In Jan De Nul NV v Inai Kiara Sdn BHd [2006] 2 CLJ 46, the Malaysian Court of Appeal was required to consider whether a dispute concerning allegations of breach of fiduciary duties, conspiracy to defraud and other tortious claims fell within the scope of an arbitration clause. The clause, which was contained in a Memorandum of Understanding (MOU) pursuant to which the respondent company received the use of a dredger from one of the appellant companies, referred “any dispute or difference arising out of and/or in connection with” the MOU to arbitration.

The court held that as the “dispute between the parties is of a non-contractual nature it does not come within the scope of the arbitration clause”. In doing so, the court stated that it considered the MOU to be simply “background against which the conduct [complained of] occurred”. Consequently, the court allowed the respondent to continue its claims in the Malaysian court notwithstanding the fact that the appellants were pursuing their own claims in a Swiss arbitration.

Given the breadth of the arbitration clause, the decision is at first glance surprising, but the court was clearly heavily influenced by the lack of connection between some of the claims and the MOU. The decision makes it clear that decisions as to whether a particular arbitration clause covers claims that are ancillary to the contract will depend on (i) the precise wording of the particular clause, and (ii) the facts of each dispute. In other words, precedent cases will be of limited use in determining the outcome