Niro Ceramic Sales & Services (M) Sdn Bhd v Guocera Sdn Bhd (BA-22NCvC-381-09/2024)

NIRO CERAMIC SALES & SERVICES (M) SDN BHD [Company No: 199201016212 (247716-T)]

FOSHAN NIRO CERAMIC BUILDING MATERIALS TRADING CO LTD (Business Registration No: 440600400000552) …PLAINTIFFS

GUOCERA SDN BHD [Company No: 197801000415 (37438-T)]

CHENG LI YONG (NRIC No: 770624-02-5734) …DEFENDANTS 15/01/2026 15:34:34 BA-22NCvC-381-09/2024 Kand. 112 GROUNDS OF JUDGMENT

This is the Plaintiffs’ application in Enclosure 3, seeking an interim injunction pursuant to Order 29 of the Rules of Court 2012 and the Specific Relief Act 1950, to restrain the Defendants, pending the disposal of the main suit, from approaching or poaching the Plaintiffs’ employees and from soliciting those employees for confidential information or services while they remain employed by the Plaintiffs.

The Plaintiffs contended that the Defendants’ conduct amounted to, among other things, unlawful interference with trade and a conspiracy to injure, and that interim relief was necessary to prevent further harm pending trial.

An ad interim injunction had earlier been granted on 23 October

The present application concerned whether the interim restraint should be continued until the suit was disposed of.

Having perused the cause papers and carefully considered the parties’ written and oral submissions, this Court dismissed the Plaintiffs’ application.

My reasons are stated below.

The Plaintiffs and the Defendants are corporate entities operating in the ceramic and related commercial markets in Malaysia. Both parties are therefore competitors within the same industry.

The Plaintiffs commenced the present action alleging that the Defendants had engaged in conduct which interfered with the Plaintiffs’ business operations, particularly through the alleged approaching and solicitation of the Plaintiffs’ employees.

The Plaintiffs contended that certain former employees of the Plaintiffs had joined the Defendants, and that this movement of employees had exposed the Plaintiffs to the risk of losing trained personnel and commercially sensitive information.

The Plaintiffs further relied on the existence of employment contracts entered into between the First Plaintiff and its employees, including the Second Defendant. These contracts were said to contain Clause 18, which included provisions relating to: a. non-solicitation of employees and customers, b. non-competition, and c. confidentiality obligations.

The Plaintiffs alleged that the Defendants’ conduct in approaching or engaging the Plaintiffs’ employees, and in allegedly obtaining services or information from them, amounted to unlawful interference with trade and a conspiracy to injure.

The Defendants did not dispute that certain former employees of the Plaintiffs had joined the Defendants. However, the Defendants maintained that such movement of employees occurred within the context of ordinary commercial recruitment and competition.

The Defendants further contended that the contractual non-solicitation and non-competition obligations relied upon by the Plaintiffs had expired by the time this application was filed, and that there was therefore no subsisting contractual restraint capable of enforcement.

The Defendants also argued that the Plaintiffs had not clearly identified or particularised the confidential information allegedly at risk, and that the Plaintiffs’ losses, if any, were commercial in nature and capable of compensation by damages.

The Plaintiffs filed the present application (Enclosure 3) seeking an interim injunction to restrain the Defendants from approaching or poaching the Plaintiffs’ employees and from soliciting such employees for confidential information or services, pending the disposal of the main suit.

An ad interim injunction was granted at an earlier stage pending the hearing of Enclosure 3. The present decision concerned whether that interim restraint should be continued pending trial.

The Plaintiffs’ application for interim injunctive relief was premised on their assertion that the Defendants had engaged in conduct that went beyond ordinary commercial competition.

According to the Plaintiffs, the Defendants had actively approached and solicited the Plaintiffs’ employees with the intention of inducing them to leave the Plaintiffs’ employment and to provide services and information to the Defendants.

The Plaintiffs contended that such conduct exposed them to the risk of losing trained and experienced personnel and, more importantly, to the risk that confidential and commercially sensitive information would be disclosed or used by the Defendants.

The Plaintiffs emphasised that their claim was not confined to the enforcement of contractual restraints alone. They asserted that, even apart from any contractual provisions, the Defendants’ conduct amounted to unlawful interference with trade and a conspiracy to injure, both recognised causes of action in tort.

The Plaintiffs submitted that the continued solicitation of their employees, if left unchecked, would cause ongoing harm to their business operations and their competitive position in the market. They argued that once confidential information is disclosed or used, the damage would be difficult to reverse.

