China Machinery Engineering Corporation v Bgmc Bras Power Sdn Bhd (WA-24C-2-01/2024)

CHINA MACHINERY ENGINEERING CORPORATION (China Company Registration No.: 91110000100000710J)

CHINA MACHINERY & EQUIPMENT (HK) CO. LTD (Hong Kong Company Registration No.: 128454)

CHINA MACHINERY INTERNATIONAL ENGINEERING DESIGN & RESEARCH INSTITUTE CO. LTD (China Company Registration No.: 914300004448853216)

MATTAN ENGINEERING SDN BHD [Company No.: 201201034320 (1018808-U)] ... PLAINTIFFS

IDIWAN SOLAR SDN BHD [Company No.: 201801003291(1265304-H)]

STANDARD CHARTERED BANK MALAYSIA BERHAD [Company No.: 198401003274 (115793-P)] ... DEFENDANTS (HEARD TOGETHER WITH) IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR, MALAYSIA ORIGINATING SUMMONS NO.: WA-24C-2-01/2024

CHINA MACHINERY ENGINEERING CORPORATION (China Company Registration No.: 91110000100000710J)

CHINA MACHINERY & EQUIPMENT (HK) CO. LTD (Hong Kong Company Registration No.: 128454)

CHINA MACHINERY INTERNATIONAL ENGINEERING DESIGN & RESEARCH INSTITUTE CO. LTD (China Company Registration No.: 914300004448853216)

MATTAN ENGINEERING SDN BHD [Company No.: 201201034320 (1018808-U)] ... PLAINTIFFS

BGMC BRAS POWER SDN BHD [Company No.: 201801000731 (1262744-T)]

STANDARD CHARTERED BANK MALAYSIA BERHAD [Company No.: 198401003274 (115793-P)] ... DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] These suits involve the applications by the Plaintiffs pursuant to s 11 of the Arbitration Act 2005 [Act 646] (‘AA 2005’), ss 41 and 50 of the Specific Relief Act 1950 [Act 137] and Order 29 of the Rules of Court 2012 for an injunction to restrain, essentially, the 1st Defendant (‘D1’) in both suits, namely –

Idiwan Solar Sdn Bhd (‘Idiwan’) in Originating Summons No. WA-24C-1-01/2024 (‘O.S. No. 1’) from, among others, receiving the proceeds of any payment made under Bank Guarantee (‘BG’) No. 300021311944-FP dated 21.1.2020 in the sum of RM34,193,091.60; and

BGMC Bras Power Sdn Bhd (‘BGMC’) in Originating Summons No. WA-24C-2-01/2024 (‘O.S. No. 2’) from, among others, receiving the proceeds of any payment made under BG No. 300021311935-FP dated 21.1.2020 in the sum of RM32,077,946.601 until the final disposal of the disputes between the Plaintiffs and D1 in both suits in connection with the Engineering, Procurement, Construction and Commissioning Contract dated 31.5.2019 (‘EPCC Contract’) by way of arbitration or litigation, or any other period as the Court deems fit and proper. [2] The BGs as aforementioned were issued by the same 2nd Defendant (‘D2’) in both suits. The Plaintiffs also sought an injunction to similarly restrain, principally, D2 from releasing any sum demanded by D1 in both suits under the BGs until the final disposal of the disputes between the Plaintiffs and D1 in both suits. [3] The Plaintiffs had additionally filed ex-parte applications for an interim injunction until the final disposal of O.S. No. 1 and O.S. No. 2 pursuant to the same statutory provisions (encl. 6 in both suits). On the first date of hearing on 5.1.2024, the learned counsels representing all parties in both suits had appeared as the Plaintiffs had served the cause papers on the Defendants on 4.1.2024. Mr. HL Wong who appeared for the Plaintiffs took the position that the applications in encl. 6 in both suits would then be heard on an inter parte basis. [4] At the same time, Mr. HL Wong applied for an Ad Interim Injunction to restrain payment under the BGs pending the final disposal of the O.S. in encl. 1 and encl. 6 in both suits. D2 took a neutral stand in the proceedings and would accept whatever decision made by the Court. After hearing brief submissions by the learned counsels for the Plaintiffs and D1 in both suits, I allowed the Plaintiffs’ application for an Ad Interim Injunction. [5] On the same date, the parties also agreed for encls. 1 and 6 in both O.S. to be heard together. [6] After having considered the affidavit evidence and the submissions by the Plaintiffs and D1, I had, on 11.10.2024, dismissed the Plaintiffs’ applications in encls. 1 and 6 in both suits. [7] Dissatisfied, the Plaintiffs have filed their Notices of Appeal against my decision in O.S. No. 1 and O.S. No. 2. These are my full grounds of judgment. The Cause Papers & Written Submissions [8] The cause papers for each application are as follows:

the O.S. dated 3.1.2024 (encl. 1);

the Plaintiffs’ Affidavit in Support (‘AIS’) affirmed by its Deputy Executive Project Director of China Machinery Engineering Corporation, Xie Xi on 3.1.2024 (encls. 2 - 5);

the Plaintiffs’ Notice of Application for Ex-Parte Interim Injunction dated 3.1.2024 (encl. 6);

the Plaintiffs’ Notice of Intention to Use Affidavit dated 3.1.2024 (encl. 7);

D2’s Affidavit in Reply (‘AIR’) affirmed by its Head Trade Product Operation, Hasniyati Binti Hashim on 19.1.2024 (encl. 16);

D1’s AIR affirmed by its Director, Lim Beng Guan on 22.1.2024 (encls. 17 - 26);

the Plaintiffs’ AIR affirmed by the same deponent on 7.2.2024 (encl. 27);

the Plaintiffs’ Supplementary Affidavit affirmed by the same deponent on 21.2.2024 (encl. 30);

D1’s AIR (2) affirmed by the same deponent on 1.3.2024 (encl. 31);

the Plaintiffs’ AIR No. 2 affirmed by the same deponent on 22.3.2024 (encl. 32); and

the Plaintiffs’ Supplementary Affidavit (No. 2) affirmed by the same deponent on 25.4.2024 (encl. 34).

the O.S. dated 3.1.2024 (encl. 1);

the Plaintiffs’ AIS affirmed by the same deponent on 3.1.2024 (encls. 2 - 5);

the Plaintiffs’ Notice of Application for Ex-Parte Interim Injunction dated 3.1.2024 (encl. 6);

the Plaintiffs’ Notice of Intention to Use Affidavit dated 12.1.2024 (encl. 14);

D2’s AIR affirmed by the same deponent on 19.1.2024 (encl. 16);

D1’s AIR affirmed by the same deponent on 22.1.2024 (encls. - 24);

the Plaintiffs’ AIR affirmed by the same deponent on 7.2.2024 (encl. 25);

the Plaintiffs’ Supplementary Affidavit affirmed by the same deponent on 21.2.2024 (encl. 28);

