Cekap Air Sdn. Bhd. v Serba Dinamik Sdn. Bhd (dalam Likuidasi) (WA-28PW-262-06/2023)

The Applicant (referred to as “Cekap” or Applicant where appropriate) applied for a Fortuna Injunction in Enclosure 1 to restrain the Respondent from filing a Winding-Up Petition after the expiry of the Statutory Notice under section 466(1)(a) of the Companies Act 2016 (“CA 2016”) issued by the Respondent.

It is not disputed that the Statutory Notice is not based on any judgment obtained by the Respondent against the Applicant.

The Respondent contends that the basis for its issuance of the Statutory Notice are as follows:

3.1 the documentary evidence shows that the Applicant was/is at all material times aware of the debt owed to the Respondent;

3.2 the Applicant had never disputed the debt until the filing of this

3.3 the Applicant has agreed and/or admitted that the Respondent was/is entitled to backcharge the sum of RM44,028,654.20; and

3.4 the Applicant has even made part payment of the debt. [4] The Applicant, however, disputes the Respondent’s claim in regard to the debt amount allegedly owing by it to the Respondent. The Applicant avers as follows:

The Respondent initially issued a letter of demand to the Applicant attaching payment Certificate No. 10 (Final) dated 09.03.2023 and demanding the sum of RM44,028,654.20 allegedly owing by the Applicant. The Applicant replied by a letter dated 03.042023 denying and disputing the amount allegedly owing.

The Respondent thereafter issued a second letter of demand dated 16.05.2023, demanding a smaller amount of RM38,387,745.70. The Applicant replied on 30.05.2023 denying and disputing the alleged debt.

Following its denial of the second demand, the Applicant via a letter to the Respondent dated 07.06.2023 requested copies of supporting documents to prove the amount claimed by the Respondent. However, the Respondent refused the Applicant’s request for supporting documents. This is disputed by the Respondent. The Respondent alleged it gave the Applicant some documents, but as for the remaining documents, the Respondent alleged those documents ought to be in the Applicant’s possession.

On the same date, the Respondent issued a Statutory Notice under section 466 of the CA 2016.

After receipt of the Statutory Notice, the Applicant requested via a letter dated 14.06.2023 an undertaking from the Respondent not to commence any winding-up proceedings against it.

The Respondent, however, avers that upon receipt of the letter dated 14.06.2023 from the Applicant, the Respondent’s solicitors contacted the Applicant’s solicitors on a “without prejudice basis” to enquire if the Applicant would agree to meet and discuss settlement. However, the Applicant did not respond.

The Applicant filed this application via a Notice of Motion (“NOM”) and served the NOM to the Respondent on the same day. GENERAL PRINCIPLES ON FORTUNA INJUNCTIONS [5] The general principles governing the granting of a Fortuna Injunction are well established and enunciated in the case of Mobikom Sdn Bhd v Inmiss Communication Sdn Bhd (2007) 3 CLJ 295 where the Court of Appeal held as follows: “[4] There is no doubt that a court has jurisdiction and power to grant an anti-suit injunction whenever the interests of justice call for or demand it. So, an injunction may be issued by our courts to restrain the institution or prosecution of a suit in a foreign jurisdiction where this would lead to a multiplicity of proceedings. See, BSNC Leasing Sdn Bhd v Sabah Shipyard Sdn Bhd & Ors [2000] 2 MLJ 70. Similarly, a party may be restrained from presenting a winding up petition if it is found, for example, that there is a bona fide dispute about the debt on which the notice of demand issued under s 218 of the Companies Act 1965 is based. See, Bina Satu Sdn Bhd v Tan Construction [1988] 1 MLJ 533. [6] McGarvie J in the seminal case of Fortuna Holding Pte Ltd v The Deputy Commissioner of Taxation (1978) VR83, said as follows: “When a court restrains the presentation of a winding up petition to that court it exercises part of its inherent jurisdiction to prevent abuse of its process. The law has long recognized that with proceedings to wind up a company, intervention after the commencement of proceedings would often be too late to relieve the company of oppression and damage. The courts have recognized that irreparable damage may be done to a company merely through public knowledge of the presentation of a petition. Usually the damage flows from the loss of commercial reputation which results. The courts have also been conscious of the pressure which may be put on a company, by a person with a disputed claim against it, threatening to present a winding up petition unless, the company meets his claim.” [7] In NKM Development Sdn Bhd v Irex Sdn Bhd (1988) 2 CLJ pg 59 VC George J (as he then was) held as follows: “It therefore seems to me that this petition must fail. A real dispute, turning to a substantial extent on disputed questions of facts, cannot be properly decided on petition. The Companies court must not be used as a debt-collecting agency nor a means of bringing improper pressure to bear on a company. The effects on a company of the presentation of a winding-up petition against it are such that it would be wrong to allow the machinery designed for such petitions to be used as a means of resolving disputes which ought to be settled in ordinary litigations.” [8] In Kumpulan Liziz Sdn Bhd v Pembinaan Azam Jaya (2021) 1 LNS 2043 the Court of Appeal held at paragraph 54 as follows: “[54] Whether or not there is a sum due and owing to the Petitioner would have to be proved based on facts not seriously in dispute and if there are serious disputes on the sum due gleaned from the affidavits filed, then clearly the procedure of a petition to wind up on a disputed debt, in the face of conflicting affidavits then clearly procedure of a petition to wind up on a disputed debt, in the face of conflicting affidavits would not be a suitable procedure to solve the matter and the petition would have to be dismissed as being an abuse of the process of court. [125] It is not for the winding-up court to descend into details of the set-off that the respondent had raised via its affidavit to oppose the petition. …less the petition be converted into a writ action which would not be …to resolution by way of conflict in affidavit.” BACKGROUND FACTS [9]

