1. ) Bina Puri Sdn Bhd v 1. ) Kerajaan Malaysia (WA-24C(ARB)-50-11/2023)

BINA PURI SDN BHD (No Syarikat: 23296-X)

BERINGIN WAJA SDN BHD (No Syarikat: 707858-H) (berniaga di bawah usahasama di bawah nama Konsortium Bina Puri-Beringin Waja) …PLAINTIF-PLAINTIF

UNITED OVERSEAS BANK (MALAYSIA) BHD (No Syarikat: 271809-K) …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT (Enclosure 1 & 3) [1] The Plaintiffs herein have applied to this Court under enclosure 1 (“Enclosure 1”) for inter alia: S/N Hjvsq8xGVUCfLSugslgyEw 3 1.1 a declaratory order that the Defendant’s be restrained from calling on the Plaintiff’s Bank Guarantee dated 2.1.20219

1.2 a declaration that the call by the Kerajaan Malaysia (“D1”) on the Advance Guarantee is not valid;

1.3 an injunction to prevent United Overseas Bank (Malaysia) Bhd (“D2”) from making any payment to D1 pursuant to the Advance Guarantee until disposal of the Arbitration proceedings between the Plaintiff and D1;

1.4 an injunction to prevent D1 from receiving, using or dealing with the amounts under the Advance Guarantee until disposal of the Arbitration proceedings between the Plaintiff and D1 (Injunction Application); and

1.5 an order that the Plaintiff is to refer the dispute between the parties to Arbitration within 14 days. [2] There is also enclosure 3 (“Enclosure 3”) which has been fixed to be heard together with Enclosure 1 which is for the inter partes hearing of an ad interim injunction granted by this Court on 14.11.2023 for a similar injunction against the Defendants up to the disposal of Enclosure 1 via the Ex Parte application of Enclosure

[3] For the record the Plaintiff had agreed to withdraw the matter against the Second Defendant, United Overseas Bank (Malaysia) Berhad, on 5.12.2023. S/N Hjvsq8xGVUCfLSugslgyEw Brief Background Facts [4] The Plaintiffs were constructing the Malaysian embassy building in Moscow when the Russian-Ukraine War (“War”) disrupted the works. That constituted a force majeure event under the Contract. Under such circumstances, the Contract stipulates that it may be terminated by mutual agreement (Clause 67). [5] The 1st Defendant (“D1”) advanced a sum of RM6 million to the Plaintiffs secured by an Advance Guarantee issued by D2. By Clause 57 of the Contract, this is to be recouped from the value of the Plaintiff’s works. There were uncertified works, additional works and loss and expense claims by the Plaintiffs which were unpaid at the point in time when parties negotiated a mutual agreement to terminate the Contract for force majeure. [6] The value of uncertified works, additional works and loss and expense claims claimed by the Plaintiff are:

Unpaid value of works done 1,989,557.19 2. Additional works – security of site during event of force majeure 1,900,000.00 3. Loss and expense claims (EOT 1 to 5) 19,783,729.11 4. Loss and expense claims (EOT 6 to 10) 8,446,557.49 5. Loss and expense claims (EOT 11-12) 2,419,209.00 Total 34,539,052.80 These will be elaborated below. S/N Hjvsq8xGVUCfLSugslgyEw [7] Three Mutual Termination Agreements (“MTAs”) were prepared by D1. D1’s positions in these 3 MTAs are as follows: MTA Payment to be made to Plaintiff Performance Bond MTA 1 Acknowledged need for payment, but no amount specified 100% of Performance Bond to be called upon MTA 2 1,436,181.57 50% of Performance Bond is to be called upon MTA 3 No payment Not called upon [8] The 3 MTAs were not acceptable to the Plaintiff because:

8.1 There is a substantial discrepancy between the Plaintiff’s claim of more than RM30 million, and D1’s offer of payment. In MTA 3, D1 retracted its offer to make any payment to the Plaintiff despite acknowledging that payment is due under MTA 1 and MTA 2.

8.2 The intention of D1 to call on the Performance Bond is in breach of the Contract, because the Performance Bond can only be called upon due to performance related issues and force majeure is acknowledged in the Contract as being an issue that is not due to the fault of any party (Clause 67). [9] When parties could not agree on the terms of MTA 3, D1 unilaterally terminated the Contract. S/N Hjvsq8xGVUCfLSugslgyEw [10] D1 thereafter called on the Advance Guarantee Analysis & Findings [11] It is to be noted that apart from the brief facts as stated above, the following are some of the salient facts which this Court had to considered when coming to its decision which inter alia consists of:- a. there were 2 tranches of advance payments made by D1 to the Plaintiff with the 1st tranche of RM10million fully recouped and the 2nd tranche of RM6million was advanced (2nd Advance) pursuant to a Supplemental Agreement dated 6.3.2019 (“SA”); b. to secure the 2nd Advance the Plaintiff furnished to D1 an Advance Guarantee issued by D2; and c. in the midst of construction the War happened. [12] D1 had argued in opposition to the Injunction Application that section 29 of the Government Proceedings Act 1956 and section 54 of the Specific Relief Act 1950 prevents an Injunction from being obtained against D1 as the Government. The relevant provisions are as follows:- “Section 29 of the Government Proceedings Act 1956