D1’s AIR (2) affirmed by the same deponent on 1.3.2024 (encl. 29);

the Plaintiffs’ AIR No. 2 affirmed by the same deponent on 22.3.2024 (encl. 30); and

the Plaintiffs’ Supplementary Affidavit (No. 2) affirmed by the same deponent on 25.4.2024 (encl. 33). [9] Apart from the affidavits, the Plaintiffs and D1 in both suits had filed Common Core Bundles and extensive and comprehensive submissions in the usual form of the main and reply written submissions as well as Presentation Slides, Speaking Notes, Flow Charts, Table on the Extension of Time (‘EoT’) and Joint Scott Schedules. It is not possible for me to allude to every point of argument in these detailed submissions. Suffice for me to say that I have considered the contents of these submissions before making any conclusive findings on the issues which are sufficient for the disposal of these suits. Salient Background Facts [10] In addition to the thorough submissions as mentioned above, D1 in both suits had prepared detailed Chronology of Events for O.S. No. 1 (encl. 57) and O.S. No. 2 (encl. 55). [11] The background facts for O.S. No. 1 and O.S. No. 2 are largely similar. The salient facts in respect of O.S. No. 1 are set out below with references being made to the relevant facts for purposes of O.S. No.

[12] The 1st Plaintiff is a company incorporated in China and having its registered office at No.178, Guang’anmenwai Street, Xicheng District, Beijing, 100055, China. [13] The 2nd Plaintiff is a company incorporated in Hong Kong and a wholly owned subsidiary of the 1st Plaintiff. It has a registered office at Room 804, Tower 1, South Seas Centre, T.S.T. East, Kowloon, Hong Kong. [14] The 3rd Plaintiff is also a company incorporated in China with a principal office at No. 18, Mid. Shaoshan Rd., Changsha, Hunan, China. [15] The 4th Plaintiff is a company incorporated under the laws of Malaysia and having its registered office at A-16-2, Menara UOA Bangsar, No. 5, Jalan Bangsar Utama 1, 59000 Kuala Lumpur, Malaysia. The business address is at D-7-13A, Capital 4, Oasis Square Ara Damansara, Jalan PJU 1A/7A, 47301 Petaling Jaya, Selangor. [16] All the Plaintiffs are members of an unincorporated consortium in Malaysia. [17] Idiwan is a private limited company incorporated under the laws of Malaysia and having its registered address at No. 18-3, Jalan PJU 8/5C, Damansara Perdana, 47820 Petaling Jaya, Selangor, Malaysia. Its business address is at B-04-01, 1st Floor, Garden Shoppe One City, Jalan USJ 25/1A, 47650 Subang Jaya, Selangor. [18] BGMC is similarly a private limited company incorporated with a registered address at No. 18-3, Jalan PJU 8/5C, Damansara Perdana, 47820 Petaling Jaya, Selangor and a business address at A-3A-02, Block A, Level 3A, Sky Park One City, Jalan USJ 25/1, 47650 Subang Jaya, Selangor. [19] D2 is a bank in Malaysia. Its registered and business address is at Level 25, Equatorial Plaza, Jalan Sultan Ismail, 50250 Kuala Lumpur. It is a nominal Defendant in these proceedings. In its AIR, D2 averred that it will comply with any Order made by the Court. [20] On 27.3.2018, Idiwan entered into a Power Purchase Agreement (‘PPA’) with Tenaga Nasional Berhad (‘TNB’) where Idiwan was responsible for designing, constructing, owning, operating and maintaining a solar photovoltaic energy generating facility with a capacity of 30MWac (‘Facility’) located at Machang, Kelantan (‘Machang Project’). On the same date, BGMC entered into a similar PPA with TNB for the Facility located at Kuala Muda, Kedah (‘Kuala Muda Project’). [21] Idiwan and BGMC were set up as special purpose vehicles (‘SPV’) on 22.1.2018 and 5.1.2018, respectively. They were awarded the Machang Project and the Kuala Muda Project, respectively, by the Energy Commission of Malaysia. [22] Idiwan and BGMC will, among others, deliver and sell to TNB the solar photovoltaic energy to be generated from the Machang Project and the Kuala Muda Project, respectively, for a period of 21 years from the commercial operation date, subject to TNB paying energy payments to Idiwan and BGMC in accordance with the terms and conditions under the PPA. [23] On 31.5.2019, Idiwan and the Plaintiffs, and BGMC and the Plaintiffs, entered into the EPCC Contract, in relation to the PPA. The Plaintiffs were appointed as the turnkey contractors for the design, engineering, procurement, site preparation and clearing, civil works, manufacturing, construction, construction management, installation, erection, start-up, training, testing and commissioning, labour, services, transportation, facilities, equipment, supplies, machinery, tools, construction fuels, chemicals and utilities, materials, administration and other services and items required to complete the Machang Project and the Kuala Muda Project (‘Works’). [24] The Plaintiffs’ obligations pursuant to the EPCC Contracts include, among others, the following:

to complete the Works within 14 months from the Commencement Date as stated in the Notice to Proceed (‘Time for Completion’); and

within the Time for Completion, the Plaintiffs shall achieve, among others, –

the Commercial Operation Date (‘COD’);

(ii) the passing of all tests as per the EPCC Contract in relation to all elements of the Works so as to cause the Works to achieve the Facility Provisional Acceptance Date (‘FPA’);

(iii) issuance of the Facility Provisional Acceptance Certificate (‘PAC’) subject to all requirements under the EPCC Contract; and

(iv) the Plaintiffs shall deliver to D1 an unconditional and on-demand BG representing 20% of the Contract Price, which shall be effective from the date of the Notice to Proceed and remain valid until the issuance of the PAC. [25] Prior to the issuance of the Notice to Proceed, on 3.6.2019 and 12.6.2019, Idiwan and BGMC respectively issued a Limited Notice to Proceed to the Plaintiffs. [26] The Notices to Proceed were issued by Idiwan and BGMC to the Plaintiffs on 15.7.2019, which is the Commencement Date, and the scheduled Time for Completion for the Machang Project and the Kuala Muda Project fell on 14.9.2020. [27] Between March 2020 and June 2020, several Movement Control Orders were implemented by the Government due to the Covid-19 pandemic. The Plaintiffs were required to stop work during this period due to the Force Majeure Event. [28] The Plaintiffs resumed performance of the Works on 29.5.2020 for the Machang Project and, on 28.5.2020 for the Kuala Muda Project. [29] Disputes arose between the Idiwan and the Plaintiffs, and BGMC and the Plaintiffs where, on the one hand, Idiwan and BGMC claimed that the Machang Project and the Kuala Muda Project suffered significant delay due to, among others, the Plaintiffs’ cash flow issues and their delay in paying their sub-contractors. On the other hand, the Plaintiffs were unhappy over the assessment of their applications for EoT by Idiwan and BGMC and the non-payment of their claims for VO and loss and expenses in respect of the EoT. [30] The details as to the Plaintiffs’ applications for EoT are as tabulated below: O.S. No. 1: Date EOT/COD EOT claimed Plaintiffs’ Proposed Revised Time for Completion 16.06.2020 EOT No. 1 185 days 18.03.2021 14.09.2020 EOT No. 2 227 days 29.04.2021 28.05.2021 EOT No. 3 311 days 21.07.2021 22.06.2021 EOT No. 4 332 days 11.08.2021 03.12.2021 EOT No. 5 421 days 08.11.2021 O.S. No. 2: Date EOT/COD EOT claimed Total Delay Plaintiffs’ Proposed Revised Time for Completion 16.06.2020 EOT No. 1 165 days 165 days 26.02.2021 14.09.2020 EOT No. 2 196 days 196 days 29.03.2021 28.05.2021 EOT No. 3 304 days 304 days 14.07.2021