Konsortium Awanie JV Sdn Bhd (“KAJV”) was awarded a contract by Syarikat Air Terengganu (“SATU”) to design and build 120 MLD conventional and 28 MLD membrane water treatment plants and other related works.

(ii) The Applicant was subsequently awarded a sub-contract by the Respondent, emanating from the contract between KAJV and SATU. The sub-contract, called the Engineering Procurement, Construction and Commissioning Contract for the Design and Build of 28 MLD Membrane Water Treatment Plants, was awarded via a Letter of Award (“LOA”) dated 08.06.2016. (Encl 2 Exhibit C (Phase 1 of the sub-contract). [10] On 13.02.2017, KAJV issued a Letter of Novation (Encl 2 Exhibit D). notifying the Applicant that KAJV shall novate the terms and conditions in the LOA to Serba Dinamik Sdn Bhd, i.e. the Respondent (the “first Novation”). The Applicant avers that the Respondent was a shareholder of KAJV and that the Respondent’s CEO had been appointed as a director of KAJV’ (Encl 17 paragraph 10). [11] A year after the First Novation, the Applicant and the Respondent executed a Sub-Contract Agreement between the Respondent and the Applicant dated 02.07.2018 (the “Cekap-Serba Sub-Contract”). (Encl 2 Exhibit E). [12] Later, via a letter dated 08.06.2021, KAJV issued a letter of Additional Scope of Work (“Novation Order”) to the Applicant for the sum of RM363,142,940.00. On 15.11.2021, KAJV issued a letter to the Applicant stating that there would be more work, and that the sum would increase by RM12,720.00, making the total contract amount RM375,862.00. [13] A Notice of Assignment for Payment dated 10.02.2022 (“Notice of Assignment for Payment”) was only received by the Applicant on 13.07.2022 (Encl 15 Exhibit VS-7). [14] The Novation Agreement was executed without Appendix 1. It is reiterated that Phase 1 refers to work done by Cekap with KAJV pursuant to the LOA dated 08.06.2016, and that Phase 2 refers to work done by Cekap with Serba Dinamik pursuant to the Cekap-Serba Sub-Contract dated 02.07.2018. [15] The invoices and payments under Phase 1 are tabulated in paragraph 11 of Encl 25. All invoices and payments made are tabulated and explained in paragraphs 10 to 29 of Enclosure 25. [16] The Applicant submits that there are substantial discrepancies in regard to the value of work and uncertainty as to who is liable to pay. This can be clearly gleaned from paragraphs 34 to 43 of Enclosure 25. [17] The essence of the dispute can be seen in paragraph 43 of Enclosure 25, where the Applicant submits as follows: [43] …the said Notice of Assignment for Payment is also wrong in law. In a nutshell, KAJV wrongfully issued the said Notice of Assignment Payment, designed to assign payments already made to Cekap, to be channeled Serba. We humbly submit that KJAV is basically saying that the RM166,750,107.39 paid earlier to Cekap, is from the date of the assignment, for Serba. This is wrong in law as Assignment of Payment do not have retrospective effect. KAJV can only assign payment to be made after the notice and not before.” [18] The Applicant submits that there are two versions of the Novation Agreement (the “First Novation” and the “Second Novation”). [19] The First Novation is at Enclosure 2 Exhibit F. The First version is an eight-page document that ends with the signing page. This Novation Agreement was executed on behalf of Cekap by Yong Chee Hon, as the director of Cekap. There was no appendix to the Novation