Introduction
When disputing parties have agreed to resolve matters through arbitration, courts are expected to respect this choice. However, actions taken during litigation, particularly in its early stages, can potentially compromise this right.
The recent Court of Appeal decision in Esa Jurutera Perunding Sdn Bhd v Universiti Malaya [2025] 2 MLJ 618 serves as a timely reminder of how carefully one must tread when seeking procedural indulgences while preserving the right to arbitrate.
This case turned on the meaning of “taking any other steps in the proceedings” under section 10(1) of the Arbitration Act 2005 (“AA 2005”).
Brief facts
The appellant, Esa Jurutera Perunding Sdn Bhd (“the Defendant”), was appointed as a civil and structural consultant by Universiti Malaya (“the Plaintiff”) under a Memorandum of Agreement dated 3 June 2008 which included an arbitration clause under clause 4 of the conditions of engagement.
Despite this clause, the Plaintiff filed a Writ and Statement of Claim in the High Court on 6 October 2022. The Defendant entered an appearance and sought two extensions of time to file its defence, which the Plaintiff granted.
On 30 November 2022, the Defendant issued a notice to produce documents and notified the Plaintiff of its intention to file its defence. However, on 1 December 2022, the Defendant issued a Notice of Arbitration and filed an application to stay the court proceedings under section 10(1) AA 2005.
The High Court dismissed the Defendant’s stay application and held that the Defendant’s prior conduct in requesting extensions of time and serving the notice to produce constituted steps in litigation, thereby waiving its right to arbitration. The Defendant appealed.
DBKL sought to set aside the Award, arguing that the arbitrator had flagrantly disregarded established Malaysian law and substituted his own legal theories without allowing parties to address them.