22.06.2021 EOT No. 4 357 days 357 days 05.09.2021 10.11.2021 EOT No. 5 480 days 480 days 06.01.2022 [31] Subsequently, Idiwan and the Plaintiffs, and BGMC and the Plaintiffs entered into a Supplemental Agreement on 10.3.2022 for Idiwan and BGMC, respectively, to, among others, make direct payments to the Plaintiffs’ subcontractors and advance payments to the Plaintiffs by revising the payment milestones. [32] On 13.12.2022, the Plaintiffs demanded the alleged outstanding payment for VO in the sum of RM10,440,887.05 and prolongation costs of RM10,301,831.00 from Idiwan. As against BGMC, the Plaintiffs had submitted the first VO claim on 28.5.2021 and eventually their solicitors issued a letter of demand on 1.12.2022 for VO in the sum of RM2,099,486.02 and prolongation costs of RM8,450,962.02. [33] The Machang Project ultimately achieved the COD on 5.4.2023 and, on 22.3.2022 for the Kuala Muda Project. However, amongst Idiwan’s and BGMC’s grouses were that the Works did not achieve the FPA by the COD or even by the Time for Completion. [34] In respect of the Machang Project –

on 21.7.2023, the Plaintiffs re-submitted their Interim Payment Claim No. 29 (‘IPC 29’) and submitted Interim Payment Claim 30 (‘IPC 30’). Idiwan took the position that the Plaintiffs are not entitled to IPC 29 and IPC 30;

Idiwan made a final determination on the Plaintiffs’ application for EoT No. 5 and granted a total of 116 days of EoT with the revised

Idiwan alleged that there was a total delay of 818 days and pursuant to Clause 8.8(a) of the EPCC Contract, the Plaintiffs are liable to pay damages amounting to RM25,644,818.70 (‘Delay Damages’) to Idiwan for the delay. [35] In respect of the Kuala Muda Project, BGMC alleged that there was a total delay of 555 days from the scheduled Time for Completion of 14.9.2020. [36] Further, following the achievement of the COD and for the purpose of issuance of the PAC, the Plaintiffs are required to, among others, conduct various tests including the Performance Ratio Tests (‘PR Test’) to determine the Actual Performance Ratio (‘Actual PR’) of the Machang Project and Kuala Muda Project. However, as at the date of filing of the written submissions, the Plaintiffs have not carried out the PR Test, which is one of the prerequisite conditions to achieve the FPA. [37] Idiwan proceeded with the PR Test pursuant to Clause 10.7(c) of the EPCC Contract and recorded the Actual PR at 74.05%, which is 4.95% lesser than the Guaranteed Performance Ratio of 79% (‘Guaranteed PR’). [38] Pursuant to Clause 10.6(g) of the EPCC Contract, Idiwan claimed that the Plaintiffs are liable to pay damages in the sum of RM16,925,580.34 Performance Liquidated Damages (‘Performance LD’) for the failure in achieving the Guaranteed PR. Accordingly, on 14.9.2023, Idiwan issued two invoices to the Plaintiffs in respect of the Delay Damages and the Performance LD. [39] Meanwhile, several issues arose as regards the PR test for the Kuala Muda Project. BGMC proceeded with the PR Test pursuant to Clause 10.7(c) of the EPCC Contract from 14.9.2022 to 20.9.2022. The Plaintiffs protested against running the plant on V-mode for the PR Test. Later, on 29.12.2022, the Plaintiffs proposed that they would be conducting a PR Test and the schedule for the test was provided to BGMC. [40] BGMC had engaged Afrima Consulting Engineer Sdn Bhd to act as the Owner’s Engineer (‘OE’) for the Kuala Muda Project. On 13.1.2023, the OE informed the Plaintiffs of the final decision on the methodology for the PR Test and that the seven days results from 3.2.2023 to 10.2.2023 will be recorded as the official and final results. The same was not carried out. [41] The Plaintiffs and BGMC continued to be in dispute over the PR Test as evidenced by the correspondences between them and the meetings which were held to discuss the problem. Three meetings were held i.e. on 21.6.2023, 17.8.2023 and 5.9.2023. To BGMC, the third meeting is crucial because at that meeting –

BGMC presented on its determination and reasons for EoT No. 5, the VO claim and the PR Test. BGMC also presented a summary of the PR assessment by both parties and maintained that the Plaintiffs’ PR Test results are not in accordance with, among others, the EPCC Contract;

the Plaintiffs informed that they intend to submit another EoT application to specifically cover the period until the COD; and

BGMC stated that the Plaintiffs’ request for both parties’ consultants to meet will be decided after further discussion with BGMC’s higher management. On 14.11.2023, the Plaintiffs issued EoT No. 6 with a covering letter dated 10.11.2023. EoT No. 6 was stated to be a Delay Analysis as of July 2023 and the EoT applied for is 555 days. [42] For the Machang Project, the Plaintiffs also revised their EoT application and claimed 959 days for EoT No. 6 so that the Time for Completion would be revised to 30.4.2023. The Plaintiffs additionally revised their VO claim to RM10,440,887.05 and claim for loss and expense to RM15,698,028.19. [43] The Plaintiffs issued a Notice of Dispute to Idiwan and BGMC on 22.11.2023 and requested for a good-faith negotiation between parties. [44] The good faith meeting was held on 18.12.2023 but there was no resolution of the disputes between the Plaintiffs and Idiwan, and the Plaintiffs and BGMC. [45] On 29.12.2023, Idiwan and BGMC made a demand on the respective BGs. [46] On 24.4.2024, Idiwan, now known as Re Machang Sdn Bhd, and BGMC each issued a Notice of Termination to the Plaintiffs pursuant to Clause 16.2 of the EPCC Contract. In the Notice by Re Machang Sdn Bhd, reference was made to Idiwan’s letter and invoice dated 14.9.2023 for Delay Damages and – “ …

WE SHALL FORTHWITH ON RECEIPT OF THE CLIENT’S WRITTEN DEMAND MADE FROM TIME TO TIME NOTWITHSTANDING ANY CONTEST OR PROTEST BY THE CONTRACTOR OR BY OURSELVES OR BY ANY OTHER THIRD PARTY AND WITHOUT PROOF OR CONDITIONS, PAY TO THE CLIENT WITHIN SEVEN (7) CALENDAR DAYS IN FULL ANY SUM OR SUMS IN AGGREGATE NOT EXCEEDING RM34,193,091.60 … WHICH IS THE SUM EQUIVALENT TO TWENTY PERCENT … OF THE TOTAL CONTRACT PRICE AS PROVIDED IN