In any civil proceedings by or against the government the court shall, subject to this act, have power to make all such orders as it S/N Hjvsq8xGVUCfLSugslgyEw has power to make in proceedings between subjects, and otherwise to give such appropriate relief as the case may require: Provided that-

where in any proceedings against the government any such relief is sought as might in proceedings between subjects be granted by way of injunction or specific performance, the court shall not grant an injunction or make an order for specific performance, but may in lieu thereof make an order declaratory of the rights of the parties Section 54 (d) of the Specific Relief Act 1950 An injunction cannot be granted:

to interfere with the public duties of any department of any Government in Malaysia, or with the sovereign acts of a foreign Government” [13] In support of their contention, the learned Senior Federal Counsel (SFC) had relied on behalf of D1 to certain cases in particular the Supreme Court case of Government Of Malaysia v Lim Kit Siang; United Engineers (M) Bhd V Lim Kit Siang [1988] 2 MLJ 12 where the Federal Court in a majority judgment held in essence that section 29 of the Government Proceedings Ordinance 1956, had the effect that no injunction whether directly or indirectly could be issued against the government and that the refusal to grant the injunction was also consistent with paragraphs (d) and (k) of section 54 of the Specific Relief Act so that no injunction can be granted to “interfere with the public duties of any department of government” nor can it be granted “where the applicant has no personal interest in the matter”. S/N Hjvsq8xGVUCfLSugslgyEw [14] This above proposition of law was as submitted by the learned SFC to be followed in various other cases such as in the Federal Court case of YKK (Malaysia) Sdn Bhd v. Pengarah Tanah Dan Galian Johor [2021] 1 LNS 930 and the Court of Appeal in Tan Bun Teet & Ors v Mentri Sains, Teknologi dan Inovasi Malaysia & Ors [2013] 3 CLJ 1115. I must however categorically point out that in the former case, the decision on the issue of an injunctive relief against the Government was merely a dicta as the case therein was in whether an order for specific performance could be issued against the Government. [15] On the other had counsel for the Plaintiff here had attempted to submit that the cases referred to by the SFC can be distinguished as the law therein were not so clear cut as there has been cases where the Federal Court and Court of Appeal have allowed for injunctions against the Government. To this counsel for the Plaintiff referred to Sabil Mulia (M) Sdn Bhd v Pengarah Hospital Tengku Ampuan Rahimah & Ors [2005] 3 MLJ 325; [2005] 2 AMR 502; [2005] 2 CLJ 122 and the case of Minister Of Finance, Government Of Sabah v Petrojasa Sdn Bhd [2008] 4 MLJ 641; [2008] MLJ 313. [16] I have read Sabil Mulia (M) Sdn Bhd (supra) where I have observed that the Court of Appeal held the courts have jurisdiction to grant interim and permanent injunctions against any servant of the Government. Accordingly, there was no jurisdictional bar to the High Court granting the instant appellant the injunction it sought against the first respondent, the director of the hospital. S/N Hjvsq8xGVUCfLSugslgyEw [17] I have also since read Petrojasa Sdn Bhd (supra) where the Federal Court was dealing with the provisions of the Courts of Judicature Act 1964 (the “CJA”). Section 25(2) and para 1 of the Schedule which related to the issue of a mandamus for the enforcement of the rights conferred by Part II of the Constitution, or any of them, or for any purpose which the Federal Court held includes a Minister of a government and that mandamus may be issued against the appellant therein i.e the Minister of Finance. [18] Based upon my reading of the aforesaid cases, I do hold that I am bound by the doctrine of stare decisis with the decision of the majority of the Supreme Court in Lim Kit Siang (supra) and that both Sabil Mulia (M) Sdn Bhd (supra) and Petrojasa Sdn Bhd (supra) are both decisions pertaining to injunctions against a servant of the Government which would by extension also refer to a Minister of the Government, and thus can be distinguished with the case of Lim Kit Siang (supra). [19] With respect based on my reasonings above, I am therefore unable to agree with the High Court case of PWC Bina Sdn Bhd v Kerajaan Malaysia [2016] 1 LNS 1233 which had decided that a temporary injunction could be granted against the Government. [20] In the circumstances, there is no need for me to go into the issues of unconscionability raised by counsel for the Plaintiff as I have held that the law is that there can’t be injunctions granted against the Government. S/N Hjvsq8xGVUCfLSugslgyEw [21] Accordingly, I hereby dismiss Enclosure 1 in this matter as well as Enclosure 3 with costs to be awarded to the Defendant for both enclosures. Dated: 12th day of August 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Chan Kheng Hoe and Tey Kai Yang (chambering) (Messrs Kheng Hoe & Lee Yuen] COUNSEL FOR THE DEFENDANT: Anisah Normah Binti Muhammad Nor, Senior Federal Counsel (Jabatan Peguam Negara]