On this basis, the Plaintiffs maintained that interim injunctive relief was necessary to prevent further harm pending the full determination of the substantive claims at trial.

The Defendants opposed the Plaintiffs’ application, submitting that the Plaintiffs had failed to satisfy the established principles governing the grant of an interlocutory injunction.

The Defendants’ position was that the Plaintiffs’ complaints arose from ordinary commercial competition, particularly the movement of employees within the industry, which is not unlawful in itself.

The Defendants emphasised that employees are not the property of any employer and are entitled to seek alternative employment, and that the mere fact that employees formerly employed by the Plaintiffs had joined the Defendants did not, without more, justify the grant of injunctive relief.

A central plank of the Defendants’ opposition concerned the Plaintiffs’ reliance on contractual non-solicitation and confidentiality obligations. The Defendants submitted that the Plaintiffs relied principally on Clause 18 of the employment contract between the First Plaintiff and the Second Defendant.

According to the Defendants, Clause 18 contained provisions relating to, among others, non-solicitation of employees and customers, non-competition, and confidentiality obligations. The Defendants contended that these contractual restraints were expressly limited in duration and that the non-solicitation and non-competition obligations had expired by the time the present application was filed.

It was therefore submitted that there was no subsisting contractual obligation capable of being enforced by way of interim injunctive relief.

The Defendants further argued that an interlocutory injunction could not be used to indirectly revive, extend, or enforce contractual restraints that had already expired.

In this regard, the Defendants submitted that the Plaintiffs were, in substance, seeking to achieve through interim relief what they could no longer obtain through contract.

The Defendants also addressed the Plaintiffs’ reliance on the confidentiality limb of Clause 18. While Clause 18 was said to impose confidentiality obligations, the Defendants submitted that the Plaintiffs had failed to clearly identify or particularise the confidential information allegedly at risk.

The Plaintiffs’ allegations were said to be general in nature, failing to specify: what precise information was confidential, how it was protected as confidential, and how or when such information was allegedly misused or threatened to be misused.

In the absence of clear particulars, the Defendants argued that the Court was being asked to impose broad and vague restraints without a proper factual basis.

The Defendants also responded to the Plaintiffs’ attempt to frame their case as one founded in tort, namely, unlawful interference with trade and conspiracy to injure.

The Defendants submitted that the Plaintiffs could not circumvent the expired contractual restraints by framing their complaints as tort claims at this stage.

According to the Defendants, the affidavit evidence did not show any conduct amounting to unlawful interference or conspiracy, but only lawful competition and recruitment.

The Defendants further submitted that any loss alleged by the Plaintiffs was commercial and economic in nature, and therefore capable of assessment and compensation by way of damages. According to the Defendants, such loss included employee turnover, recruitment and training costs, and any alleged loss of competitive advantage.

The Defendants argued that these were precisely the types of loss for which damages provide an adequate remedy, and that this militated against the grant of interlocutory injunctive relief.

The Defendants emphasised the issue of delay and contended that the Plaintiffs were aware of the alleged conduct relied upon well before the filing of the present application, yet sought injunctive relief only at a later stage.

The Defendants submitted that the delay weakened the Plaintiffs’ claim of urgency and weighed against granting interim relief.

The Defendants submitted that the balance of convenience lay against granting the injunction sought.

They contended that the orders sought were wide in scope and would effectively restrain the Defendants from carrying on their ordinary business activities, including lawful recruitment, pending trial.

The Defendants argued that this would cause real hardship and prejudice to them before the parties’ substantive rights were finally determined.

In contrast, the Defendants submitted that the Plaintiffs’ position would not be irreparably prejudiced if the injunction were refused, as any proven loss could be compensated by damages.

The Defendants therefore maintained that maintaining the status quo did not require the imposition of interim restraints, as both parties had competed in the market before the application was filed and continued to do so thereafter.

Having regard to all these matters, the Defendants submitted that the Plaintiffs had failed to meet the requirements for the grant of an interlocutory injunction. They contended that the application was an attempt to restrain lawful competition and to extend expired contractual obligations through interim relief, and that the Court should therefore dismiss the application.

Both parties relied on the Court of Appeal’s decision in Keet Gerald Francis Noel John v Mohd Noor@ Harun Abdullah & Ors [1995] 1 CLJ 293. As set out in Keet Gerald, a court hearing an application for an interlocutory injunction must address three principal questions:

whether there is a serious issue to be tried;

whether damages would be an adequate remedy; and

where the balance of convenience lies.

