Bank Pembangunan Malaysia Berhad v Zavarco Berhad (WA-22NCC-313-07/2018)

By Enclosure 257 dated 17.3.2026 stay application , the 1st Defendant in the c Bank Pembangunan order for a stay of further proceedings in this action pending the full and final disposal of the following appeals filed by Bank Pembangunan in the Court of Appeal :

Civil Appeal No. W - 02 (IM) (NCC) - 457 - 03 - 2026;

(ii) Civil Appeal No. W - 02 (IM) (NCC) - 445 - 03 / 2026;

(iii) Civil Appeal No. W - 02 (IM) (NCC) - 458 - 03 / 2026;

(iv) Civil Appeal No. W - 02 (IM) (NCC) - 451 - 03 / 2026;

Civil Appeal No. W - 02 (IM) (NCC) - 452 - 03 / 2026;

(vi) Civil Appeal No. W - 02 (IM) (NCC) - 449 - 03 / 2026;

(vii) Civil Appeal No. W - 02 (IM) (NCC) - 454 - 03 / 2026;

(viii) Civil Appeal No. W - 02 (IM) (NCC) - 455 - 03 / 2026;

(ix) Civil Appeal No. W - 02 (IM) (NCC) - 459 - 03 - 2026;

Civil Appeal No. W - 02 (IM) (NCC) - 453 - 03 / 2026;

(xi) Civil Appeal No. W - 02 (IM) (NCC) - 456 - 03 / 2026;

(xii) Civil Appeal No. W - 02 (IM) (NCC) - 447 - 03 / 2026;

(xiii) Civil Appeal No. W - 02 (IM) (NCC) - 448 - 03 / 2026; and

(xiv) Civil Appeal No. W - 02 (IM) (NCC) - 450 - 03 / 2026. (collectively referred to as the appeals

On 10.4.2026, I dismissed the stay application. Here are my reasons. Background facts

At the request of the 1st Plaintiff in the counterclaim, i.e. Aries Aries Bank Pembangunan granted a term loan facility in the sum of RM facility - finance the construction of a fibre - optic network in Peninsular Malaysia. S/N 7cApfpZus0mpJINb/e4Q

The facility is secured by, amongst others, the following :

a debenture dated 28.6.2012 executed by Aries in favour of Bank

a corporate guarantee and indemnity dated 28.6.2012 executed by the 2nd Plaintiff in the counterclaim, i.e. Zavarco Bhd, in favour of Bank Pembangunan; and

a personal guarantee and indemnity dated 17.4.2017 executed by the 3rd Plaintiff in the counterclaim, i.e. Zulizman, in favour of Bank Pembangunan. (Aries, Zavarco Bhd and Zulizman are collectively referred to as the Aries Defendants . The instant suit

the repayment of the facility, Bank Pembangunan commenced this action to recover the amount owing under the facility, Zavarco Bhd corporate guarantee and Zulizman personal guarantee respectively.

On 23.8.2018, the Aries Defendants filed their defence and counterclaim.

On 25.9.2018, Bank Pembangunan applied for leave to enter summary judgment against the Aries Defendants. Subsequently on 4.10.2018, Bank Pembangunan applied to strike out the counterclaim. S/N 7cApfpZus0mpJINb/e4Q

On 9.5.2019, the High Court allowed Bank Pembangunan judgment application. Judgment was entered against the Aries Defendants for the sum of RM 451,266,763.13 as at 9.7.2018, together judgment Bank Pembangunan counterclaim.

The Aries Defendants appealed to the Court of Appeal against the decisions of the High Court. On 25.11.2021, the Court of Appeal affirmed the judgment.

Further, the Court of Appeal allowed the appeal against the striking out of the counterclaim. The counterclaim was remitted back to the High Court for trial. It is now before me.

On 17.12.2021, the Aries Defendants applied for leave to appeal to the Federal Court against the decision of the Court of Appeal in affirming the judgment. On 25.4.2022, the Federal Court dismissed the said leave application. The Kuala Lumpur High Court Civil Suit No. WA - 22 NCC - 264 - 06 / 2022 suit 264

On 15.6.2022, Bank Pembangunan brought suit 264 against 30 defendants for, amongst others, bribery, fraud, conspiracy to defraud, Quistclose trust, dishonest assistance, knowing receipt and monies had and received. In that suit, Bank Pembangunan seeks compensation for S/N 7cApfpZus0mpJINb/e4Q the losses suffered as a result of the alleged wrongdoings by the said 30 defendants in connection with the facility.

On 23.12.2022, the Aries Defendants obtained leave to amend their counterclaim in the instant suit. According to Bank Pembangunan, the Aries Defendants, by the said amendments, enlarged their counterclaim to include matters which relate to the subject matter of suit 264, including issues concerning bribery and fraud.

It appears that there are interrelated issues between the counterclaim in the instant suit and the claims in suit 264. As such, the parties agreed that the counterclaim herein be tried after the conclusion of the trial in suit 264.

The trial of suit 264 was originally fixed on 8.12.2025 to 12.12.2025 and 18.5.2026 to 22.5.2026. The trial of the counterclaim in the instant suit was to commence thereafter on 15.6.2026 to 19.6.2026 and 13.7.2026 to 16.7.2026.

In November / December 2025, the various defendants in suit 264 filed applications to strike out suit 264 (collectively referred to as the striking out applications

On 23.2.2026, the High Court in suit 264 allowed the striking out applications and struck out suit 264. Suit 264 was struck out on the principal grounds that the doctrine of merger applies, and suit 264 is barred by res judicata and issue estoppel due to the position taken by Bank Pembangunan in obtaining the judgment in the instant suit. S/N 7cApfpZus0mpJINb/e4Q

On 3.3.2026, Bank Pembangunan appealed against the decision of the High Court in allowing the striking out a appeals appeals are presently fixed for case management on 2.6.2026, which was approximately three months from the date of the filing of the appeals.

On 17.3.2026, Bank Pembangunan filed this stay application.

In gist, Bank Pembangunan in this action are as follows :

Suit 264 has overlapping issues with the counterclaim in the instant suit. The parties in this matter had previously agreed for the counterclaim herein to be tried after the disposal of suit 264;

Bank Pembangunan has filed the appeals against the striking out of suit 264. If Bank Pembangunan is successful on the appeals :

The counterclaim in the instant suit is interrelated to suit 264;

(ii) Suit 264 will have to be disposed of first, consistent with the parties agreement;

(iii) To prevent multiplicity of proceedings and inconsistent findings in two suits (i.e. suit 264 and the counterclaim in the instant suit); S/N 7cApfpZus0mpJINb/e4Q

(iv) To preserve the integrity of the appeals, given that suit 264 may be reinstated; and

Bank Pembangunan will be prejudiced if the trial of the counterclaim in the instant suit proceeds. No special circumstances

It is my finding that there are no special circumstances warranting a stay of proceedings in this action. Here is my explanation.

Since suit 264 has been struck out on 23.2.2026, there is strictly speaking, no longer any pending issue for suit 264 as thing stands.

Accordingly, the p (i.e. that the counterclaim in the instant suit be tried after the conclusion of suit 264) has been rendered otiose and is no longer operative. Any directions of this court necessarily trumps and prevail over the p .

In this regard, during a case management of the instant suit on 11.12.2025, I had directed that the trial of the counterclaim herein shall proceed (on the scheduled trial dates in June 2026), in the event that the striking out applications in suit 264 are allowed. That has indeed materialised. S/N 7cApfpZus0mpJINb/e4Q

Suit 264 having been struck out necessarily means that any alleged overlapping issues are rendered irrelevant. Moreover, I am not convinced that there are overlapping issues which must necessarily prevent the instant suit from going to trial, pending the disposal of suit 264, and now pending the appeals.

The counterclaim herein had been revived by the Court on Appeal since 25.11.2021, and is ready to proceed to trial. The pre - trial directions for the counterclaim were duly issued by the court for the . The counterclaim in the instant suit is fixed for trial from 15.6.2026 to 19.6.2026 and 13.7.2026 to 17.7.2026;

Notwithstanding that the counterclaim in the instant suit had been revived on 25.11.2021 and the parties subsequently proceeded to the Federal Court, Bank Pembangunan omitted to disclose the overlapping issues at first instance in the instant suit. Instead, Bank Pembangunan filed suit 264 in June 2022 (after the revival of the counterclaim in the instant suit).

Following the allegations of bribery and fraud which were raised by Bank Pembangunan in suit 264, the Aries Defendants amended their counterclaim to include issues arising from the alleged bribery and fraud. That does not amount to a valid or reasonable ground for a stay of proceedings.

The grounds relied upon by BPMB are speculative. They are based on the assumption that the appeals will be allowed. As S/N 7cApfpZus0mpJINb/e4Q matters presently stand, suit 264 has been struck out, and remains so unless and until set aside on appeal.

The outcome of the appeals in suit 264 has no bearing on the Aries Defendants counterclaim in the instant suit, as the Aries Defendants are not a party to suit 264. I do not see the risk of inconsistent findings in the two suits (i.e. suit 264 and the counterclaim in the instant suit), as alleged by Bank Pembangunan.

The cause of action and prayers sought in suit 264 are directed against other parties, and not the Aries Defendants. The Aries Defendants, who are not a party to suit 264, would be prejudiced if they are forced to wait for the outcome of the appeals in suit 264.

