Best Eternity Recycle Technology Sdn Bhd v Pembinaan Purcon Sdn Bhd (BA-24NCC-58-05/2026)

Plaintiff filed this Originating Summons (“OS”) to restrain the defendant from presenting, advertising gazetting and/or prosecuting a winding up petition based on a notice issued under section 465(1)(e) of the Companies Act 2016 (“section 465 notice”) pending disposal of a writ filed at the Shah Alam High Court.

A Notice of Application was also filed together with the Originating Summons (“OS”) for an injunction to restrain the defendant from presenting a winding up petition based on the section 465 notice pending disposal of the OS.

Plaintiff had awarded two (2) distinct construction projects to the defendant through two (2) Letters of Award and two (2) Construction Contracts for a contract sum amounting to RM43.5 million and RM6.4 million respectively.

The plaintiff alleged that the defendant had not completed its works under the contract and thus breached its obligations. It was also alleged that the defendant had abandoned the project site. Dispute arose between the plaintiff and defendant.

The plaintiff states that it engaged third party contractors to take over and complete the works originally assigned to the defendant.

The defendant meanwhile commenced proceedings under section 5 CIPAA for outstanding sum of RM7.4 million allegedly due and owing by the plaintiff.

The adjudication decision was delivered on 23rd February 2026 whereby the learned adjudicator allowed the defendant’s claim. Dissatisfied with the adjudicator’s decision, the plaintiff filed an application on 27th March 2026 to set aside the adjudication decision besides filing an application to stay the enforcement of the adjudication decision.

The defendant, on 23rd April 2026, issued to the plaintiff a notice pursuant to section 465 (1)(e) and 466(1)(a) and (2) of the Companies Act 2016 (“section 465 notice”) to wind up the plaintiff company on grounds that the company was unable to pay its debts.

The plaintiff, on the other hand, commenced civil action at the Shah Alam High Court against the defendants seeking damages in the sum of RM3.4 million as costs, losses and expenses incurred in engaging third party contractors to complete/rectify the works as a consequence of the defendant’s breach of contract. Plaintiff is also seeking for LAD in the sum of RM8.15 million for the defendant’s alleged failure to complete the works within the completion period (“Plaintiff’s Writ Action”) Chronology of events

For context, the chronology of events in this case beginning from the time the OS was filed are as follows:

(a)

7.05.2026 - Plaintiff filed an Originating Summons (“OS”) essentially to restrain the defendant from filing a winding up petition based on the section 465 notice pending disposal of the Plaintiff’s Writ Action. At the same time, plaintiff also filed a Notice of Application (“NOA”) seeking for an injunction to restrain the defendant from filing a winding up petition based on the section 465 notice against the plaintiff pending disposal of the OS.

(b)

8.05.2026 – Case came up for e-review before the Senior Assistant Registrar (“SAR”). SAR fixed the NOA for hearing before judge on 12.05.2026.

(c)

12.05.2026 - Learned counsel for the plaintiff applied for both the OS and the NOA to be heard together, which was agreed by learned counsel for the defendant. Both counsels also agreed that they respectively would file one affidavit for both the OS and NOA. The court then gave directions and fixed dates for parties to file their respective affidavits as well as written submissions. Both the OS and NOA was fixed to be heard together on 22.7.2026.

Learned counsel for the plaintiff also applied for an ad interim injunction as prayed for in the NOA pending disposal of the OS and NOA. The defendant’s learned counsel objected to the application for ad interim injunction.

In order to preserve the status quo of the parties pending hearing and disposal of the OS and NOA fixed for hearing on 22.7.2026, I allowed the ad interim injunction and these are my reasons. Ad interim injunction

It is trite that the overriding consideration on whether or not to grant an ad interim injunction is the preservation of the status quo pending disposal of the main interlocutory application. The threshold for granting an ad interim injunction is low as it is aimed primarily to maintain the status quo. It is issued at the discretion of the court.

