mareva Injunction: The court also noted that to obtain a Mareva Injunction, the applicant must show a strong case, evidence of assets within the jurisdiction, and a risk that the assets will be moved or sold before the case is decided. Jati Erat Sdn Bhd did not meet these requirements.
*  Court’s Decision: Based on these points, the High Court decided that it did not have the jurisdiction to grant the Mareva Injunction in this case, and the application was dismissed
Judgement
*  The court held that the plaintiff has not established the essential elements of a strong prima facie case and the real risk of dissipation of assets from jurisdiction. Therefore, the plaintiff’s application was dismissed.
Significance of this case in the development ofArbitration Law in Malaysia
*  Under Para.6 of the Schedule to the CJA 1964, the High Court has jurisdiction to grant Mareva injunction. However, the issue arises when the proceeding was held through arbitration proceeding, and not via court proceeding. Therefore, as the arbitration proceeding was held under KLRCA, the court did not has power to interfere in the arbitration proceedings as stated in S.34 (1) of AA 1952. The court shall not interfere in the arbitration, and shall respect the prior arbitration proceedings.

Case Review Jati Erat Sdn Bhd v City Land Sdn Bhd

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