Introduction

Disputes are a very common feature in construction industry. They almost occur daily and if you are
fortunate, you can solve it amicably. However, the number of disputes and the interest of the parties
involved in the contract will influence the complexity of the disputes. There are many causes why these
disputes keep occurring in construction industry, such as poor communication between the parties
involved, the nature of the contract, changes and late payment from the employer, design inadequacy and
lack of coordination from the consultant, poor management and delayed payments to subcontractors from
the main contractor, and poor standards of workmanship by the subcontractors. Therefore, many people
say that construction industry is a risky business and we need some methods to settle these disputes.
Generally, there are only two ways of dispute settlement, i.e. by litigation and by non-litigation or ADR.
Litigation can be defined as a dispute settlement procedure which takes place in the courts. While ADR
(alternative dispute resolution) is processes other than litigation in which impartial person assists those in
a dispute to resolve the issues between them. There are many methods included in ADR. One of them is
arbitration. Arbitration can be defined as a consensual and private process for the submission of a dispute
for a decision of a tribunal, comprising one or more independent third persons. Once the tribunal is
Enforcement of Arbitration Award
Overview on Writs of Execution, Garnishee Proceedings and Attachment
Seng Hansen
Master Student of Construction Contract Management UTM
Email: hansen_zinck@yahoo.co.id
for a decision of a tribunal, comprising one or more independent third persons. Once the tribunal is
appointed, they must remember that the settlement of a dispute is based on ex aequo et bono or on the
basis of equity.
By nature, decision of arbitrator (tribunal) is legally binding for parties in dispute. We called this arbitrators
decision as arbitration award or the award. The award is the document by which the arbitrator conveys his
decision to the parties, and like a court decision, it determines the matters at issue between the parties.
The Malaysian Arbitration Act 2005 section 36 (1) has clearly stated that an award made by an arbitral
tribunal pursuant to an arbitration agreement shall be final and binding on the parties and may be relied
upon by any party by way of defence, set-off or otherwise in any proceedings in any court (see also the
Indonesian Arbitration and ADR Act No. 30/1999 section 60). However, the losing party may challenge the
award by submit an application to High Court. The Malaysian Arbitration Act 2005 section 37 has already
described the procedure and grounds for setting aside an arbitration award by the High Court (compare this
with the Indonesian Arbitration and ADR Act No. 30/1999 section 70).
And what about if the losing party refuses to recognize the award that has been made by the arbitrator? For
this, both the Malaysian and Indonesian Arbitration acts have contained the recognition and enforcement
of arbitration awards sections (see section 38 of the Malaysian Arbitration Act and section 61 of the
Indonesian Arbitration Act). The main essence of these sections is that the winning party can ask for the
arbitration awards recognition and enforce it by applying to the High Court.
This paper is specifically talking about the steps that can be taken by the winning party to enforce the
award, especially relating to writ of execution, garnishee proceedings and attachment. Below is the
diagram of the given case between Skudai Heights and Pulai Construction.
1
Enforcement of the Award
We can find the definition of award in the case of Jeuro Development Sdn Bhd v Teo Teck Huat (M) Sdn
Bhd [1998] 6 MLJ 545 as the decision or determination rendered by arbitrators or commissioners, or other
private or extra-judicial deciders, upon a controversy submitted to them; also the writing or document
embodying such decision. The arbitration award is considered as a legal document and therefore it must
contain enough information, i.e. particulars of the dispute, the arguments that had been raised and where
applicable, the reasons for the decision of the tribunal. Although it is not a compulsory procedure, but the
Skudai Heights
(Employer)
Pulai Const
(Contractor)
Dispute and go
to arbitration
proceeding
1
The arbitrator
awards Skudai
Heights RM
500,000
2
Pulai Const
challenges the
award to HC
3
HC recognised the arbitration
award, but Pulai Const fails to
comply with the award
4
How to enforce
the award
5
applicable, the reasons for the decision of the tribunal. Although it is not a compulsory procedure, but the
tribunal is recommended to give their reasons for decision of the award. Why? Because if the winning party
needs to enforce the award through the court, the court will just look at the reasons for the decision and
the validity of the award without further inquiry. As we know, there are five essential elements of a valid
award, i.e. cogency, completeness, certainty, finality, and enforceability.