At this interlocutory stage, the Court is not concerned with determining the merits of the Plaintiffs’ substantive claims or the Defendants’ defences. The Court’s task was confined to applying the settled principles governing interlocutory injunctions set out above. Whether there is Serious Issue to Be Tried

The first issue for determination is whether the Plaintiffs had established that there was a serious issue to be tried, as required by the principles set out in Keet Gerald. The threshold is low.

In the present case, the Plaintiffs alleged that the Defendants had engaged in conduct amounting to unlawful interference with trade and conspiracy to injure, arising from the alleged solicitation of the Plaintiffs’ employees and the alleged exposure of the Plaintiffs’ employees to confidential information.

These allegations were disputed by the Defendants, who maintained that their conduct constituted lawful competition and recruitment.

Without expressing any view on the merits of the Plaintiffs’ claims or the Defendants’ defences, I am satisfied that the allegations raised by the Plaintiffs were not plainly unsustainable and were fit to be ventilated at trial.

Accordingly, I find that the Plaintiffs have met the first limb of the test, namely that there is a serious issue to be tried.

The second issue concerned whether damages would be an adequate remedy if the Plaintiffs ultimately succeeded at trial.

The Plaintiffs’ case focused on the alleged loss arising from the movement of employees, the alleged solicitation of employees, and the potential misuse of commercial or confidential information.

The Defendants argued that such losses were commercial in nature and capable of being assessed and compensated in monetary terms.

On the material before the Court, this Court finds that the alleged loss relating to the departure of employees, recruitment costs, and any resulting competitive disadvantage was not of a nature that could not be quantified.

While the Plaintiffs expressed concern about the possible misuse of confidential information, the alleged confidential information had not been clearly particularised at this interlocutory stage.

In the absence of clear particulars identifying the confidential information said to be at risk, I am not persuaded that the Plaintiffs have shown that damages would be an inadequate remedy.

I therefore find that the second limb of the Keet Gerald test did not operate in the Plaintiffs' favour.

The third issue required the Court to consider where the balance of convenience lay and to determine the true status quo.

In assessing this limb, several factors were material.

The Defendants raised the issue of delay, arguing that the Plaintiffs were aware of the alleged acts relied upon for some time before filing the present application.

While delay is not, by itself, determinative, it is a relevant discretionary consideration in an application for interlocutory injunctive relief. On the material before me, the lapse of time between the alleged acts and the filing of this application weighs against granting interim relief.

The Defendants also contended that the contractual non-solicitation clause relied upon by the Plaintiffs had expired. At this interlocutory stage, this contention is a relevant consideration in assessing whether interim restraints were justified, particularly where the relief sought would, in effect, restrain conduct pending trial. This Court finds that the existence of this contention further weighs against the continuation of interim relief.

The Plaintiffs relied on the risk of disclosure or misuse of confidential information as a basis for interim relief. However, the confidential information alleged to be at risk had not been clearly identified or particularised. In the absence of such particulars, the Court is not in a position to assess the scope or necessity of the wide restraints sought.

A central consideration in the balance of convenience is identifying the true status quo. There is no status quo to maintain, as the status quo before the application and now is the same. Before the application was filed and at the time it was heard, both parties were operating and competing in the same market. There was no distinct state of affairs that required preservation by injunctive relief.

Therefore, on the material before the Court, restraining the Defendants from approaching employees or from carrying on their business in the manner sought would interfere with their ordinary business activities pending trial.

I am satisfied that the greater risk of injustice would arise if the Defendants were restrained in this manner rather than allowing both parties to continue competing while the substantive issues are determined at trial.

Accordingly, I find that the balance of convenience weighs against the grant of interlocutory relief.

This Court is required to consider the three limbs of the Keet Gerald test together, not in isolation. Having weighed these three factors, and without making any finding on the merits of the Plaintiffs’ claims or the Defendants’ defences, I hold that although there is a serious issue to be tried, damages would be an adequate remedy and that the balance of convenience lies against granting an interim injunction.

I find that this is not an appropriate case for the continuation of the interim injunction pending trial.

Accordingly, for the reasons stated above, I hereby order that the Plaintiffs’ application for an interim injunction be dismissed, with costs of RM10,000 to be paid to each Defendant. The ad interim order granted on 23 October 2024 is discharged and set aside. Dated 15 January 2026 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Melisa Chan & Shyuk Wern (Messrs Justin Voon Chooi & Wing) For the First Defendant : Jack Yow & Cassandra Oh (Messrs Rahmat Lim & Partners) For the Second Defendant : Peter Neik & Jazz Cheah (Messrs Ting Asiah & Co)