An appeal does not equate to a stay, and an appeal does not amount to special circumstance for a stay. The application of the relevant legal principles

A party applying for a stay must demonstrate that special circumstances exist. (See the Federal Court case of Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257). However, in this case, Bank Pembangunan failed to show any special circumstances in supporting the stay application. Bank Pembangunan merely raised speculations on the assumption of allowed. S/N 7cApfpZus0mpJINb/e4Q

In Jagdis Singh a/l Banta Singh v Outlet Rank (M) Sdn Bhd [2013] 4 MLJ 213 at 222, the Court of Appeal stressed that a suit has to be heard expeditiously and completed without any inhibition midway. Therefore, where an application for stay of proceedings is intended to merely stop or suspend the proceedings, it will be refused.

In similar vein, the Court of Appeal in International Construction & Civil Engineering Sdn Bhd v. Jittra Sdn Bhd & Ors [2018] CLJU 1252 at [15] held that the threshold for a stay of proceedings is very high in cases before the trial court. The strict rule is that an action must proceed expeditiously. The court will not stay a proceeding unless there are compelling reasons to do so, and not merely on the grounds of what is

I concur with the sentiment expressed by the High Court in Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 at 311. To wit, that the burden for a stay of proceeding should be heavier than that for a stay of execution. This is because a stay of proceeding will hinder an expeditious disposal of a suit.

The counterclaim in the instant suit was first filed in the year 2018, which is almost eight years ago. There is no justification for this suit to be dragged on indefinitely based on the pending appeals, the outcome of which is uncertain. An expeditious disposal of this suit is desirable. This is especially since the issues in suit 264 are no longer live issues, after suit 264 has been struck out.

At this juncture, I refrain from making any determination concerning the merits of the counterclaim in the instant suit. Nevertheless, it is noted S/N 7cApfpZus0mpJINb/e4Q that the counterclaim in the instant suit was struck out by the High Court on 9.5.2019, but was reinstated by the Court of Appeal on 25.11.2021. Later, on 23.12.2022, the court allowed the Aries Defendants for an amendment to the counterclaim to include averments pertaining to fraud, conspiracy, illegality and vicarious liability.

An applicant for a stay application has to state and prove that there are special circumstances and that the appeal will be rendered nugatory, in order for the court to exercise its discretion to order a stay.

Here however, Bank Pembangunan based on a unsupported speculation or presumption of if the appeals are allowed. There is no cogent evidence of the existence of any special circumstances. It has not been shown that the appeals will be rendered nugatory, if a stay is not allowed.

Bank Pembangunan is relying on the appeals filed in another matter, i.e. suit 264, to stay the counterclaim in the instant suit. This would be prejudicial to the Aries Defendants, if they are compelled to wait for the outcome of the appeals. Especially since the first case management of the appeals will only take place on 2.6.2026, which is approximately two months later.

Bank Pembangunan would not be prejudiced in the event that it is successful in the appeals, and a stay of proceeding is not allowed. This is because Bank Pembangunan is then at liberty to proceed with suit 264 against the 30 defendants therein. Whereas none of the Aries Defendants are parties to the appeals, nor privy to suit 264. There is therefore no valid reason to stay the proceedings in this action at the eleventh hour. S/N 7cApfpZus0mpJINb/e4Q

In submissions, Bank Pembangunan stated that the counterclaim would only be stayed for a short period of time A stay will most certainly derail the scheduled trial from going on in June 2026, which is less than two months from now.

If a stay is allowed, it may be quite a while before the next available trial dates can be allocated to this matter thereafter. On top of that, the trial cannot happen until the appeals are heard and decided. Given that the first case management of the appeals is fixed on 2.6.2026, the disposal of the appeals is not likely to be completed anytime soon.

In conclusion, there are no special circumstances which warrant a stay of proceedings in this action. The counterclaim in the instant suit ought to proceed to trial in June 2026 as directed. A stay at this juncture merely hinders an expeditious disposal of the instant suit. Fair consideration has to be given to the Aries Defendants in the administration of justice.

For the reasons above, I dismissed the stay application. I awarded costs of RM 5,000 to the Aries Defendants. S/N 7cApfpZus0mpJINb/e4Q Dated 16 April 2026 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2) Counsels Goh Tseng Fook and Yeap Xi Jin (Messrs. Lim Kian Leong & Co.) for the Plaintiffs in the counterclaim Kumar Kanagasingam, Chia Oh Sheng and Michelle Louis (Messrs. Lee Hishammuddin Allen & Gledhill) for the 1st Defendant in the counterclaim Case reference 1. Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 2. Jagdis Singh a/l Banta Singh v Outlet Rank (M) Sdn Bhd [2013] 4 MLJ 213 3. International Construction & Civil Engineering Sdn Bhd v. Jittra Sdn Bhd & Ors [2018] CLJU 1252 4. Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 S/N 7cApfpZus0mpJINb/e4Q