…

THIS PERFORMANCE BOND SHALL BE EFFECTIVE ON THE DATE OF ITS ISSUANCE AND SHALL BE AND SHALL BE NULL AND VOID ON THE EARLIEST OF I) SEP. 30, 2020, OR II) THE ISSUANCE OF THE FACILITY PROVISIONAL ACCEPTANCE CERTIFICATE (‘VALIDITY PERIOD’) AND THE LIABILITIES OF THE GUARANTOR SHALL BE DEEMED TO BE COMPLETELY ABSOLVED THEREAFTER, NO MATTER THE ORIGINAL IS RETURNED TO THE GUARANTOR OR NOT. THIS PERFORMANCE BOND SHALL BE EXTENDED UP TO 10TH APRIL, 2021 (INCLUSIVE OF CLAIM PERIOD, IF ANY) AT THE WRITTEN REQUEST OF THE BENEFICIARY RECEIVED BY THE GUARANTOR AT THE ADDRESS STATED IN CLAUSE 2 ONE (1) MONTH BEFORE THE

OUR OBLIGATIONS UNDER THIS PERFORMANCE BOND SHALL BE IRREVOCABLE, AND ARE GIVEN AS A SEPARATE OBLIGATION ENFORCEABLE AGAINST THE

WE UNDERTAKE THAT OUR LIABILITY UNDER THIS PERFORMANCE BOND SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL NOT BE AFFECTED, IMPAIRED, REDUCED, DISCHARGED OR OTHERWISE AFFECTED IN ANY WAY BY REASON OF ANY OF THE FOLLOWING, AND WE HEREBY WAIVE NOTICE OF: …

(G) ANY UNENFORCEABILITY, INVALIDITY, ILLEGALITY OR FRUSTRATION OF ANY OBLIGATION OF THE CONTRACTOR OR ANY OTHER PERSON UNDER THE CONTRACT OR ANY OTHER DOCUMENT OR SECURITY, …

ANY PAYMENT MADE HEREUNDER SHALL BE MADE IN FULL TO THE CLIENT WITHOUT SET-OFF OR COUNTERCLAIM AND FREE AND CLEAR OF, AND WITHOUT DEDUCTION FOR OR ON ACCOUNT OF, ANY LIABILITY WHATSOEVER INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE TAXES, DUTIES, CHARGES, FEES, DEDUCTIONS OR WITHHOLDINGS OF ANY NATURE WHAATSOEVER AND BY WHOMSOEVER

THIS PERFORMANCE BOND SHALL BE SUBJECT TO THE UNIFORM RULES FOR DEMAND GUARANTEE (URDG) 2010 REVISION, ICC PUBLICATION NO. 758.”. [50] With reference to paragraph 8 of the PB as above quoted, Article 5(a) of the URDG 2010, ICC Publication No. 758 reads as follows: “A guarantee is by its nature independent of the underlying relationship and the application, and the guarantor is in no way concerned with or bound by such relationship. A reference in the guarantee to the underlying relationship for the purpose of identifying it does not change the independent nature of the guarantee. The undertaking of a guarantor to pay under the guarantee is not subject to claims or defences arising from any relationship other than a relationship between the guarantor and the beneficiary.”. [51] Based on the above, the PBs are clearly unconditional and on-demand PBs and Idiwan and BGMC are entitled to call on the respective PB by written demand and to be paid in full notwithstanding any contest or protest by the Plaintiffs or any of them. [52] On 29.12.2023, Idiwan and BGMC made a demand on the PBs to D2 on the ground to satisfy the payment of the Delay Damages and the Performance LD. In respect of the Kuala Kedah Project, BGMC claimed that the sum of RM24,058,459.95 is due as Delay Damages and RM17,850,094.17 as Performance LD. [53] D2 informed the Plaintiffs about the demand on the PB on 2.1.2024. [54] On 14.2.2024, the Plaintiffs issued a Notice of Arbitration to refer the disputes between the Plaintiffs and Idiwan under the EPCC Contract to arbitration. [55] The BGs were extended and expired on 29.2.2024. Before the expiry date of the BGs, the Plaintiffs had made an application to D2 to extend the BGs until the end of 2025. The application was rejected as D2 is of the view that the extension of the BGs is unnecessary, among others because Idiwan and BGMC had made the demands prior to their expiry dates and the funds are readily accessible for payment upon the disposal of the applications herein or the arbitration proceedings. The Alleged Unconscionable Conduct [56] The Plaintiffs averred that Idiwan’s conduct in calling the PB is unconscionable for the following reasons:

there is no basis for Idiwan to impose the Delay Damages and the Performance LD. This is because –

the Facility has achieved the COD on 5.4.2023 and Idiwan had taken over possession of the Facility and operated and maintained the same. Idiwan has consistently generated revenue from TNB through the provision and supply of electricity/ solar energy from the Facility. After nearly eight months of full operation of the Facility, Idiwan called on the PB;

(ii) the imposition of the Delay Damages is wrongful and disputed as Idiwan failed to assess the EoT claims properly or under-assessed them; and

(iii) the imposition of the Performance LD is wrongful and disputed due to, among others, Idiwan’s usage of improper PR Test result;

Idiwan refused to disclose its alleged EoT Independent Assessment Report and the PR Test Report, which formed the basis of its imposition of the Delay Damages and Performance LD, to the Plaintiffs. Hence, the Plaintiffs are unaware of the basis of Idiwan’s assessment of their claims for EoT and imposition of the Performance LD. The Plaintiffs had no opportunity to efficiently rebut such assessment and imposition before Idiwan made a demand on the PB;

Idiwan has no right to call on the PB for the disputed Delay Damages and Performance LD, so long as the Plaintiffs maintained the PB. This is envisaged under Clause 10.9(b)(v) of the EPCC Contract as follows: “10.9 Provisional Acceptance of the Facility …

Provisional Acceptance in respect of the Facility for the purpose of this Contract means the time and date of issuance by the Client of the Facility Provisional Acceptance Certificate (the “Facility Provisional Acceptance Date”), evidence that the following conditions have been met: …

the Contractor has paid the Client all undisputed Delay Damages and Performance Liquidated Damages in full, provided that, to the extent that any portion of such liquidated damages are disputed, the Contractor shall provide and maintain a direct, irrevocable bank guarantee in favour of the Client issued by a first class commercial bank in Malaysia and in such form as is satisfactory to the Client and Lenders, in the aggregate principal amount of the disputed portion of such liquidated damages (if the Client and the Contractor agree that the Contractor is not liable for such disputed portion, the Client shall pay the Contractor any reasonable bank guarantee charge incurred by the Contractor, but such charge shall otherwise be the responsibility of the Contractor). …”.

