Ambank (M) Berhad v Yu Kuan Chon (WA-22NCC-574-08/2025)

This is the Plaintiff’s application for summary judgment pursuant to Order 14 Rules 1 and 2 of the Rules of Court 2012.

The issue that arises may be briefly stated. Can the Defendant, having executed a Settlement Agreement, accepted a revised repayment schedule, and thereafter defaulted, resist summary judgment by characterising the antecedent equity derivative swap transactions as wagering, gaming, or speculative transactions?

Having considered the pleadings, affidavits, and submissions, I answered that question in the negative and allowed the Plaintiff’s application for summary judgment.

The Plaintiff is a licensed financial institution. The Defendant was at all material times the Plaintiff’s client. By a 2002 ISDA Master Agreement and ISDA Credit Support Annex, both dated 30 August 2017, the parties entered into several equity derivative swap transactions.

The Plaintiff’s pleaded case is that the Defendant defaulted under the ISDA arrangements. Thereafter, at the Defendant’s request, the parties entered into a Settlement Agreement dated 1 March 2024.

Under clause 2.2 of the Settlement Agreement, the Defendant agreed to pay the Mutual Termination Amount according to the agreed payment schedule. The amount, including interest, was stated to be RM55,361,540.02 if calculated on the basis of an 18- month payment schedule. The Settlement Agreement also provided security over lands to secure, among other things, payment of the Mutual Termination Amount.

Clause 2.5 of the Settlement Agreement provided for default interest at 18% per annum if the Defendant failed to pay any amount due. Clause 2.12 was an entire agreement clause, providing that the Settlement Agreement constituted the entire understanding between the parties regarding the settlement of the Mutual Termination Amount and the provision of security for its payment.

The Plaintiff further pleaded that fixed deposits in the sum of RM41,436,369.92 had been set off, leaving the sum of RM49,214,666.87 as the outstanding amount to be paid to the Plaintiff together with interest.

At the Defendant’s request, the repayment schedule was subsequently revised by the Plaintiff’s letter dated 6 September

The Defendant then failed, refused and/or neglected to make payment according to the Revised Repayment Schedule.

The Plaintiff then issued a letter of demand dated 30 May 2025. A sum of RM16,068,253.53 calculated as at 30 April 2025 was demanded. By a further letter dated 15 August 2025, the Plaintiff demanded RM44,977,595.29 calculated as at 31 July 2025 together with default interest at 18% per annum on RM40,020,295.49 from 1 August 2025 until full settlement. The demanded sums were not paid.

I summarise the Defence under five broad heads.

First, the Defendant says that the equity derivative swap transactions were complex, novel, and were never properly explained to him. He says that these transactions were in substance over-the-counter derivatives and were, in truth, gaming, wagering, or speculation rather than hedging.

Secondly, the Defendant says that even if the transactions were described as hedging, they were hedging with the intention to wager, bet, or speculate. The Defendant further says that Section 362A of the Capital Markets and Services Act 2007 does not answer the factual question whether the transactions were entered into for the purpose of wagering or speculation.

Thirdly, the Defendant attacks clause 2.10 of the Settlement Agreement. The said clause reads:

2.10 Right to terminate and immediate enforcement. In the event that any govemmental, regulatory or other investigations, proceedings or disputes are commenced or threatened against Party B, Party A may: a) declare that all or part of the Mutual Termination Amount, and all other amounts accrued or outstanding under this Settlement Agreement be immediately due and payable, whereupon they shall become immediately due and payable, and/or b) exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Security Documents.

The Defendant contends that the afore-said clause is vague, sweeping, unconscionable, oppressive, and contrary to natural justice. He says that he had no real choice but to agree to that clause because the Plaintiff would otherwise not have agreed to the Settlement Agreement.

Fourthly, the Defendant says the Plaintiff failed to provide a margin analysis report, failed to particularise the number and type of the equity derivative swap transactions, and failed to plead or exhibit the Confirmations. He says the Confirmations are material because they would reveal the true number and frequency of the telephone trades.

Fifthly, the Defendant says the Plaintiff holds substantial securities and ought first to realise those securities before suing the Defendant personally. He says that until the securities are realised and any shortfall ascertained, the claim is premature.

The Plaintiff says this is a straightforward claim on the Settlement Agreement. The Plaintiff’s case is that the Defendant’s use of the ISDA arrangements, his default, his execution of the Settlement Agreement, his request for a revised repayment schedule, and his subsequent breach are not seriously disputable.

The Plaintiff says that by entering into the Settlement Agreement, the Defendant acknowledged and admitted the indebtedness. The Plaintiff further says that the defences now raised are afterthoughts and sham defences which do not meet the threshold required to resist summary judgment.

On the issue of wagering, the Plaintiff submits that the Defendant has not shown on the facts that the parties entered into the ISDA Agreement with a view to wagering a bet. The Plaintiff says that the mere uncertainty of investment return does not turn the transaction into a wager.

On the Confirmations, the Plaintiff says that its claim is grounded in the Settlement Agreement and that the Confirmations are evidence, not material facts requiring pleading. In any event, the Plaintiff says the Confirmations were exhibited in the Plaintiff’s affidavit in reply as “AMB-10”.

The principles under Order 14 are well settled. The Plaintiff must first show that the case comes within Order 14 and that the preliminary requirements have been satisfied. These include service of the statement of claim, entry of appearance, and an affidavit in support complying with Order 14 Rule 2.

Once those requirements are satisfied, the Plaintiff establishes a prima facie entitlement to judgment. The burden then shifts to the Defendant to satisfy the Court that there is a triable issue or some other reason why judgment should not be entered.

The Court is neither required to conduct a trial on affidavit nor bound to accept every assertion as a triable issue merely because it is asserted. A denial or allegation which is bare, equivocal, imprecise, inconsistent with contemporaneous documents, or inherently improbable may be rejected.

The Federal Court in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 makes clear that the Court must not stop at identifying an issue. It must go one step further and determine whether the issue is truly triable. A defendant must show a bona fide defence. A shadowy, speculative, or contrived defence will not suffice.

Another familiar proposition is that once the Plaintiff satisfies the preliminary requirements and establishes a prima facie case, the evidential burden shifts to the Defendant to show why judgment should not be entered (see: National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283).

It is not in dispute by the parties that the Plaintiff has complied with the preliminary procedural requirements. The burden shifts to the Defendant to raise a triable issue. The Plaintiff has exhibited and relied on the Settlement Agreement and the Revised Repayment Schedule. The pleaded debt is not a loose or unparticularised claim. It is anchored in a written settlement document, a stated Mutual Termination Amount, a payment schedule, a revision of that schedule, and a subsequent default.

More importantly, the commercial effect of the Settlement Agreement is plain. The Defendant agreed to a quantified payment arrangement. The Defendant obtained a repayment structure. The Defendant then failed to meet that repayment structure.

These facts are sufficient to establish a prima facie contractual claim.

The Defendant’s main theme in seeking to impugn the transactions is that they were wagers. I do not agree. Before saying why, it is necessary to first say what the transaction was. One must identify the creature before one condemns it.

The transactions were entered into through formalised agreements. They were neither an informal punt nor a private bet struck across a table. The ISDA Master Agreement was the umbrella. It supplied the legal architecture. The individual transactions were then made under that umbrella. The Credit Support Annex served a different but related function. It provided for credit support. In plain language, it was the collateral and margin mechanism. It existed because exposure could move as the market moved.

An equity derivative swap is not difficult to understand once stripped of its financial vocabulary. It is a contract whose value is linked to the value or performance of shares, a basket of shares, or an equity index. The parties need not buy or sell the shares themselves. Instead, they agree that payments between them will be calculated by reference to how the underlying equity performs. If the market moves one way, one party may have to pay. If it moves the other way, the other party may have to pay. That is the commercial risk and also the commercial bargain.

A contract does not become a bet merely because its outcome depends on a future event. Many honest commercial contracts look to the future. Insurance, forward contracts, commodity contracts, currency contracts, and derivative contracts are but some examples.

The law draws the line elsewhere. In a wager, the parties have no real interest in the subject matter save to win or lose. The event is merely the occasion for one to take from the other. There is no commercial object beyond the stake.

A derivative swap is different. It is a recognised financial contract. It may be used to hedge or to manage exposure. It may also carry risk but that does not convert it into gaming. Commercial men take risks every day. The Court does not call every risk a wager. This approach is consistent with Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council, third party) [1995] 1 All ER 1. There, the English High Court held that an interest rate swap was not a gaming or wagering contract because the purpose and interest of the contracting party were not directed to wagering. The case is useful not because the facts are identical, but because it reminds the Court that a swap is not to be condemned merely because payment obligations depend on future market movements. The inquiry remains one of substance.

Here, under the ISDA framework and Credit Support Annex, there were provisions for default, credit support, termination, expenses, and enforcement. Importantly, there was thereafter a Settlement Agreement. Under that Settlement Agreement, the Defendant agreed to pay the Mutual Termination Amount according to an agreed payment schedule.

The Defendant’s argument proceeds in a different way. He says the transactions were over-the-counter derivatives and were complex. He says they were entered into by telephone, that there were many Confirmations, and the transactions were speculative. He therefore says they were wagers.

That is a leap difficult to accept. Labelling a transaction as gaming, wagering, betting, speculative, and unconscionable do not answer the documents. Neither do they undo the Settlement Agreement. They do not by themselves raise a bona fide triable issue.

On that narrative, I will answer the first triable issue raised by the Defendant concerning the Settlement Agreement.

In my judgment, the Settlement Agreement is the central document in this application. The Plaintiff is not asking this Court, at this stage, to reconstruct every antecedent trade under the ISDA arrangements. The Plaintiff sues on the subsequent Settlement Agreement, under which the parties crystallised the amount due and agreed on repayment.

Commercial settlement agreements are intended to bring finality. They are not signed so that a party may later reopen every antecedent dispute unless there is a legally sustainable basis to impeach the settlement itself.

The Defendant does not credibly deny that he signed the Settlement Agreement. There is no credible denial either that the repayment schedule was later revised at his request or that he defaulted under the revised schedule. The Defendant’s position must therefore be tested against his own subsequent conduct. He entered into the Settlement Agreement. He obtained a revised repayment schedule. It was only later, when enforcement followed, that the present allegations were pressed. That simply cannot pass the law’s muster. In KKRMC Trading Sdn Bhd v Richallenge Corporation Sdn Bhd [2021] 1 LNS 1757, the Court treated a defendant’s later defence as an afterthought where the defendant had earlier sought time and indulgence to settle the outstanding sum.

The principle that a party is bound by a signed contractual document remains basic. In L’Estrange v F Graucob Ltd [1934] 2 KB 394, the Court held that a party who signs a contractual document is bound by its terms. That principle has been applied in our courts, including in Wee Lian Construction Sdn Bhd v Ingersoll-Jati Malaysia Sdn Bhd [2010] 4 CLJ 203 and CIMB Islamic Bank Bhd v LCL Corp Bhd & Anor [2015] 8 MLJ 832.

The Defendant’s principal defence is that the equity derivative swap transactions were gaming or wagering transactions. He relies on Section 26 of the Civil Law Act 1956, Section 31 of the Contracts Act 1950, and the definition of wagering in Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484, as adopted in John Lo Thau Fah v FACB Resorts Bhd [2011] MLJU 1577. In Carlill, Hawkins J defined 'wagering contract' as follows: “A wagering contract is one by which two persons professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting party having any other interest in that contract than the sum of stake he will win or lose, there being no other real consideration for the making of such contract by either of the parties.”

I accept the general proposition that a wagering agreement is void. I also accept that where a party properly demonstrates, on evidence, that a transaction is in substance a wager, the Court will not enforce it merely because it is dressed in commercial language.

But that is not this case on the affidavit evidence before me.

The Defendant’s argument proceeds largely from the nature of derivatives as a class, rather than from proof of the actual legal character of the specific transactions. The Defendant says derivatives may be speculative. He says the trades were conducted by telephone. He says the Plaintiff used the words “several” and “various”. He says there were many Confirmations. He says the transactions were not explained. To my mind, these are not enough.

I bear in mind the statutory treatment of derivatives. Section 362A of the Capital Markets and Services Act 2007 provides, in substance, that a derivative shall not be taken to be a gaming or wagering contract. The Defendant says that this provision does not conclude the matter because the true factual character of the transaction must still be examined. I accept, for present purposes, that the Court must still examine the facts. But the statutory provision is at least consistent with the broader proposition that derivatives are recognised financial instruments and are not to be treated as wagers merely because they are derivatives.

I have sought to explain in some detail what an equity derivative swap transaction is in the earlier part of this judgment. In amplification, the Defendant has not identified with precision which transaction was a wager, how the legal elements of wagering are made out, what the parties’ mutual wagering intention was, or why the subsequent Settlement Agreement should be treated as a settlement of an illegal wagering debt. The Defendant threw the label “wager” at the Court expecting it to be swallowed lock, stock and barrel.

The Defendant’s reliance on the phrases “speculation unless otherwise permitted by law and Party B’s internal policies” and “statistical and risk analysis” in the ISDA documents does not assist him. Those phrases, viewed commercially, recognise that financial products may carry risk and may be subject to risk analysis. They do not, without more, convert the transaction into an unlawful wager.

Indeed, if anything, the existence of risk analysis is consistent with a financial institution managing risk in a commercial transaction. It is not evidence that the parties were merely betting with each other.

I therefore find that the wagering defence is not a credible triable issue. It is a legal label unsupported by sufficient affidavit facts.

The Defendant says that the Plaintiff failed to plead or exhibit the Confirmations, and that these Confirmations would show the true number, type and frequency of the equity derivative swap transactions.

A Confirmation is neither a casual acknowledgement nor is it the umbrella agreement itself. It is the written record of an individual transaction entered into under the ISDA Master Agreement. In plain language, the Master Agreement sets the general rules. The Confirmation records the particular trade.

Thus, where an equity derivative swap transaction is agreed, whether orally, by telephone, or otherwise, the subsequent Confirmation records the essential commercial terms of that transaction. It identifies what was traded, the reference equity or shares, the relevant dates, the notional exposure, the payment mechanics and the other transaction-specific terms.

In my judgment, the alleged failure to exhibit the Confirmations does not defeat the Plaintiff’s application.

First, the Plaintiff’s cause of action is founded on the Settlement Agreement. The material facts necessary for that cause of action are the execution of the Settlement Agreement, the agreed indebtedness, the repayment schedule, the Defendant’s default, and the resulting outstanding sum. Those matters have been pleaded.

Secondly, Confirmations are evidential documents. They may explain the antecedent transactions, but they are not the material facts constituting the Plaintiff’s present claim on the Settlement Agreement. In simple terms, the Confirmations ship has long sailed with the advent of the Settlement Agreement.

Thirdly, the Plaintiff’s position is that the Confirmations were in any event exhibited in the Plaintiff’s affidavit in reply as Exhibit “AMB- 10”. The Defendant therefore cannot simply rely on their alleged absence as a basis to resist judgment.

Fourthly, even if the Confirmations were many, that fact by itself proves nothing. A large number of transactions may show active trading. It does not, without more, show illegality, wagering, unconscionability, or an answer to a later settlement.

The Defendant’s complaint about particulars is therefore not a triable issue. It is, in substance, an attempt to reopen the antecedent commercial history after the parties had already reduced the debt into a written settlement arrangement. Issue 4: Unconscionability, Oppression and Natural Justice

The Defendant attacks clauses in the Settlement Agreement as vague, sweeping, unconscionable, oppressive and contrary to natural justice. He also says that he had no choice but to accept the Settlement Agreement.

Again, the allegations are label-centric, unsupported by sufficient affidavit evidence.

Unconscionability is a serious allegation. In CIMB Islamic Bank Bhd v Zainul Azizan bin Zainul Aziz & Anor [2025] MLJU 4426, the Court observed that an allegation of undue influence or unconscionable bargaining is a serious one requiring credible evidence of coercion, domination or an overwhelmingly one-sided bargain. A bare assertion will not do.

The Defendant’s affidavit evidence does not cross that threshold. Commercial pressure is not, without more, unconscionability. A hard bargain is not, without more, oppression. A high default rate agreed in a settlement is not, without more, a vitiating factor. It requires more than the assertion that the bargain was hard, the interest rate was high, or the borrower was under commercial pressure. The Defendant must show facts capable of establishing coercion, domination, exploitation of special disadvantage, fraud, misrepresentation, or some other recognised vitiating factor.

The Defendant has not done so.

The evidence instead shows a commercial settlement following default. The Defendant was not a stranger to commercial dealings. He executed the Settlement Agreement. He obtained a revised repayment schedule. He only raised the present attacks after the Plaintiff sued.

The Court must be slow to permit a party to resile from a written settlement merely because, with hindsight, the bargain has become burdensome.

I therefore reject the unconscionability defence as a triable issue.

The Defendant also says that the default interest of 18% per annum is unconscionable and that the claim for costs and expenses is inadequately particularised.

As to default interest, the rate was expressly provided for in the Settlement Agreement. The Defendant has not shown a credible basis for the Court to strike down that contractual rate at the summary judgment stage. As to costs and expenses, I accept that any claim for future or yet-unincurred enforcement costs must be dealt with carefully. At most, it may affect the manner in which contractual costs or expenses are quantified. Any recoverable contractual costs or expenses must, where necessary, be subject to proper proof, taxation or assessment. That, however, does not answer the principal debt nor does it not amount to a defence to the liquidated sum due under the Settlement Agreement.

The Defendant says that the Plaintiff holds substantial securities and must first realise those securities before proceeding personally against him. He says that until the securities are realised and the net shortfall ascertained, the claim is premature.

I do not accept that submission.

Security is ordinarily collateral to the debt. Unless the contract provides otherwise, a creditor is not required to exhaust its security before suing the principal debtor. The availability of security does not suspend the debtor’s personal liability. A lender is entitled to elect which remedy or security it wishes to pursue. If authority is needed for this proposition, one need only refer to the case of Chan Boi Loi v Public Bank Bhd and another application [2011] 1 MLJ 478. The appellant there argued that the respondent bank had to take foreclosure proceedings to have the lands sold off first before enforcing the appellant's promise to repay the loan. Gopal Sri Ram FCJ held: “We would reiterate that a lender is entitled to pursue all remedies available against a borrower simultaneously, contemporaneously, or successively to recover the money lent unless there is an agreement to the contrary."

The Defendant has not pointed to any clause in the Settlement Agreement which makes realisation of security a condition precedent to the Plaintiff’s right to sue. On the contrary, the Settlement Agreement provides for repayment by the Defendant, with the security serving to secure that repayment.

The securities point therefore does not raise a triable issue.

The Defendant’s Defence does not cross the minimum evidential threshold required to resist summary judgment.

The Plaintiff’s claim is founded on a written Settlement Agreement. The Defendant executed it. The Defendant accepted its benefit by obtaining a revised repayment schedule. The Defendant then breached it. The Court cannot permit a defendant to avoid a clear settlement debt by raising broad allegations of wagering, speculation and unconscionability without cogent affidavit evidence.

For these reasons, I allow the Plaintiff’s application for summary judgment with costs. Dated the 16th day of July 2026 -sgd- ……………………………………………………………………… MUHAMMAD ADAM BIN ABDULLAH Judicial Commissioner (Commercial Division NCC 4) High Court of Malaya In the Federal Territory of Kuala Lumpur, Malaysia Counsel for the Plaintiff : Foo Joon Liang Law Hui Yee Messrs. Gan Partnership Counsel for the Defendant : Lee Wei Kang Messrs. Dennis Nik & Wong

Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 2. Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484 3. Chan Boi Loi v Public Bank Bhd and another application [2011] 1 MLJ 478 4. CIMB Islamic Bank Bhd v LCL Corp Bhd & Anor [2015] 8 MLJ 832 5. CIMB Islamic Bank Bhd v Zainul Azizan bin Zainul Aziz & Anor [2025] MLJU 4426 6. John Lo Thau Fah v FACB Resorts Bhd [2011] MLJU 1577 7. KKRMC Trading Sdn Bhd v Richallenge Corporation Sdn Bhd [2021] 1 LNS 1757 8. L’Estrange v F Graucob Ltd [1934] 2 KB 394 9. Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council, third party) [1995] 1 All ER 1 10. National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283 11. Wee Lian Construction Sdn Bhd v Ingersoll-Jati Malaysia Sdn Bhd [2010] 4 CLJ 203

Order 14 rules 1 and 2 of the Rules of Court 2012 2. Section 362A of the Capital Markets and Services Act 2007 3. Section 26 of the Civil Law Act 1956 4.