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

By Enclosure 288 dated 18.4.2026 ("amendment application"), the $ ^{1st} $ Defendant in the counterclaim ("Bank Pembangunan") seeks leave to amend its Reply to Defence and Amended Defence to Amended Counterclaim re - dated 21.3.2023 ("amended defence"). Enclosure 288 is made under Order 20 rule 5 of the Rules of Court 2012.

On 14.5.2026, I allowed Bank Pembangunan's amendment application under Enclosure 288. Here are my reasons. Background facts

At the request of the $ 1^{\mathrm{st}} $ Plaintiff in the counterclaim, i.e. Aries Telecoms (M) Bhd ("Aries"), Bank Pembangunan granted a term loan facility in the sum of RM 400 million ("facility") to Aries to part - finance the construction of a fibre - optic network in Peninsular Malaysia.

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

(a) a debenture dated 28.6.2012 executed by Aries in favour of Bank Pembangunan;

(b) a corporate guarantee and indemnity dated 28.6.2012 executed by the $ 2 ^{n d} $ Plaintiff in the counterclaim, i.e. Zavarco Bhd, in favour of Bank Pembangunan; and

(c) a personal guarantee and indemnity dated 17.4.2017 executed by the $ 3^{rd} $ 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 present suit

On 26.7.2018, arising from Aries' default in the repayment of the facility, Bank Pembangunan commenced the present suit to recover the amount owing under the facility, Zavarco Bhd's corporate guarantee and Zulizman's personal guarantee respectively.

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

On 25.9.2018, Bank Pembangunan applied for summary judgment against the Aries Defendants. Subsequently on 4.10.2018, Bank Pembangunan applied to strike out the counterclaim.

On 9.5.2019, the High Court allowed Bank Pembangunan's summary judgment application. Judgment was entered against the Aries Defendants for the sum of RM 451,266,763.13 as at 9.7.2018, together with interest and costs ("judgment"). The High Court also allowed Bank Pembangunan's application to strike out the 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 was fixed for trial before me on 15.6.2026 to 19.6.2026 and 13.7.2026 to 16.7.2026.

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, breach of directors' duties, fraudulent breach of trust, negligence, Quistclose trust, dishonest assistance, knowing receipt and monies had and received. In that suit, Bank Pembangunan seeks compensation for 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 present 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.

In light of the interrelated and overlapping issues between the counterclaim in the present suit and the claims in suit 264, the parties agreed and the court directed that the counterclaim herein be tried only after the conclusion and disposal 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 present 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 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 present suit.

On 3.3.2026, Bank Pembangunan appealed against the decision of the High Court in allowing the striking out applications ("appeals"). The appeals were fixed for case management on 2.6.2026. Bank Pembangunan's stay application

On 17.3.2026, Bank Pembangunan filed a notice of application under Enclosure 257 to stay the proceedings herein pending the outcome of the appeals ("stay application"). On 10.4.2026, I dismissed Bank Pembangunan's stay application under Enclosure 257.

On 18.4.2026, Bank Pembangunan filed this amendment application under Enclosure 288. The proposed amendments

Bank Pembangunan's case is this.

The proposed amendments under Enclosure 288 do not alter the character or nature of the existing defence, nor do they introduce a new or inconsistent case. Rather, the proposed amendments are an extension of the existing defence to the issues and allegations raised in the amended counterclaim. Broadly, the proposed amendments relate to the following areas. Paragraph 29 of the amended defence

In the existing amended defence, Bank Pembangunan had denied the alleged conspiracy to sabotage Aries' listing exercise. Bank Pembangunan maintained that it was entitled, upon the occurrence of an event of default, to exercise its contractual rights under the facility. This includes terminating the facility and commencing recovery proceedings against the Aries Defendants.

The proposed amendments in paragraph 29 of the amended defence maintain the same defence. They merely elaborate further that Aries' failure to list was attributable to Aries' own directors and management, and not due to any conduct on the part of Bank Pembangunan. Paragraph 30 of the amended defence

In the existing amended defence, Bank Pembangunan had denied the allegation that it enabled the $ 2^{n d} $ and $ 3^{r d} $ Defendants in the counterclaim to siphon approximately RM 75 million to their associated companies, i.e. the $ 5^{t h} $ and $ 6^{t h} $ Defendants in the counterclaim.

