The plaintiff applied for Mareva injunctions against the defendants to restrain them from removing from, or otherwise dissipating, any of their assets in Malaysia up to MYR 100 million, pending the final determination of arbitral proceedings brought by the plaintiff against the defendants. The defendants contended that the High Court did not have the jurisdiction to grant the plaintiff’s application. The defendants' case was that the High Court’s power to grant interim relief in respect of arbitral proceedings:

1. was confined to the powers conferred on it in ss 11(1)(a)-(e) of the Arbitration Act 2005 (the AA 2005);
2. did not include Mareva injunctions, because the power to grant interim measures for the preservation of assets lay with the arbitral tribunal pursuant to s 19(2)(c) of the AA 2005; and
3. was limited to arrests of ships, bail or security under its admiralty jurisdiction.

The plaintiff's position was that the High Court did have the jurisdiction to grant Mareva injunctions in respect of arbitral proceedings under s 11(1)(c) of the AA 2005, and that this power was not limited to the High Court’s admiralty jurisdiction.

Section 11(1)(c) of the AA 2005 states:

Arbitration agreement and interim measures by High Court

(1) A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and the High Court may make the following orders for the party to - ...

(c) provide a means of preserving assets out of which a subsequent award may be satisfied, whether by way of arrest of property or bail or other security pursuant to the admiralty jurisdiction of the High Court; ...

Held: Judgment for the plaintiff.

The High Court’s admiralty jurisdiction is derived from s 24 of the Courts of Judicature Act 1964 (the CJA), which states as follows:

Without prejudice to the generality of section 23 the civil jurisdiction of the High Court shall include - ...

(b) the same jurisdiction and authority in relation to matters of admiralty as is had by the High Court of Justice in England under the United Kingdom Supreme Court Act 1981 ...

The English High Court's admiralty jurisdiction is contained in ss 20 and 21 of the United Kingdom's Supreme Court Act 1981 (UK) [sic: Senior Courts Act 1981 (UK)] (the SCA 1981). The United Kingdom is a signatory to the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships 1952 (the Arrest Convention 1952). The SCA 1981 gives effect to the Arrest Convention 1952, as did the earlier Administration of Justice Act 1959 [sic: 1956] (UK), which was repealed and replaced by the SCA 1981. Whilst Malaysia is not a signatory to the Arrest Convention 1952, by reason of s 24 of the CJA, the UK's admiralty jurisdiction (including the provisions of the Arrest Convention 1952 as contained in the SCA 1981) is incorporated into the Malaysian High Court's civil jurisdiction.

The AA 2005 was first amended by the Arbitration (Amendment) Act 2011 (the 2011 amendment) to allow for the arrest of ships as security for arbitration proceedings in Malaysia. Prior to the 2011 amendment, a ship could not be arrested as security for arbitration proceedings in Malaysia, unless the plaintiff could satisfy the Court of the principles set out by the English High Court in The Rena K [1979] 1 All ER 397. This was because the English High Court's admiralty jurisdiction to issue a warrant of arrest could only be exercised in support of the Court’s jurisdiction 'to hear and determine a maritime claim', and not if the substantive claim was being determined through arbitration proceedings instead of the High Court.

The AA 2005, as amended, extended the High Court's jurisdiction to grant interim relief to include arrest of ships, bail, and security in an action in rem under its admiralty jurisdiction for the purpose of providing security for an award which might be made in arbitral proceedings. The High Court’s jurisdiction to grant interim relief for arbitral proceedings under its admiralty jurisdiction was preserved in the new s 11(1)(c) of the AA 2005, as amended in 2018. This is reflected in Hansard dated 3 April 2018 at 70, where the Deputy Minister in the Prime Minister’s Department explained to Parliament: 'Selain itu seksyen 11 juga memelihara peruntukan penting membenarkan penahanan harta oleh Mahkamah Tinggi dalam konteks timbang tara tuntutan maritime dengan menggunakan bidang kuasa MLT nya untuk mengambil jaminan sementara tuntutan maritime diteruskan'. (In addition s 11 also preserves an important provision allowing the detention of property by the High Court in the context of maritime arbitration by using its jurisdiction to take security while maritime claims continue.) [Emphasis by Judge.] It is clear that the extension of the High Court's jurisdiction to grant interim relief before or during arbitral proceedings under its admiralty jurisdiction, through the amendment to s 11(1)(e) of AA 2005 by the 2011 amendment, was preserved in the new s 11(1)(c) pursuant to the 2018 amendment.

The defendants' argument that this extension of the High Court's power to grant interim relief for arbitral proceedings pursuant to its admiralty jurisdiction restricts or confines the High Court's power to grant interim relief under s 11(1)(c) of the AA 2005 to arrests, bail, or other security under its admiralty jurisdiction only, is therefore incorrect. From a plain reading of s 11(1) of the AA 2005, as amended by the 2011 and 2018 amendments, the extension of the High Court’s power to arrest ships as security for arbitral proceedings under its admiralty jurisdiction does not cancel or strip its power to grant interim relief for arbitral proceedings under its civil jurisdiction.

Pursuant to established principles of statutory interpretation, it would be wrong to conclude that the extension of the High Court's jurisdiction to grant interim relief for arbitral proceedings under its admiralty jurisdiction means the removal of its jurisdiction to grant interim relief for arbitral proceedings under its civil jurisdiction, without any express provisions in the AA 2005 to that effect. For this reason, this Court finds that, notwithstanding the extension of the High Court’s jurisdiction to grant interim relief for the arrest of ships as security for arbitral proceedings under its admiralty jurisdiction, the High Court retains its power to grant interim relief under its civil jurisdiction as a means of preserving assets for the purpose of satisfying awards which may be made in arbitral proceedings.

Accordingly, this Court has the jurisdiction to hear and decide upon the plaintiff's applications for Mareva injunctions against the defendants pending the disposal of the arbitral proceedings between them.