The common grounds for enforcement of the arbitration award
1
are:
1. Consistency and accord with submissions and evidence
2. Accuracy and enforceability
3. Finality
The figure below shows the procedure of arbitration award enforcement.
2
1. Nigel M. Robinson, et al. 1999. Construction Law in Singapore and Malaysia. 2
nd
Edition. Singapore: The Butterworth
Group. Page 408-411.
Therefore, before we go to the court and ask for enforcement of the award, we must ensure some matters
first so that it will not become the issues of the validity of the awards enforcement. Below are some cases
which relates to the validity of arbitration award and the enforcement of the award.
In Belsfield Court Construction Co v Pywell 1969, it was argued that the award did not conform with the
points of claim and counterclaim because it contained mathematical inconsistencies, but Willis J found
incorrect the submissions of counsel that the pleadings can be looked at and thus there could be no error in
law on the face of the award. In Ames v Millward 1818, it was held that the reasoning must be consistent
and lead logically from the evidence to the actual decision. In Official Assignee v Chartered Industries of
Singapore 1978, the award was set aside because the arbitrator left open some of the points with which he
had to deal in reaching his decision, resulting in possible uncertainty.
Moreover, in Margulies Brothers Ltd v Dafnis Thomaides and Co 1958, Diplock J set aside an award as
being too imprecise to enforce, with the words: an award for the payment of money shall be in a form
which is capable of being enforced in the same manner as a judgment. That this remedy should be available
is one of the main purposes of an arbitration agreement and I have no hesitation in holding that I have
jurisdiction to remit an award for the payment of money so that it may be amended to putit in a form in
which it will be so enforceable.
While in Hiap-Taih Welding & Construction Sdn Bhd v Bousted Pelita Tinjar Sdn Bhd, it reads that the
plaintiffs cause of action is the right to enforce the award.
2
Basically, enforcement of arbitration award is of the same nature with enforcement of any court decision.
Domestic awards are enforced by the winning party making an application to the High Court for leave
(permission given by the court) to enforce the award. Where leave is given, judgment may be entered and
all modes of enforcement available for the enforcement of a civil proceedings in High Court will be available
to the party enforcing the award. For foreign arbitral awards, they may be enforced by way of the New York to the party enforcing the award. For foreign arbitral awards, they may be enforced by way of the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards or simply called New York
Convention.
There are many types of enforcement, i.e. writ of execution, garnishee proceeding, attachment, equitable
execution, charging order, appointment of receiver, etc. But let us focus on the first three mechanisms and
talk about their definition, procedure and some possible legal issues that may be encountered when
implementing them.
1
st
Method: Writs of Execution
In civil proceedings, a writ uses in the enforcement of a judgment. Writs of execution include a writ of fiery
facias, a writ of possession, a writ of delivery, and a writ of sequestration. Fiery facias (fi.fa.) comes from
the Latin words, means you should cause to be done. It is a High Court writ of execution to enforce the
payment of a debt when judgment (can be by litigation or arbitration) has been entered against the debtor.
A writ of possession is a writ directing the High Court Enforcement Officer (the sheriff) to enter upon land
to give vacant possession to the claimant. It is used to enforce a judgment or order for the possession of a
land. A writ of delivery is a type of writ of execution to enforce a judgment or order for the delivery of
goods. It directs the Enforcement Officer to seize the goods and deliver them to the claimant or to recover
their assessed value. While sequestration means a court order in the form of a writ to commissioners,
ordering them to seize control of a persons property.
3
Since the arbitration award is normally related to
some amount of money which the losing party must pay to the winning party, the type of writ of execution
usually be used is a writ of fiery facias.