The proposed amendments in paragraph 30 of the amended defence maintain the same position. They merely extend Bank Pembangunan's pleaded case by setting out further particulars relating to the alleged siphoning of the RM 75 million to the $ ^{5^{th}} $ and $ ^{6^{th}} $ Defendants in the counterclaim. Paragraph 32 of the amended defence

In the existing amended defence, Bank Pembangunan had pleaded that it had filed an application to strike out the action commenced by Zavarco Bhd and Zulizman in Kuala Lumpur High Court Civil Suit No. : WA-22 NCC-395-08/2022 ("Zavarco's suit 395").

The proposed amendments in paragraph 32 of the amended defence merely update Bank Pembangunan's existing pleaded position by reflecting the outcome of the striking out application in Zavarco's suit 395.

The Aries Defendants' objection to the amendment application may be summarised as follows:

(a) The proposed amendments introduce an inconsistent case as Bank Pembangunan had maintained that there was no conspiracy or bribery by Bank Pembangunan as alleged in the present suit. Bank Pembangunan also maintained the same position in Zavarco's suit 395.

(b) There was an inordinate delay in filing the amendment application. It is a tactical manoeuvre by Bank Pembangunan to delay the trial of the counterclaim in the present suit; and

(c) Bank Pembangunan is abusing the process of the court by "importing" or "repackaging" the pleadings in suit 264. The Aries Defendants deny that they have enlarged their counterclaim in the present suit to include matters which relate to, and overlap with, the subject matter of suit 264. The law governing amendment of pleadings

In determining applications to amend pleadings, the courts are guided by the following considerations:

(a) Whether the proposed amendments would not, in effect, turn the suit from one character into a suit of another and inconsistent character;

(b) Whether the application was made bona fide;

(c) Whether the prejudice caused, if any, can be compensated by costs; and

(d) Whether there was any delay in the filing of the application and if so, whether there is cogent and reasonable explanation for the delay. (See the Federal Court cases of Yamaha Motor Co. Ltd. v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213; Hong Leong Finance Bhd v Low Thiam Hoe & another appeal [2016] 1 MLJ 301).

The court will normally grant an amendment to pleadings, so long as it will not cause injustice to the other side. (See the High Court case of Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348).

An amendment ought to be allowed for the purposes of determining the real question in controversy between the parties. (See the Supreme Court case of Hock Hua Bank v Leong Yew Chin [1987] 1 MLJ 230).

Bearing in mind the above principles, I decided to allow Bank Pembangunan's amendment application under Enclosure 288. Here is my explanation. The proposed amendments do not alter Bank Pembangunan's amended defence

I am satisfied that the amendment application would not change or alter the character of Bank Pembangunan's amended defence into another and inconsistent character.

In relation to the proposed amendments in paragraph 29 of the amended defence, Bank Pembangunan had already denied the alleged conspiracy to sabotage Aries' listing exercise. Bank Pembangunan maintained that it was entitled to exercise its contractual rights under the facility following the occurrence of an event of default. The proposed amendments merely elaborate further that Aries' failure to list is attributable to Aries' own directors and management, and not due to any conduct on the part of Bank Pembangunan.

Similarly, in relation to the proposed amendments in paragraph 30 of the amended defence, Bank Pembangunan had already denied the allegation that it enabled the siphoning of approximately RM 75 million. The proposed amendments merely provide further particulars regarding the alleged siphoning of the RM 75 million.

In relation to the proposed amendment in paragraph 32 of the amended defence, it is merely an update on Bank Pembangunan's existing pleaded position by setting out the outcome of the striking out application in Zavarco's suit 395.

Premised on the above, it is my finding that :

(a) The proposed amendments arise from the same factual matrix and matters already pleaded in Bank Pembangunan's amended defence. They elaborate and provide further particulars in support of Bank Pembangunan's existing pleaded case.

(b) The proposed amendments are consistent with Bank Pembangunan's amended defence that Aries' failure to list and the siphoning of the RM 75 million were not due to any conduct on the part of Bank Pembangunan.