Idiwan did not suffer any actual damages. Idiwan did not disclose any evidence of damages and whether TNB has imposed any penalty on it and the extent of the EoT granted by TNB to it;

Idiwan has breached its duties and obligations under the EPCC Contract by, among others, –

failing or refusing to issue or wrongfully withholding the

(ii) failing or refusing to timeously make payment of the certified Interim Payments in accordance with the contractual timeline for payment;

(iii) failing to fairly or properly assess the Plaintiffs’ claims for EoT of 959 days until 30.4.2023;

(iv) wrongfully or unlawfully imposing Delay Damages and Performance LD on the Plaintiffs; and

wrongfully or unlawfully calling on the PB;

just before Idiwan made the demand, on 14.11.2023, without the knowledge and consent of the Plaintiffs, Idiwan and OCBC entered into a Deed of Receipt and Reassignment to reassign the BG back to Idiwan. In such circumstances, Idiwan is able to make a demand on the BG without the Plaintiffs’ knowledge and to catch the Plaintiffs by surprise. At the material time, the parties were still in the midst of discussions and resolving the issues regarding the Delay Damages, Performance LD and issuance of the PAC. There is no term in the EPCC Contract which allows Idiwan to re-assign the BG without the Plaintiffs’ consent;

from Idiwan’s e-mail dated 7.11.2023, Idiwan has no interest in resolving the disputes. Idiwan merely wishes to demand and receive the money under the PB, without paying the Plaintiffs for work done, variation claims and loss and expenses claims related to delay and to walk away by terminating the EPCC Contract. Idiwan is merely unjustly enriching itself at the expense of the Plaintiffs; and

it is unconscionable for Idiwan to call on the PB until the disputes have been resolved pursuant to Clause 21.2 of the EPCC Contract on “Dispute Resolution”. [57] Idiwan refuted the allegation that the call on the PB is unconscionable as it took the position that none of the Plaintiffs’ allegations satisfy the threshold of a seriously arguable case that the only realistic inference is the existence of unconscionability. The cases of Ranhill E&C Sdn Bhd v Thyssenkrupp Indusries (M) Sdn Bhd & Anor [2016] 9 MLJ 703, ETEC E & C (M) Sdn Bhd v Dindings Poultry Processing Sdn Bhd [2021] MLJU 305 (decision of this Court which was affirmed by the Court of Appeal on 15.2.2022) and Kharisma Wira Sdn Bhd v Ketua Setiausaha Kementerian Pertahanan Malaysia & Ors [2023] MLJU 1250 were cited to support its stance. [58] Idiwan further contended that, as acknowledged by the Plaintiffs and evidenced in the Notice of Arbitration, the Plaintiffs’ allegations are contractual disputes which should be ventilated at arbitration and do not amount to unconscionability. [59] The Plaintiff’s reasons for claiming that the call on the PB for the Kuala Kedah Project is unconscionable is the same as in paragraph 56 above, except that the Facility has achieved the COD on 22.3.2022 and hence, BGMC call on the PB was made two years after the Facility was fully operational. The other differences relate to the number of days for the Plaintiffs’ EoT, references to the relevant IPC and the amounts involved as well as the amounts of the VO and loss and expense claims. [60] The grounds on which BGMC asserted that there is no unconscionable conduct in making the call on the PB for the Machang Project are also the same as Idiwan’s. The Legal Principles [61] Paragraphs 11(1)(a) and (b) AA 2005 stipulate that: “Arbitration agreement and interim measures by High

11.

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 –

maintain or restore the status quo pending the determination of the dispute;

take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process; …”. [62] Section 11 of the AA 2005 is relevant in the determination of whether the interim measure of restraining the call on the PB pending arbitration should be granted to the Plaintiffs (see KNM Process Systems Sdn Bhd v Ceca Gold Company Ltd & Ors [2023] 1 MLJ 824). [63] In Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Co Sdn Bhd [2012] 3 CLJ 401, the Federal Court held that unconscionability or unconscionable conduct is recognised as a separate and distinct ground to allow for a restraining order on the beneficiary (see too, Kejuruteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 and Focal Asia Sdn Bhd & Anor v Raja Noraini Raja Datuk Nong Chik & Anor [2009] 1 LNS 913). The Court also laid down the threshold to be applied where one party to the underlying contract is attempting to use unconscionability to restrain the other from exercising his contractual rights. [64] Applying the doctrine of stare decisis, this Court has strictly applied the test on unconscionability in its decisions, the recent one being JSNT2 Sdn Bhd v Exyte Malaysia Sdn Bhd & Ors [2024] MLJU 438 (affirmed by the Court of Appeal on 29.4.2024), where this Court said: “[32] Both learned counsels representing the parties cited the same seminal case authority on unconscionability as a separate and distinct ground from fraud to restrain a beneficiary from making a call on a performance bond, namely Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Co Sdn Bhd [2012] 4 MLJ 1 (FC). In that case, Abdull Hamid Embong FCJ in delivering the judgment of the Court laid down the legal principles which may be summarised as follows:

the principle underlying the unconscionability doctrine is the prevention of oppression and unfair conduct;

the determination of unconscionability is fact specific and the courts must consider such a claim on a case by case basis and assess the totality of the circumstances;

clear, manifest or strong evidence of some degree in respect of the alleged unconscionable conduct complained of, and not merely a bare assertion, must be shown before the court can intervene to prevent a beneficiary of a performance bond from making a call on the same; and

the threshold that must be satisfied is that “of a seriously arguable case that the only realistic inference is the existence of unconscionability” or a strong prima facie case. The events or conduct must be of such degree such as to prick the conscience of a reasonable and sensible man. [33] These legal principles have been consistently applied by this Court in several cases, the latest being Eversendai Constructions (supra) which was affirmed by the Court of Appeal on 24.10.2023 [see too, Kejuteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 (CA), KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLC [2020] 3 MLRA 9 (CA), BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] 3 SLR 352 (Singapore Court of Appeal) and paragraph 60 in the case of Panzana Enterprise (supra)]. [34] In KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLC (supra), the Court held, among others, that s 11 AA 2005 confers discretion upon the court to grant any interim measure and the exercise of discretionary power under this provision requires a careful examination of the relevant material facts against the allegations made, with a cautious restrain of determining the dispute in any definitive manner since that is a matter for determination at the arbitration and not for the court. It was further held that: “[51] How unconscionability or fraud is established thus depends on the facts and that would call into question the underlying contractual arrangements between the parties. That crucial document and its terms must be examined. … [52] Although Sumatec and the cases discussed thus far do not concern calls and injunctive reliefs in the context of interim measures pending arbitration invoked under s 11 of the Arbitration Act 2005, we are of the view that the principles apply with equal force but with the caveat that the court must now weigh into consideration the question of whether status quo pending arbitration ought to be maintained or restored; whether some current or imminent harm to the arbitral process needs to be prevented; or any other similar considerations as found in s 11(1)(a) to