3
2. Haniz Zuraiha bt Zaharullil. 2009. Enforcement and Challenging of Arbitration Award. M.Sc. Johor Bahru: UTM. Page 56.
3. Oxford Law Dictionary. Seventh Edition. See page 229, 502 and 593.
In Malaysia, this method is provided for by the section 3 of the Debtors Act 1957 and the Order 47 of the
Rules of the High Court 1980. The writ of Form 88 of Order 47 commands the sheriff to seize and sell the
property of the judgment debtor to such an extent as is necessary to satisfy the judgment sum. After the
sheriff has made the seizure and during the continuation of the seizure, any alienation of the property by
the judgment debtor by way of sale, gift, mortgage or otherwise shall be void against the sheriff and any
person on whose behalf the property is seized. The writ issued in Form 88 must be supported by affidavit.
In Datuk Wong Yit Ming v Sabah Inn S/B, the writ of seizure and sale was issued against the goods of
respondent found in petitioner premise rented to the respondent
4
.
Below are some possible legal issues when employing writ of execution.
1. There are joint judgment debtors
5
. Whether judgment creditor could choose on whom to enforce
judgment sum. Whether issue of statutory notice against one respondent irregular.
In the case of Dynasty Rangers Sdn Bhd & Anor v Perak Meat Industries Sdn Bhd [2002] 5 MLJ 291, the
petitioner applied to wind up the respondent company on the ground that it was unable to pay its debt. The
debt arose from an arbitration award. In the final award, the arbitrator had adjudged and directed the
respondents to pay two sums to the petitioner. The respondent opposed the petition solely on the account
what he perceived to be an irregularity in that the arbitration award was against two joint respondents. It
was argued that it was not opened to the petitioner to proceed against only one respondent. Held, allowing
the petition with costs: a) When a judgment debtor was under a joint liability with another to pay a debt,
either of them may have to bear the whole of that liability all by himself to the creditor up to the limit of
the judgment sum. The judgment creditor is at liberty to choose on whom to enforce the judgment sum
whether only on one judgment debtor individually or on both collectively. b) There was nothing irregular in
the statutory notice. The judgment debtor had full knowledge of what transpired therein.
2. The second issue is about the validity of the award. Whether a joint valuation of the arbitrator with 2. The second issue is about the validity of the award. Whether a joint valuation of the arbitrator with
parties chosen form of dispute resolution was to be considered expert determination/valuation or
arbitration award.
We can see the decision in Red Rock Construction Sdn Bhd v People Realty Sdn Bhd [2004] 5 MLJ 235. In
this case, the defendant employed the plaintiff contractor to carry out construction works in a development
project. A dispute arose between them regarding the value of work done. Both parties agreed to request
the arbitrator to do a joint valuation with them of the work done. They also mutually agreed to abide by
and accept the arbitrator's valuation without dispute. The arbitrator produced a joint valuation on 13
September 1999. The plaintiff applied to the High Court for leave to enforce the award. The issue that arose
in this application was whether the joint valuation on 13 September 1999 was an arbitration award. Held,
allowing the application: a) both parties have agreed to accept any decision made by the arbitrator, b) the
indicia (of the existence of arbitration) were: (1) there is a dispute or a difference between the parties; (2)
the dispute or difference has been remitted by the parties to a person to resolve in such a manner that he
was called on to exercise a judicial function; (3) the parties must have been provided with an opportunity to
present evidence and/or submissions in support of their respective claims in the dispute; and (4) the parties
have agreed to accept his decision.
4
4. Jamaluddin Yaakob. 2012. Enforcement of Judgments. (Lectures Note, unpublished). UTM.
5. A person against whom a judgment or order has been given or made regarding the payment of a debt.
2
nd
Method: Garnishee Proceedings
Garnishee proceedings normally is used when the money is in the hands of third parties. The definition of
garnishee is one who has been warned by a court order that a debt is to be paid to some person who has
obtained a garnishee order against his creditor, and not that creditor. While garnishee proceedings means
the proceedings enabling a judgment creditor to have assign to him the benefit of any debt owned by the
garnishee to the judgment debtor. For simple illustration, the main contractor owes (still not yet pays) the
subcontractor RM 1,000. Meanwhile, the employer owes (still not yet pays) the main contractor RM 1,000.
The subcontractor may commence proceedings to obtain a garnishee order so that the employer will pay
the RM 1,000 direct to the subcontractor.
Garnishee proceedings are provided for in order 49 rule 1(1) of the RHC 1980. The essential prerequisite of
garnishee proceedings is that the sum money in the hands of the judgment debtors debtor must be certain.
In Hong Kong & Shanghai Banking Corp v Goh Su Liat, the defendant was the judgment debtor, the
plaintiff was the judgment creditor and Telecommunication Authority in Singapore was the garnishee. The
judgment debtor was an employee with the garnishee authority. The judgment creditor obtained a
judgment order against the judgment debtor in relation to payment of credit cards.
Below are some possible legal issues when employing garnishee proceedings.
1. It can be happened when the employer refuses to pay the subcontractor in garnishee proceedings
based on that he has no more obligation to pay the main contractor (already gives final payment) and
therefore the subcontractor cannot ask him to pay on behalf of the main contractor.
In the case of Thamesa Designs Sdn Bhd & Ors v Kuching Hotels Sdn Bhd [1993] 3 MLJ 25, the appellants
were the NSCs of the judgment debtor and as a result of non-payment, he sued the judgment debtor which
had remained unsatisfied. They then proceeded with garnishee actions against the respondents (the had remained unsatisfied. They then proceeded with garnishee actions against the respondents (the
employer of the judgment debtor). At the trial, the common issue was whether there was any money due
or accruing to the judgment debtor from the respondent at the time the respective garnishee orders were
served on the respondent. The learned trial judge held that the appellants did not have the right to garnish.
The appellants appealed. Held, allowing the appeal: a) the employer should not be entitled to claim for LD
under the said contract, b) as the result, the certificate of final payment was invalid and not binding, c) the
respondents cannot raise the issue in arbitration. In conclusion, the court of appeal made absolute the
appellants garnishee orders nisi.
2. In the event of contract termination between the employer (garnishee) and the contractor (the judgment
debtor), whether the judgment creditor can ask for the contractors retention money.
In the case of Lee Kam Chun v Syarikat Kukuh Sdn Bhd [1988] 1 MLJ 444, the plaintiff (the judgment
creditor) had obtained judgment against the defendant (the judgment debtor, main contractor) for work
done. Due to certain breaches of the contract, the garnishee (the employer) terminated the contract with
the main contractor. The plaintiff asked for garnishee order and it was allowed. The garnishee appealed on
the ground that the retention money was not due and payable to the judgment debtor. Held, dismissing the
appeal: the retention money here was declared as being held by the garnishee on trust for the judgment
debtor. The implication is that the retention money would belong beneficially to the judgment debtor. In
conclusion, the appeal by the employer (garnishee) was dismissed and the garnishee order (from the
judgment creditor) was confirmed.
5
3
rd
Method: Attachment
Oxford Law Dictionary defines attachment as a court order for the detention of a person and/or his
property
6
. It is also can be defined as: 1) enforcement of direction to pay money by attachment of earnings
order, and 2) attachment of debts relates to procedure in garnishee proceedings.
It was suggested by the common law commissioners in 1853 that a remedy might be made available to
creditors, after judgment, against debts due to their debtors. Accordingly, the Common Law Procedure Act
1854 enacted that any creditor, having obtained judgment in the superior courts, should have an order that
the judgment debtor might be examined as to any debts due and owing to him before a master of the
court. The rules and regulations under the Judicature Act 1873 retained the process for attachment of debts
as established by the Procedure Act of 1854. On affidavit
7
that the judgment was still unsatisfied, and that
any other person within the jurisdiction was indebted to the judgment debtor, the judge was empowered to
attach all debts due from such third person (called the garnishee) to the judgment debtor, to answer the
judgment debt. This order binds the debts in the hands of the garnishee, and if he does not dispute his
liability execution issues against him at once. If he disputes his liability the question must be tried. These
provisions were, by an order in council of the 18th of November 1867, extended to the county courts
8
.
Below are some possible legal issues when employing attachment.