Agreement. [20] The Second Novation, is at Enclosure 15 Exhibit Vs-9. A notable difference between the First Novation and the Second Novation is that the Second Novation has an appendix attached. [21] The Second Novation is disputed. In his affidavit in Enclosure 17 at paragraph 74, Yong Chee Hon avers: “74. Perenggan 30 Afidavit Jawapan Responden adalah dirujuk dan dinafikan sekeras-kerasnya. Saya menegaskan bahawa saya tidak pernah diserahkan dan/atau ditunjukkan Appendix 1 semasa menandatangani Novation Agreement tersebut. Saya juga menegaskan bahawa saya tidak pernah menandatangani Final Account yang kononnya berada di Appendix 1.” SUBMISSION BY THE RESPONDENT [22] The Respondent submits that the Applicant’s allegation that it never agreed to the Final Account is an afterthought because the Applicant failed to produce any documents to show that it objected to the Final Account at the material time. [23] On the allegation that the First Novation did not contain Appendix 1, which is the Final Accounts, the Respondent’s reply is a mere general statement, stating that the Applicant has failed to show evidence that when Yong Chee Hon signed the Novation Agreement, it did not contain the Final Account in Appendix 1. FINDINGS BY THIS COURT [24] Having reviewed the calculations of the payments allegedly made and disputed, it is clear that this Court would be required to delve deep into the various complex and convoluted payment schedules between the two phases of the sub-contract to determine inter-alia whether there is double claim by the Respondent, i.e., whether the Notice of Assignment purported to assign payment already made to the Applicant was channeled to the Respondent. If true that the Notice of Assignment for the sum of RM166,750,107.39 is deemed to have retrospective effect, it would be void in law. [25] Another clear area of dispute is the existence of two Novation Agreements. See details of the dispute at paragraphs 51 to 58 of Enclosure 25. [26] Therefore, I find that there are substantial areas of dispute, which are best settled in a Civil Court where viva voce evidence can be given and witnesses can be subjected to cross-examination by counsels. [27] This is not a suitable case in which the Respondent can just file a petition to wind up the Applicant based on a “debt” which is substantially disputed. Thus, the balance of convenience lies with the Applicant, which will be subjected to dire consequences if the Respondent is allowed to file a petition, which will adversely affect the Applicant’s business reputation and even trigger defaults in the Applicant’s financing agreements with its lenders. [28] For the reasons above, I allow the application for a Fortuna Injunction with costs. Dated 10 March 2025 ……………t.t………………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE APPLICANT: NUR AFIQAH BINTI MOHD ASHRIEE WITH AIZUL ROHAN ANUAR SOLICITORS FOR THE APPLICANT: TETUAN SAIFUL, ROGER & CO COUNSEL FOR THE RESPONDENT: IZHAM PANDAK MUHAMAD ROHAN ARASU WITH AMY HIEW KAR YI SOLICITORS FOR THE RESPONDENT: TETUAN HAROLD & LAM PARTNERSHIP Cases Referred to: ➢ Mobikom Sdn Bhd v Inmiss Communication Sdn Bhd (2007) 3 CLJ 295 ➢ Fortuna Holding Pte Ltd v The Deputy Commissioner of Taxation

VR83 ➢ NKM Development Sdn Bhd v Irex Sdn Bhd (1988) 2 CLJ pg 59 ➢ Liziz Sdn Bhd v Pembinaan Azam Jaya, (2021) 1 LNS 2043 Legislation Referred to: ➢ Companies Act 2016 Decision date: 03 October 2023