(e). In fact, as seen from the decisions of Metrod (Singapore) Pte Ltd (supra); Jiwa Harmoni Offshore Sdn Bhd v. Ishi Power Sdn Bhd (supra); Cobrain Holdings Sdn Bhd v. GDP Special Projects Sdn Bhd (supra) and Obnet Sdn Bhd v. Telekom Malaysia Berhad (supra) the courts have already taken that approach that the grant of the particular interim measure must be in aid or support of or to facilitate the arbitration.”. (see too, paragraphs 31 and 32 in KNM Process Systems Sdn Bhd v. Cypark Sdn Bhd [2020] 10 MLJ 321 (HC) at pp 341 - 345 on the interpretation and application of sub-s 11(1) AA 2005 and the test and elements to be fulfilled for the court to exercise its discretion to grant the injunctive relief sought).”. [65] The Plaintiffs submitted several case authorities where the Court had granted injunctions to restrain the call on a performance bond, namely, Humboldt Wedag GMBH & Anor v Perak-Hanjoong Simen Sdn Bhd [2015] 4 CLJ 774, Dunggon Jaya Sdn Bhd v Aeropod Sdn Bhd and Another [2019] 4 MLJ 466, Target Resources Sdn Bhd v THP Bina Sdn Bhd [2019] 6 MLJ 116 and China Construction Yangtze River (Malaysia) Sdn Bhd v Cosmopolitan Homes (Sg Pinang) Sdn Bhd & Anor [2023] MLJU 1466. It was argued that the facts in Humboldt Wedag GMBH and China Construction Yangtze River are similar to the instant case. [66] However, as repeatedly reminded by the appellate courts, the determination as to whether unconscionability is established is fact sensitive; depending very much on the facts, conduct of the parties, contractual terms and other documentary evidence and totality of the circumstances in each case. The learned counsel appearing for D1 in both suits have taken pains to tabulate the distinguishing features in the facts of the cases relied upon by the Plaintiffs with the facts in the present suits [see APPENDIX C in Idiwan’s Submissions In Reply (encl. 46) and APPENDIX D in BGMC’s Submissions In Reply (encl. 41)]. [67] In so far as the cases of Humboldt Wedag GMBH and China Construction Yangtze River are concerned, the learned counsel is not wrong in submitting that, in the present suits, even though the Facility achieved the COD, the PR Test which is a requirement under Clause 10.6 of the EPCC Contract on “Tests on Completion – Performance Ratio Tests” was not conducted by the Plaintiffs. As a result, there is no FPA and the PAC has not been issued. The Issues [68] The Plaintiffs’ applications in encls. 1 and 6 involved the same issues for O.S. No. 1 and O.S. No. 2 as listed below, except for the differences as indicated: 1st Issue: Whether the demand on the BG No. 300021311944-FP by D1 on 29.12.2023 was unjustified and/ or unconscionable (for O.S. No. 2, the BG No. is 30002131194435-FP) 2nd Issue: Whether D1’s issuance of the Notice of Termination dated 24.4.2024 to terminate the EPCC Contract is wrongful and unconscionable 3rd Issue: Whether the disputes in the present case involve pure contractual disputes 4th Issue: Whether the Plaintiffs have completed the Works under the EPCC Contract and handed over the Facility to D1 5th Issue: Whether D1 should have issued PAC 6th Issue: Whether the delay in the Project was caused by the Plaintiffs 7th Issue: Whether the Plaintiffs are entitled to any EoT for the Works until the COD, beyond the 116 days of EoT granted by D1 (for O.S. No. 2, the number of days of EoT is 107) 8th Issue: Whether the time for completion under the EPCC Contract has been set at large 9th Issue: Whether D1 is entitled to impose the Delay Damages of RM25,644,818.70 against the Plaintiffs (for O.S. No. 2, the Delay Damages is RM24,058,459.95) 10th Issue: Whether D1 is entitled to impose the Performance LD of RM16,925,580.34 against the Plaintiffs (for O.S. No. 2, the Performance LD is RM17,850,094.17) 11th Issue: Whether D1 is liable to make payment to the Plaintiffs for the variation works and/ or additional works of RM10,440,887.05 and loss and expense claims related to delay of RM15,698,028.19 (for O.S. No. 2, the sum for variation works is RM2,099,486.02 and for loss and expense claims is RM8,450,962.02) 12th Issue: Whether D1 is entitled to withhold the payment of RM14,694,953.72 due to the Plaintiffs (as of Interim Payment Nos. 29 and 30) under the EPCC Contract (for O.S. No. 2, the sum withheld is RM16,641,239.14) 13th Issue: Whether there are serious issues to be tried and whether the balance of convenience lies in favour of granting the injunction 14th Issue: Whether damages is an adequate remedy if injunction is not granted 15th Issue: Whether the Plaintiffs have come to the Court with clean hands [69] At the hearing, the learned counsel for the Plaintiffs conceded that the 11th Issue and 12th Issue are appropriately to be ventilated in the arbitration proceedings. Therefore, there is no necessity for this Court to decide on these two Issues. [70] For reasons which shall ensue, in my considered view, the suits before this Court can be decided based on the 1st Issue and 3rd Issue only as the 2nd Issue and the 4th Issue to the 10th Issue clearly involve contractual disputes which are matters to be resolved in the arbitration proceedings between the Plaintiffs and Idiwan and the Plaintiffs and BGMC. [71] The learned counsels had submitted on the 13th Issue and the 14th Issue as though they are relevant considerations in determining whether the discretion of the court should be exercised in favour of making the order for an injunction or otherwise. In paragraph 51 of the judgment in JSNT2 (supra), reference was made to Petrodar Operating Co Ltd v. Nam Fatt Corporation Bhd & Anor [2012] 8 CLJ 311 (CA) and affirmed by the Federal Court in [2014] 1 CLJ 18, East Coast Economic Region Development Council v Inai Kiara Sdn Bhd & Anor and another appeal [2019] MLJU 1251 (CA) and the previous decisions of this Court in BGMC Corporation Sdn Bhd v MRCB Builders Sdn Bhd & Ors [2022] MLJU 2458 and Eversendai Constructions (M) Sdn Bhd v Samsung C&T Corporation UEM Construction JV Sdn Bhd [2023] MLJU 2025 (affirmed by the Court of Appeal on 13.1.2023 and 24.10.2023, respectively) whereby there is judicial precedent for the proposition that, in cases such as the present suits, unconscionability is the sole criterion. The fact that there is a pending arbitration is not, on its own, a reason to halt a demand which has been made on a performance bond. Enquiries on where the balance of convenience lies and whether there are serious issues to be tried and damages will be an adequate remedy are irrelevant in determining whether an injunction should be granted against a beneficiary to stop payment by a bank under a performance bond. [72] In the light of my findings in relation to the 1st Issue and 3rd Issue, I do not think there is a need for me to decide on the 15th Issue as I was not inclined to make a determination of the suits based solely on the 15th Issue as implored by D1 in both suits. 1st Issue: Whether the demand on the BG No. 300021311944-FP by D1 on 29.12.2023 was unjustified and/ or unconscionable (for O.S. No. 2, the BG No. is 30002131194435-FP) [73] The Plaintiffs’ grounds in support of an affirmative answer for the 1st Issue are as set out in subparagraphs 56(a), (c),(d), (e) and (g) above. [74] In amplification of these grounds, in the Joint Scott Schedule and the Plaintiffs’ Presentation Slide, it was submitted that –