(c) Accordingly, the proposed amendments do not change the character of Bank Pembangunan's amended defence. The Aries Defendants are not confronted with a new or fundamentally different case to answer.

Moreover, even where an amendment introduces a new line of defence, such amendment ought to be allowed where it arises from substantially the same facts or transaction already pleaded. (See the High Court cases of IFCI Ltd v Bishopgate Capital Ltd & Anor [2023] 12 MLJ 111; Quek Han Tiong v Megat Ajib Abd Hamid & Anor [2015] 1 LNS 511).

The Aries Defendants argue that the proposed amendments introduce an inconsistent character on the basis that Bank Pembangunan had consistently maintained that there was no bribery or corruption in both the present suit and Zavarco's suit 395. This argument is untenable. The proposed amendments do not concern the issue of bribery or corruption. In such circumstances, the Aries Defendants' reliance on alleged inconsistencies concerning bribery and corruption is a red herring and does not address the true nature or effect of the proposed amendments.

Notwithstanding the above, the Aries Defendants' contention that Bank Pembangunan had always maintained there was no bribery or corruption in the present suit is misconceived. At the time Bank Pembangunan obtained the judgment, it had no knowledge of any alleged bribery or corruption in relation to the facility. Accordingly, the issue of bribery and corruption did not arise before the High Court at that stage.

It was only at the Court of Appeal stage that the Aries Defendants sought to introduce allegations of bribery and corruption through news reports as purported triable issues to Bank Pembangunan's recovery claim. Bank Pembangunan's position was that the allegations were irrelevant to the Aries Defendants' pleaded claim. Bank Pembangunan further maintained that, in any event, its claim is a straightforward recovery action for sums due and owing under the facility.

Thereafter, during the Federal Court leave application, the issue of bribery and corruption was again ventilated by the parties. Bank Pembangunan maintained that even if the Federal Court accepts that there was bribery or corruption, it does not render the facility illegal and not repayable.

Further, Bank Pembangunan only discovered around January 2022 that prior to the disbursement of the facility, the $ 2 ^{n d} $ Defendant in the counterclaim had allegedly paid RM 8 million to Bank Pembangunan's former President and Group Managing Director.

Lastly, contrary to the Aries Defendants' contention, Bank Pembangunan did not maintain in Zavarco's suit 395 that there was no bribery or conspiracy. That was not the issue in Zavarco's suit 395.

I am satisfied that the amendment application is bona fide. The proposed amendments are bona fide as they are intended to place before the court matters arising from, and connected to, the overlapping issues and allegations previously contemplated to be addressed in suit 264 prior to the trial of the counterclaim in the present suit.

It is not a tactical manoeuvre by Bank Pembangunan to delay the trial of the counterclaim in the present suit. The amendment application was filed promptly following the dismissal of the stay application. The parties were continuing to take steps to comply with the pre-trial case management directions issued by the court.

In the event the amendment application is allowed, the parties would still be able to proceed with the necessary trial preparations. The trial of the counterclaim in the present suit may proceed as scheduled upon the parties' compliance with the pre-trial case management directions.

As a postscript, the trial of the counterclaim in the present suit (that was scheduled to take place on 15.6.2026 to 19.6.2026 and 13.7.2026 to 16.7.2026) had to be vacated. This was because the parties on 26.5.2026 recorded a consent order at the Court of Appeal for an interim stay under section 44 of the Courts of Judicature Act 1964.

On the issue of delay, Order 20 rule 5 of the Rules of Court 2012 empowers the court to allow amendments to pleadings at any stage of the proceedings. An amendment generally ought to be allowed, even if made at a late stage, if it is necessary to determine the real issues in dispute between the parties, and if any prejudice occasioned to the opposing party can be compensated by costs. In other words, delay alone is not a sufficient ground to refuse leave to amend.

In YB Datuk Dr Soon Choon Teck v YB Datuk Robert Lau Hoi Chew [2009] 3 MLJ 785 at 795-796, the Court of Appeal held: [23] It is a well settled principle that an amendment ought in general be allowed even if it comes late, if it is necessary to do justice between the parties, so long any hardship done thereby can be compensated in money. ... A similar view was [2009] 3 MLJ 785 at 796 expressed by Abdul Malik Ishak J (as he then was) in the case of Ultra Dimension Sdn Bhd v Sepadan Tuah Sdn Bhd; Genesis The AS Agency Sdn Bhd (Third Party) [2000] 6 CLJ 548, where he quoted the passage from the judgment of Brett MR in Clarapede v Commercial Union Association (1883) 32 WR 263, as follows: However negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs. [24] Further, in HSBC Bank Malaysia Bhd v Macquarie Technologies (M) Sdn Bhd, Nik Hashim JCA (as he then was) said, at p 406 (MLJ); p 129 (CLJ) : On the question of delay, it is worthy of note that delay alone is not a ground to refuse an application for leave to amend. In Wright Norma, at p 519 the court held: While the time at which an amendment is made is a relevant consideration it is not necessarily decisive. Delay per se does not equal prejudice or injustice. We do not think any rigid rule can be laid down on this. [26] On the facts and circumstances of the present case and for the grounds aforesaid, in our judgment, the learned judge in disallowing the application for leave to amend not only failed to exercise his discretion judicially but has also misdirected himself in putting too much weight on the issue of delay and limitation while failing to take into account the general principle applicable in such an application."

In ASM Development Sdn Bhd v Hijjas Kasturi Associates Sdn Bhd [2011] 6 MLJ 228, the Court of Appeal held that an application for leave to amend should generally be allowed, however late the application may be, provided that the amendment would not prejudice the opposing party. The Court of Appeal said (at page 233): [14] It should not be refused solely because they have been made necessary by the honest fault or mistake of the party applying for leave to make them. It is not the function of the court to punish parties for mistakes which have been made in the conduct of their cases by deciding otherwise that in accordance with their rights. However blameworthy may have been a party's failure to plead the subject matter of a proposed amendment, and however late the application for leave to make such amendment may have been, the application should, in general, be allowed, provided that allowing it will not prejudice the other party."

The relevant question is whether the proposed amendment would occasion injustice which cannot be compensated by costs. On this aspect, the Aries Defendants would suffer no injustice from the proposed amendments as they are not prevented from responding to the proposed amendments. In any event, any injustice or inconvenience occasioned can adequately be compensated by costs. No prejudice to the Aries Defendants

In exercising its discretion whether to allow an amendment, the court is required to balance the prejudice, if any, to both parties. In Khairy Jamaluddin Abu Bakar v Dato' Seri Anwar Ibrahim [2012] 6 MLJ 551 at 555, the Court of Appeal held: [13] We are of the view the High Court judge had applied the correct principles in exercising his discretion in the manner which he did. Consideration of whether it would be unjust to grant leave to amend required a balancing of the applying party's need to amend, and the prejudice to the opposing party's interest. An application for leave to amend should, in general, be allowed, provided that the application was bona fide and where the purpose of the amendment would result in the true issues to be determined."

The burden lies on the Aries Defendants to demonstrate that they would suffer prejudice or injustice which cannot be compensated by costs, if the amendment application is allowed.

The Court of Appeal in ASM Development (supra) stipulates what would be "prejudicial" in an amendment application as follows: "[13] The principles on which courts exercise its discretion whether to allow or refuse an application to amend are well settled. An amendment would be allowed where the purpose of the amendment would result in the true issues between the parties to be determined. The amendments must not cause injustice to the other party / parties. There is no injustice to the other party if he can be compensated by appropriate orders as to costs ... [15] Whether it would be unjust to grant leave to amend required a balancing of the applying party's need to amend and the prejudice to the opposing party's interest. 'Prejudice' in this context, is whether the defendant in this case will or may have difficulty in defending the claim, specifically at the trial. For any relevant prejudice to be found it must constitute prejudice resulting from the amendment, either in the sense that the defendants, in reliance on the claim originally made, altered their position so as to make it more difficult to defend the new claim now made."

In the present case, the Aries Defendants have failed to demonstrate any real prejudice, much less prejudice which cannot adequately be compensated by an appropriate order as to costs. They have not shown that they had altered their position in reliance on Bank Pembangunan's existing pleadings, or that they would have any difficulty in responding to the proposed amendments at the trial. This is more so when the proposed amendments arise from the same factual matrix already raised in the counterclaim.

The Aries Defendants would have the opportunity to file consequential amendments or an amended reply, if necessary, to respond to Bank Pembangunan's proposed amendments. Any perceived prejudice can therefore be adequately addressed.

In contrast, the prejudice occasioned to Bank Pembangunan if the amendment application is dismissed would be greater. If the amendment application is refused, Bank Pembangunan would effectively be deprived of the opportunity to properly plead and ventilate its case. On the other hand, the Aries Defendants would still have their day in court if the proposed amendments are allowed.

The dismissal of the amendment application would prevent the court from having the full factual matrix and relevant issues placed before it for the proper adjudication of the counterclaim. As a result, the real questions in controversy between the parties may not be fully and effectively determined. No abuse of the process of the court

The Aries Defendants' contention that Bank Pembangunan is abusing the process of the court by "importing" or "repackaging" pleadings from suit 264 into the present proceedings is inconsistent with their own earlier position.

In support of the stay application, Bank Pembangunan had contended that the counterclaim in the present suit and Bank Pembangunan's claims in suit 264 involved interrelated and substantially overlapping issues.

In response thereto, the Aries Defendants themselves took the position that there were overlapping issues between suit 264 and the counterclaim in the present suit. The Aries Defendants had enlarged their counterclaim to include alleged wrongdoing concerning the disbursement of the facility, which substantially overlap with the subject matter of suit 264.

It was because of these overlapping issues that the parties and the court had earlier proceeded on the basis that suit 264 ought to be determined first, before the trial of the counterclaim in the present suit proceeded.

In the circumstances, following the striking out of suit 264 and the dismissal of the stay application, it became necessary for Bank Pembangunan to plead matters arising from those overlapping issues within the present proceedings, to ensure that the real questions in controversy can be properly determined.

Accordingly, the proposed amendments do not amount to an abuse of the process of the court or an attempt to relitigate suit 264. The proposed amendments are connected and relevant to the proper determination of the counterclaim and arise from the same factual matrix already raised by the Aries Defendants themselves.

The proposed amendments do not seek to pursue reliefs arising from suit 264 within the present proceedings. Bank Pembangunan merely seeks to expand upon and particularise its existing defence to the allegations advanced by the Aries Defendants in the counterclaim. Conclusion

For the reasons above, I allowed Bank Pembangunan's amendment application under Enclosure 288. I ordered costs to be in the cause. Dated 29 June 2026 Quay Chew Soon Judge High Court of Malaya, Kuala Lumpur Commercial Division (NCC 2) Counsels Chan Kah Meng, Bryan Goh Tseng Fook and Yeap Xi Jin (Messrs. Lim Kian Leong & Co.) for the Plaintiffs in the counterclaim Kumar Kanagasingam, Chia Oh Sheng, Wong Han Wey and Michelle Louis (Messrs. Lee Hishammuddin Allen & Gledhill) for the 1 $ ^{st} $ Defendant in the counterclaim Pramjit Kaur for the 3rd Defendant in the counterclaim Raiza binti Zakaria for the $ 4^{th} $ Defendant in the counterclaim Case reference

Yamaha Motor Co. Ltd. v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213

Hong Leong Finance Bhd v Low Thiam Hoe & another appeal [2016] 1 MLJ 301

Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348

Hock Hua Bank v Leong Yew Chin [1987] 1 MLJ 230

IFCI Ltd v Bishopgate Capital Ltd & Anor [2023] 12 MLJ 111

Quek Han Tiong v Megat Ajib Abd Hamid & Anor [2015] 1 LNS 511

YB Datuk Dr Soon Choon Teck v YB Datuk Robert Lau Hoi Chew [2009] 3 MLJ 785

ASM Development Sdn Bhd v Hijjas Kasturi Associates Sdn Bhd [2011] 6 MLJ 228

Khairy Jamaluddin Abu Bakar v Dato' Seri Anwar Ibrahim [2012] 6 MLJ 551 Legislation reference

Order 20 rule 5 of the Rules of Court 2012

Section 44 of the Courts of Judicature Act 1964