UM V EJP SDN BHD [2026] LCR 4 (FC)

Federal Court (Putrajaya)

Waiver of Right to Arbitration by Taking Steps in Court Proceedings

1. The Defendant, EJP, entered into a Memorandum of Agreement with the Plaintiff, UM to be its civil and structural engineering consultant. Arbitration clause requiring any arise disputes to be resolve through arbitration is included.
2. Following delays to the completion of the project, among others, the Plaintiff alleged the Defendant to have failed to fulfil its obligation and commenced court proceedings in the High Court through filing of a writ and a statement of claim.
3. The Defendant entered appearance as a respond to the Plaintiff’s action. Additionally, the Defendant obtained two extensions of time and served a notice to produce documents to the Plaintiff before filing its own defence.
4. The Defendant applied to the High Court a stay of proceedings under section 10(1) of the Arbitration Act 2005 (“Act 646”) to refer the matter to the arbitration. However, the application was dismissed as the Court perceives Defendant’s previous action of entering appearance, obtaining two extensions of time and serving notice to produce documents shows intention to proceed with litigation and was deemed to have already taken steps in the proceedings.
5. The High Court found the Defendant’s action waived its right to rely on the arbitration clause and refuse to grant a stay.
6. Upon appeal, the Defendant argued that its actions were merely procedural and did not constitute submission to the Court’s jurisdiction. The Court of Appeal reconsidered the High Court’s decision and reverse the decision.
7. Aggrieved by the reversal, the Plaintiff appeal to the Federal Court.

1. Whether the said request for an extension of time to file defence and service of notice to produce documents amount to steps in the proceedings and waived the Defendant’s right to obtain a stay under section 10(1) of the Arbitration Act 2005 (“Act 646”)?

(1) Whether request for an extension of time to file defence and service of notice to produce documents amount to steps in the proceedings and waived the Defendant’s right to obtain a stay under section 10(1) of the Arbitration Act 2005 (“Act 646”)?

(a) Request for an extension of time to file defence

(i) The Federal Court were of the view that mere indication of an intention to file a defence, without an actual step, does not constitute an unequivocal intention to proceed with the suit.

(ii) The Court explained on what would constitute a step in the proceedings –

“Had consent been refused and no agreement reached, a formal application to the Court to sought an order would have been required and constituted a step in the proceedings.” ([para 67])

(b) Service of notice to produce documents

(i) The Federal Court answered in the negative, stating their view that any assumptions must be objectively arrived by reference to evidence.

(ii) In the issue of service of notice to produce documents, the learned Judges unanimously agreed that such documents cannot be classified as pleadings –

“The nature of a notice to produce documents is to enable the inspection of documents referred to in the pleadings.” (para [131])

(iii) Thus, the Court held that the issuance of notice is reasonable and necessary. The learned Judges were of the view that serving such notice does not indicate waiver to Defendant’s right to arbitration.

1. The Federal Court affirmed the Court of Appeal’s decision and dismiss the Plaintiff’s appeal with costs. The court ruled that the Defendant’s request cannot be objectively construed to amount to “steps in the proceedings” within the meaning of section 10(1) of the Arbitration Act 2005 (“Act 646”) nor does it waive the Defendant’s right to arbitrate the dispute according to the arbitration clause.

1. Not all requests for an extension of time amount to a step in the proceedings.
2. Despite a relatively high number of cases with almost the same facts, the Court remarks that blanket proposition could distracts attention from the true inquiry of the matter which need a holistic assessment of the circumstances.