despite the existence of the disputed Delay Damages and Performance LD, the Plainitffs did not seek to terminate the EPCC Contract under Clause 16.2(a)(viii) on “Termination by Client” until 24.4.2024. This one year of delay between the COD of 5.4.2023 and 24.4.2024 in exercising the right to termination demonstrates that D1 was not concerned about the Delay Damages and Performance LD sum. It has, rather, issued the defective Notice of Termination mala fide, and to achieve a collateral objective;

by the defective Notice of Termination, D1 is seeking to abuse the contractual provisions and evade its remaining obligations under the EPCC Contract. This includes, among others, making the final payment, issuing practical acceptance certificates and allowing replacement of the PB with warranty bonds;

the value of the Delay Damages and Performance LD of approximately RM42 million is lower that the value of the PB and the outstanding payment for the Plaintiffs’ original work done for approximately RM48 million and the claims for VO and loss and expenses for more than RM26 million; and

from the Press Statement by reNIKOLA Holdings Sdn Bhd dated 26.4.2023 titled “ReNIKOLA Completes The Subscription Of Redeemable Preference Shares In Two Solar Plants In Northern Region With Aggregate Generating Capacity Of 90 MWdc” and the Free Malaysia Today report on the same date titled “ReNIKOLA Completes RPS Subscription For Machang, Kuala Muda Solar Plants”, Idiwan and its parent company have reaped huge benefits from the completion of the Project since it managed to raise RM390 million from the sukuk exercise in October 2023. [75] I have given due consideration to the Plaintiffs’ contentions; however, I am of the view that the Plaintiffs have not met the threshold “of a seriously arguable case that the only realistic inference is the existence of unconscionability or a strong prima facie case” and the events or conduct must be of such degree such as to prick the conscience of a reasonable and sensible man. My reasons are as follows:

the allegation hurled by the Plaintiffs against Idiwan and BGMC are baseless as, in the main, the actions taken these Defendants are well within their contractual rights. The affidavit evidence shows that, even after EoT were granted, there was delay in achieving the COD for the Machang Project and the Kuala Kedah Project. In respect of the former, even if Idiwan had allowed EoT No. 5 in its entirety i.e. 421 days, there would still be a delay of over 500 days and the Delay Damages which the Plaintiffs may be liable to pay would still reach the Delay LDs Cap of RM25,644,818.70. Moreover, it is also a proven fact that the Plaintiffs did not conduct any PR Test as required by the EPCC Contract. The FPA has not been achieved and the PAC cannot be issued. Again, for the Machang Project, Idiwan had to conduct the PR Test itself and the Actual PR was found to be lower than the Guaranteed PR. Consequently, Idiwan exercised its contractual right to impose the Performance LD. Whether at the end of the day the Plaintiffs have to pay the Delay Damages and the Performance LD is for the Arbitral Tribunal to decide;

issues concerning the Plaintiffs’ entitlement to their claims under the IPCs are, akin to the claims for VO and loss and expense which the Plaintiffs have conceded are for the Arbitral Tribunal to determine, are similarly for the Arbitral Tribunal to decide;

the Plaintiffs’ interpretation of Clause 10.9(b)(v) of the EPCC Contract is flawed. It requires the Plaintiffs to provide and maintain a direct, irrevocable BG in favour of Idiwan, separate from the PB. The separate BG shall be in the aggregate principal amount of the disputed portion of the liquidated damages. It does not prevent Idiwan from making the demand and calling on the

subparagraphs 74(a) and (b) above were not raised in any of the Plaintiffs’ affidavits and are thus submissions from the Bar. In any event, the termination of the EPCC Contract does not relate to events or conduct upon which the Plaintiffs have made the instant applications. Idiwan has terminated the EPCC Contract pursuant to Clause 16.2(a)(viii) of the same on the basis that the Delay LDs Cap is reached following the issuance of, among others, the invoice in respect of the Delay Damages on 14.9.2023. Even if there is any delay by Idiwan in exercising its right of termination, this does not amount to a waiver for it to exercise other rights that it has pursuant to the EPCC Contract. [76] In the course of oral submission, Mr. HL Wong even when to extent of saying that, based on the latest SSM search which shows that Idiwan is now known as Re Machang Sdn Bhd and that the company recorded loss after taxation for the sum of RM3,170,255.00 in the Summary of Financial Information for the financial year end 30.6.2022, any award by the Arbitrator will merely be a paper award. Now, this Court does not, of course, decide cases based on speculations or conjectures. In any event, Ms. Fiona had amply rebutted the Plaintiffs contention by highlighting that appraisal of the financial standing of the company cannot be based on the results of the SSM search alone and the company has assets to meet any future award. Moreover, the Plaintiffs themselves contended that Idiwan has made profits following the COD for the Machang Project. [77] In the premises, the 1st Issue is answered in the negative for O.S. No. 1 and O.S. No. 2. 3rd Issue: Whether the disputes in the present case involve pure contractual disputes [78] The Plaintiffs insisted that the current disputes concern Idiwan’s and BGMC’s unconscionable conduct as a whole in dealing with the contractual matters, in imposing the Delay Damages and Performance LD, in calling the BG and eventually terminating the Plaintiffs to achieve a collateral objective of keeping the money and evading their contractual obligations. [79] Despite the gallant attempt by the Plaintiff’s counsel to convince the Court, after perusing the lengthy submissions by the parties in respect of the 2nd Issue and the 4th Issue to the 10th Issue, the answer to the 3rd Issue is a resounding “Yes”. [80] Although I am of the opinion that the 2nd Issue of whether D1’s issuance of the Notice of Termination dated 24.4.2024 is lawful is a contractual dispute to be ventilated in the arbitration proceedings, as the Issue is also couched in terms of the termination being unconscionable, I shall briefly address the Plaintiffs’ arguments that –

the termination directly conflicts with the Ad-Interim Injunction Order dated 5.4.2024 which aims to maintain the status quo. According to the Plaintiffs, the termination which was premised on payment of the disputed Delay Damages and Performance LD directly contravenes the Ad-Interim Injunction Order. The short answer to this contention is that paragraph 5(G) of the PB clearly states that the PB shall not be affected by any termination of the EPCC Contract. The Ad-Interim Injunction Order prevents payment of the sum under the PB pending the disposal of the present proceedings. It does not in any way prevent the termination of the EPCC Contract by D1 in both suits; and