In Pentamaster Instrumentation Sdn Bhd v QAV Technologies Sdn Bhd & Ors [2016] MLJU 1494, Wong Kian Kheong J (as he then was) held that, as a general rule, an ad interim injunction should be granted to preserve the status quo pending disposal of the interlocutory injunction application. The exceptions to this general rule would be where the status quo need not be preserved by an ad interim injunction or when irreparable harm may be caused to the defendant by the grant of an Ad Interim order. His Lordship held as follows: “[22] Based on Petrodor Operating and RIH Services, as a general rule - an Ad Interim Injunction should be granted to preserve the status quo pending the disposal of the interlocutory injunction application (General Rule). The General Rule ensures an expeditious disposal of an inter partes interlocutory injunction application whereby parties can proceed to the hearing of the inter partes application on its merits without being delayed by a protracted hearing of whether the Court should grant or not an Ad Interim Injunction. [23] I am of the view that there are at least 2 exceptions to the General Rule whereby the Court may not grant an Ad Interim Injunction, namely-

When the status quo need not be preserved by an Ad Interim Injunction - Petrodor Operating and RIH Services; or

when irreparable harm may be caused to the defendant by the grant of an Ad Interim Injunction.”

Further in Tan Sri Dato’ Kam Woon Wah v. Dato’ Sri Andrew Kam Tai Yeow & Anor [2022] MLJU 424, the High Court held that an ad interim injunction is formulated to maintain the status quo of the parties pending disposal of the inter partes application. [13] Ad-Interim Injunction is formulated to maintain the status quo of litigating parties pending the disposal of an existing inter partes application between them. It is not an extension of the ex parte injunction, which lapses after the expiry of the 21 days. It is a fresh order that the judge decides by considering whether there is a need to maintain the status quo and the threshold in granting an ad interim injunction is low; it is aimed at preserving the status quo and the Court should not be required to consider the question of balance of convenience, which would be dealt with at the inter-partes stage. It is discretionary and may be allowed even if the parties do not consent to it being granted. Therefore, in the interest of smooth and expeditious administration of justice, parties should expeditiously move for the hearing of the inter-partes injunction on its merits (See: Petrodar Operating Co Ltd v Nam Fatt Corporation Berhad (In Liquidation) & Anor (and Another Appeal) [2014] 1 AMR 401; [2014] 6 MLJ 189 at para [25]; [2014] 1 CLJ 18, FC).”

In this case, I am satisfied that there exists sufficient urgency justifying the grant of an ad interim injunction. There appears be a real possibility that the defendant would proceed to file a winding up petition against the plaintiff before the hearing of the OS and NOA fixed on 22.7.2026. The filing of a winding up petition could result in irreversible harm and irreparable damage to the plaintiff.

The mere presentation and advertisement of a winding up petition against a company may adversely affect the company’s credit worthiness, banking arrangements, goodwill, commercial reputation and ongoing business operations. Such prejudice may not be adequately compensable by an award of damages.

I also considered that the interim relief sought is temporary and preservatory in nature, intended only to maintain the status quo pending the inter partes hearing fixed on 22.7.2026. Since the ad interim order is limited in duration and shall remain operative only until the hearing and disposal of the OS and NOA, I found any prejudice to the defendant was minimal.

In the circumstances, I found the balance of convenience lies in favour of preserving the position of the parties pending disposal of the substantive injunction application so to avoid the substantive application being rendered nugatory. Besides, the plaintiff’s undertaking as to damages was also taken into account. Moreover, the defendant did not demonstrate how it would suffer irreparable harm if the ad interim order was granted.

For the reasons stated above, the plaintiff’s application for an ad interim injunction restraining the defendant from presenting, advertising, gazetting and/or prosecuting a winding up petition pending disposal of the OS and NOA fixed for hearing on 22.7.2026 was allowed. Dated 18 June 2026 sgd DONALD JOSEPH FRANKLIN JUDICIAL COMMISSIONER HIGH COURT MALAYA AT SHAH ALAM For the Plaintiff: Gobinath a/l Karuppan & Kee