1. It can be happened when the plaintiff who has obtained judgment against the defendant, shortly after
the defendant goes into insolvency or winding up. Whether an attachment can be put into force after the
commencement of the winding up.
In the case of Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd & Anor [1992] 1 MLJ 571, the In the case of Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd & Anor [1992] 1 MLJ 571, the
plaintiffs (the contractor) has obtained judgment against the defendant (the employer) due to the non-
payment from the employer. An agreement was entered whereby the defendant sold their land to other
party (the second defendant). Petitions to win up the first defendant by the plaintiffs and other parties were
presented and subsequently the plaintiff entered two prohibitory orders. They also applied to the High
Court that the land sale agreement was void. The second defendant applied to High Court to set aside the
plaintiffs injunction on the ground that once the winding-up petitions had been presented against the first
defendant, the plaintiffs had no right to enter the prohibitory orders. Held, allowing the second defendants
application. Any attachment, sequestration, distress or execution put in force against the property, be it
movable or immovable, of the company after the presentation of a petition to wind up the company shall
be void.
In the case of Tye Chwee Hoon v Cayman Commodities (M) Sdn Bhd & Anor [1990] 2 MLJ 408, the similar
thing happened. The plaintiff judgment creditor obtained a garnishee order against the second defendant as
garnishee. At the hearing of the application to show cause, the senior assistant registrar refused to make
the garnishee order absolute and one of the grounds relied by him was that as the first defendants were
subject to a winding-up petition in the Penang High Court, the proposed attachment or execution was void.
(See also the case of Re Barrier Reef Finance & Land Pty Ltd (1988) 6 ACLC 827, (1988) 13 ACLR 708).
6
6. Oxford Law Dictionary. Seventh Edition. See page 48.
7. A sworn written statement of evidence used mainly to support certain applications and, in some circumstances, as
evidence in court proceedings. (Oxford Law Dictionary, page 23).
8. http://www.1911encyclopedia.org/Attachment
2. Whether a judgment must be in existence before any attachment proceedings can be taken.
In the case of Ramalingam s/o Muthusamy v Chong Kim Fong; Lembaga Kemajuan Tanah Persekutuan
Garnishees [1978] 1 MLJ 83, Mr Kulasegaran on behalf of the garnishee, argued that the order of
attachment before judgment taken out by the judgment creditor against the judgment debtor was wrong
because there was no judgment in existence when the order of attachment before judgment was made. It
was held that section 19 of the Debtors Ordinance 1957 provides for the attachment of a defendants
property (and this includes debts due to the defendant from a third party) at any time after the issue of a
writ of summons and under certain conditions as set out in the section. This section is clearly designed to
ensure that a plaintiff who has good cause of action against a defendant is not deprived from levying
execution against the property of the defendant in the event of the plaintiff obtaining judgment in his action
against the defendant.
Conclusion
As I have said earlier, enforcement of arbitration award is of the same nature as enforcement of judgments.
There are many types of enforcement; here I only focus on writ of execution, garnishee proceedings and
attachment. In implementing these mechanisms, we may face some difficulties and legal issues.
In my opinion, since enforcement of judgments is basically a civil claim, then there must be a limitation
period. Therefore, for anyone who would like to enforce their arbitration award through the court
proceedings, he must bring it within six years from the date on which the cause of action accrues.
References
Statutes Referred to:
The Indonesian Arbitration and ADR Act No. 30/1999.
The Malaysian Arbitration Act 2005.
Books Referred to:
Haniz Zuraiha bt Zaharullil. 2009. Enforcement and Challenging of Arbitration Award. M.Sc. Johor Bahru:
UTM.
Jamaluddin Yaakob. 2012. Enforcement of Judgments. (Lectures Note, unpublished). UTM.
Nigel M. Robinson, et al. 1999. Construction Law in Singapore and Malaysia. 2nd Edition. Singapore: The
Butterworth Group.
Rajoo, S., and Davidson, WSW. 2007. The Arbitration Act 2005. UNCITRAL Model Law as applied in Malaysia.
Selangor: Sweet & Maxwell Asia.
7