the demand on the BGs was merely a precursor to Idiwan’s and BGMC’s pre-conceived plan to terminate the EPCC Contract as evident from the e-mail dated 7.11.2023 (‘7.11.2023 E-mail’), which was sent by BGMC’s former Project Director to the 1st Plaintiff’s Deputy General Manager. The 7.11.2023 E-mail starts off by referring to the meeting held on 20.10.2023 and the subsequent developments regarding the resolution of the issues related to the Machang Project and Kuala Muda Project. During the said meeting, the parties are said to have explored solution to enhance the generation capacity of both power plants and the Plaintiffs were asked to provide the target date for completing the project handover, which covers the outstanding works and major defect rectification. However, the proposed solution was not acceptable to BGMC and the Plaintiffs did not revert on the target date for completion of the project handover. Hence, – “… In light of the above-mentioned issues and to expedite the resolution, we believe that it is in the best interest of both parties to consider a global settlement to resolve these issues amicably. We would like to propose a global settlement in which we offer the main contractor RM25 million as a final claim for both contracts. This offer takes into account the various difficulties encountered and aims to expedite the resolution. Furthermore, as part of this global settlement, it is anticipated that RM17 million of the RM25 million will be allocated for the contractor to settle the outstanding amount owed to the subcontractor. This allocation is intended to prevent further complications and disputes related to the subcontractor's outstanding payments. The remaining RM8 million will be made available to the contractor to address other project-related matters. In addition to the proposed global settlement, in line with the contractual stipulations, we would like to inform you of our decision to call on the performance bond for both projects amounting to RM66.271 million on the losses incurred due to the delays and the underperformance of the power plants. Upon both parties discharging both the payments, the contract will be deemed terminated and the contractor will be relieved from any contractual obligations and liabilities. We would like to emphasize that this proposed global settlement is not only a practical solution but also our commitment to addressing the concerns of the various stakeholders of the projects. We look forward to your prompt response and cooperation in resolving these matters. To expedite the resolution process, we kindly request that you revert with your feedback on the proposed global settlement by 9 November 2023 before 6pm. Your timely response will enable us to move forward swiftly and address these issues efficiently.”. The 1st Plaintiff responded vide e-mail dated 8.11.2023, stating, among others, the following: “…

In relation to the global settlement proposal set out in your email of 7.11.2023 (7:29PM), the Contractor wishes to raise a few preliminary observations: a. It is unclear whether the proposal was put forth by the Client, BGMC Bras Power Sdn Bhd. The Contractor requests that any global settlement proposal be issued in a formal letter by the Client, the contracting party under the EPCC Contract, in order for the Contractor to formally and properly consider any global settlement proposal. ….”. In this regard, Ms. Fiona has aptly submitted that the Plaintiffs cannot rely on the 7.11.2023 E-mail as exhibiting a pre-conceived plan to terminate the EPCC Contract when the 1st Plaintiff has questioned on the identity of the sender of the 7.11.2023 E-mail and has apparently not accepted the 7.11.2023 E-mail as a formal communication from the contracting party to the EPCC Contract. Moreover, Idiwan and BGMC had affirmed that, during the meeting on 18.12.2023, the Plaintiffs did not mention the 7.11.2023 E-mail at all and yet, in the instant applications, the Plaintiffs are using the 7.11.2023 E-mail to paint mala fide on the part of Idiwan and BGMC (see paragraph 87, encl. 17 in O.S. No. 1 and paragraph 82, encl. 17 in O.S. No. 2). [81] Overall, I find that the Plaintiffs’ allegation that Idiwan and BGMC are seeking to enrich themselves at the Plaintiffs’ expense is completely baseless. Idiwan and BGMC have acted within their rights pursuant to the EPCC Contract. [82] On a final matter, the Plaintiffs had filed its Speaking Notes (encl. in O.S. No. 1) in reply to Idiwan’s Additional Note on Delay in Assessment of EoT (encl. 64) where Idiwan had cited the decisions in Hatimuda Sdn Bhd v Turnpike Synergy Sdn Bhd & Anor [2019] MLJU 620 and Chengaljati Sdn Bhd v Turnpike Synergy Sdn Bhd & Anor [2019] MLJU 345 to support the submission that the quantum of EoT granted and whether there was delay in the submission and the assessment of the EoT applications do not amount to unconscionability. [83] The Plaintiffs accepted that, in determining whether there is unconscionable conduct, the Court has to examine the particular and peculiar facts of the case instead of adopting the broad-stoke approach. The Plaintiffs attempted to distinguish the two case authorities on their facts and emphasised that they are not relying on the computation of EoT to support the allegation of unconscionable conduct, but rather, the late assessment of EoT based on Clause 21.1(f) of the EPCC Contract which reads: “Within 35 days after receiving a claim or any further particulars supporting a previous claim, or within such other period as may be proposed by the Client and approved by the Contractor, the Client shall respond with approval, or with disapproval and detailed comments. He may also request any necessary further particulars, but shall nevertheless give his response on the principles of the claim within such time.”. [84] The Plaintiffs contended that the decision on the EoT applications and the imposition of Delay Damages were done concurrently after the works had been completed. This conduct is said to be unconscionable as the Plaintiffs had lost the right and opportunity to mitigate any delay to avoid the imposition of the Delay Damages, including to file any further EoT application. [85] However, as submitted by Ms. Fiona, there are letters which tend to show that there was an agreement by conduct that the assessment of the EoT applications will only be made after the COD, in particular the Plaintiffs’ letter dated 23.12.2020. In any event, the matter is before the Arbitral Tribunal and should not be the basis for an argument on unconscionability as this will lead to an opening of the floodgates; it would be too easy to injunct a call made on an unconditional on-demand performance bond and denude its business efficacy altogether. [86] Furthermore, the Plaintiffs did in fact submit further applications for EoT and no matter how the Plaintiffs coined the argument, it does not change the heart of the matter, namely whether it is the quantum of EoT or the manner in which the EoT applications were assessed, these are essentially contractual disputes to be ventilated before, and resolved by, the Arbitrator. Conclusion [87] Premised on the aforesaid consideration, the Plaintiffs’ applications in encls. 1 and 6 in O.S. No. 1 and O.S. No. 2 were dismissed with costs of RM20,000.00 to be paid by the Plaintiffs to D1 for each O.S. [88] The Court also ordered costs of RM1,500.00 to be paid by the Plaintiffs to D2 for each O.S. Dated: 31 January 2025 (ALIZA SULAIMAN) Judge High Court in Malaya Kuala Lumpur Counsels/ Solicitors: For the Plaintiffs in O.S. No. 1 and O.S. No. 2: Wong Hin Loong (Soh Jing Han, Loe Kuan Wing and Lee Shao Wei with him) Messrs. HL Wong, Soh & Co. Advocates & Solicitors L-5-9, No. 2, Jalan Solaris Solaris Mont’ Kiara 50480 Kuala Lumpur For the 1st Defendant in O.S. No. 1 and O.S. No. 2: Fiona Mathilda Bodipalar (Mathew Thomas Philip, Allan Ng, Nandakumar S. Haridas and Lee Sin Yee with her) Messrs. Thomas Philip Advocates & Solicitors No. 5-1, Jalan 22A/70A Wisma CKL Desa Sri Hartamas 50480 Kuala Lumpur For the 2nd Defendant in O.S. No. 1 and O.S. No. 2: