CIMB Islamic Bank Berhad v 1. Wellcom Communications (NS) Sdn Bhd (22M-254-06/2018)

WELLCOM COMMUNICATIONS (NS) SDN BHD

DATO’ VIJAYAKUMAR A/L RATNAVELU

MD. ISA BIN SALIM

JAMALUDIN BIN AHMAD

RANGKAIAN MINANG (NS) SDN BHD (COMPANY NO: 679292-U) … DEFENDANTS BEFORE YA KHADIJAH BINTI IDRIS JUDICIAL COMMISSIONER 2 GROUNDS OF JUDGMENT Introduction [1] The Plaintiff, an Islamic financial institution filed this writ action against the 1st to the 5th Defendants for monies due and owing pursuant to Islamic banking financing facilities granted to the 1st Defendant. The 2nd to the 4th Defendants are the directors of the 1st Defendant and stood guarantor for the financing facilities obtained by the 1st Defendant from the Plaintiff. Whereas the 5th Defendant executed debentures and assignment in consideration of the Plaintiff granting financing facilities to the 1st Defendant. [2] Via Notice of Application dated 9 July 2018 (hereinafter referred to as “the Summary Judgment Application”) the Plaintiff applied for summary judgment to be entered against the 2nd to the 4th Defendants. This court allowed the said application and judgment was accordingly entered against the 2nd to the 4th Defendants. Aggrieved by the said decision the 2nd to the 4th Defendants appealed. Below are the grounds for the summary judgment entered against the said Defendants. 3 Background [3] At the request of the Defendants, the Plaintiff agree to extend, avail and restructure the various Islamic banking financing facilities to the 1st Defendant –

the Term Financing-i 1 (hereinafter referred to as “TF-i 1”) of RM 70,000,000.00; and

the Term Financing-i 2 (hereinafter referred to as “TF-i 2”) of RM 71,580,000.00. (TF-i 1 and TF-i 2 are hereinafter referred to as “the Financings”). The agreement is contained in and / or evidenced by the General Facility Agreement dated 27 May 2011 and the Supplemental General Facility Agreement dated 30 December 2015 executed between the Plaintiff and the 1st Defendant and the various Letters of Offer / Supplemental Letters of Offer including that dated 09 March 2011, 13 December 2013, 22 August 2014, 14 September 2015, 26 October 2015 and 23 February 2016 made between the Plaintiff and the 1st Defendant (hereinafter referred to as “the Agreement”). 4 [4] The salient terms and conditions of the Agreement are, inter alia, as follows –

the 1st Defendant shall promptly and punctually pay the Plaintiff the Sale Price in the manner prescribed in the Agreement and sums of monies covenanted to be paid under the Agreement including all profit, commissions, fees and other charges as provided for in the Agreement;

in the event of default of payment of any monies covenanted to be paid under the Agreement on its due date or upon expiry or termination of the Financings, the 1st Defendant shall pay the Plaintiff ta’widh (compensation) at the rates stipulated in the Agreement for the periods set out therein;

upon the occurrence of any event of default stipulated in the Agreement the Plaintiff may terminate the Financings and seek payment of all sums due under the Financings including the Sale Price together with all profit, commissions, ta’widh (compensation), payable by the 1st Defendant on the Financings as immediately due and repayable and the Plaintiff shall be at liberty to forthwith take any action against 5 the 1st Defendant or any of its security parties whether concurrently or otherwise at the Plaintiff’s absolute discretion;

the 1st Defendant shall indemnify the Plaintiff against all and every loss, damage and expenses incurred by the Plaintiff in consequence of any default by the 1st Defendant; and

in any proceedings, a statement by the Plaintiff as to any amount due under the Financings as certified by an authorized officer shall be final and conclusive evidence that such amount is in fact due and payable. [5] In consideration of the Plaintiff inter alia agreeing to grant, extend, avail and restructure any Financings the 2nd to the 4th Defendants (who are directors of the 1st Defendant company) vide the Guarantee and Indemnity dated 12 May 2011 (hereafter referred to as “the Guarantee and Indemnity”), did jointly and severally guarantee and agree unconditionally and irrevocably to pay on demand the aggregate indebtedness including all costs, charges and expenses including legal costs on a solicitor client basis. 6 [6] The salient terms and conditions of the Guarantee are, inter alia, as follows –

the Guarantee and Indemnity shall be a continuing securities and the 2nd to the 4th Defendants shall not be affected, released or exonerated by inter alia any variation or increase of the Financings availed to the 1st Defendant and any variation, exchange, renewal, release, modification or variation of the terms of the Financings or any securities;

any admission or acknowledgement in writing by the 1st Defendant or any certificate in writing by an officer of the Plaintiff of the amounts outstanding by the 1st Defendant shall be conclusive against the 2nd to the 4th Defendants of the amount of the Defendants’ indebtedness under the

the 2nd to the 4th Defendants appoint the 1st Defendant as their agent for service of any demand, notice, writ of summons, judgment or other legal process and authorize the 1st Defendant to accept such service; and 7

that as between the Plaintiff and the 2nd to the 4th Defendants, the 2nd to the 4th Defendants shall be principal debtor for the sums guaranteed. [7] Further, in consideration of the Plaintiff inter alia agreeing to grant, extend, avail and restructure any Financings to the 1st Defendant, the 5th Defendant by the Debenture (Third Party), Specific Debenture (Third Party) and Third Party Assignment of License Fee (as amended by the Supplemental Third Party Assignment of License Fee dated 24 February 2015) all dated 21 November 2011, did inter alia covenant to pay all sums of monies and liabilities due and payable under the said Financings by the 1st Defendant. In addition, for purpose of securing the due and punctual payment of such monies and due performance by the 1st Defendant of all obligations in relation thereto the 5th Defendant also created first fixed and floating charges over such assets and properties identified in the Debentures and further assigned absolutely to the Plaintiff the license fees identified in the Assignment / Supplemental Assignment of License Fee. [8] The 1st Defendant breached the terms and conditions of the Agreement and despite the Plaintiff’s reminder letters including the letters dated 18 September 2017, 3 October 2017, 19 October 2017, 14 8 November 2017 and 29 November 2017 and the Plaintiff’s solicitors letter of demand dated 26 January 2018, the 1st Defendant failed, neglected and/or refused to fully pay the arrears sums falling due and payable on the Financings and / or address the adverse variances recorded on the testing(s) conducted. [9] Vide letters including dated 22 July 2016 and 18 October 2016 the Plaintiff inform the 1st and 5th Defendants that the variance of the actual license proceeds assigned to the Plaintiff against the projections in PricewaterhouseCoopers Advisory Services Sdn Bhd’s (hereinafter referred to as “PwCAS”) Review of Cashflow Projections Report dated 1 June 2015 was more than 35%. The 1st and 5th Defendants failed and / or neglected to rectify the variance and also breached the Irrevocable Letter of Undertaking dated 30 December 2015 provided by the 1st and 5th Defendants for failing to confirm the appointment of PwCAS to review the said adverse variances (despite the Plaintiff’s reminder letters including the letters dated 16 May 2017, 3 July 2017 and 1 August 2017). [10] Vide its solicitors’ letter of recall and demand dated 30 April 2018 (hereinafter referred to as “the Demand”) the Plaintiff demanded the Defendants to pay the entire sums due and payable under the 9 Financings being a sum of RM 130,261,040.63 as at 30 April 2018 (hereinafter to as “the Indebtedness Sum”) together with all continuing compensation (ta’widh) as particularised below – Outstanding Sale Price as at 30 April 2018 RM 64,440,525.45 Ta’widh (Compensation) as at 30 April 2018 RM 3,397.26 Total Outstanding as at 30 April 2018 RM 64,443,922.71 Outstanding Sale Price as at 30.04.2018 RM 65,814,292.22 Ta’widh (Compensation) as at 30.04.2018 RM 2,825.70 Total Outstanding as at 30.04.2018 RM 65,817,117.92 [11] Pursuant to the terms and conditions of the Guarantee and Indemnity, the Plaintiff through its solicitors, did by letter of demand dated 30 April 2018 (hereinafter referred to as “the Guarantee Demand”) demanded that the 2nd to the 4th Defendants pay, within fourteen [14] days from the date of the aforesaid letter, the Indebtedness Sum as guaranteed by the 2nd to the 4th Defendants. 10 [12] Pursuant to the terms and conditions of the Debenture, Specific Debenture and Assignment / Supplemental Assignment of License Fee, through a letter dated 30 April 2018 the Plaintiff demanded that the 5th Defendant make payment of the sums particularised in paragraph 10 above within 14 days from the date of the aforesaid letter. [13] In breach of the terms and conditions of the Agreement, Guarantee, the said Debenture, Specific Debenture and Assignment / Supplemental Assignment of License Fee, the Defendants failed, neglected and / or refused to make any payment of the Indebtedness. Instead, the said sums continue to be due and payable on the Financings together with all further compensation (ta’widh), costs, charges and expenses. [14] Apart from the Debenture, Specific Debenture and Assignment / Supplemental Assignment of License Fee provided by the 5th Defendant), the Plaintiff was provided and continues to hold Specific Debenture, Charge(s) over Designated Account(s), Irrevocable and Unconditional Letter(s) of Undertaking and Authorisation. [15] Pursuant to the Specific and General Debenture(s) the Plaintiff appointed Mok Chew Yin and Ong Hock An as joint and several 11 Receivers and Managers (hereinafter referred to as “the R & M”) over the 1st and 5th Defendants on 6 June 2018. By an ex-parte order of court dated 8 June 2018 (hereinafter referred to as “the Ex-Parte Injunction”) entered in the Kuala Lumpur High Court Suit No. WA-22NCC-214-06/2018, the Plaintiff and / or any Receiver(s) and Manager(s) has inter alia been restrained from entering the premises of the 1st and 5th Defendants and / or selling, transferring or dealing with the said 1st and 5th Defendants’ assets and properties. On 2 July 2018, the Ex-Parte Injunction was set aside and the 1st and 5th Defendants’ injunction application on an inter parties basis was dismissed with costs. [16] Thereafter on 3 July 2018 the 1st and 5th Defendants filed an originating summons in the Kuala Lumpur High Court OS No. WA-28JM-1-07/2018 seeking that the 1st and 5th Defendants be placed under judicial management and that one Augustine a/l T.K. James be appointed as judicial manager of the 1st and 5th Defendants (hereinafter referred to as “the Judicial Management Application”). The Judicial Management Application was dismissed on 6 August 2018 (“Dismissal Order”) and the 1st and 5th Defendants lodged an appeal to the Court of Appeal against the Dismissal Order and filed an application for stay of execution of the Dismissal Order. 12 [17] On 30 August 2018 the High Court allowed conditional stay (hereinafter referred to as “the Stay Order”) of the Dismissal Order and by reason of the same, the R & M continue to remain unable to act and the Plaintiff is not in a position to proceed against the 1st and 5th Defendants. Thus the Summary Judgment Application is only in respect of the 2nd to the 4th Defendants. [18] The proceeds received from time to time under the Assignment(s) and Charge(s) and paid into the 1st Defendant’s Escrow Account-i Account No. 86-0011334-4 (hereinafter referred to as “Escrow Account-i”) are utilized from time to time towards settlement of the sums due and payable under the Financings pursuant to the terms of such documents. [19] The Indebtedness Sum (aggregate sum RM 130,261,040.63) represent the sums due and payable as at 30 April 2018 on the Financings. In this respect, the sum of RM 128,682,734.24 remains outstanding as at 29 August 2018 on the Financings together with all continuing compensation (ta’widh), costs and charges after taking into account the payments received since 30 April 2018 from the 1st Defendant’s Escrow Account-i, the particulars as follows – 13 Total amount due and payable as at 30.04.2018 RM 64,443,922.71 Less: Partial payment received via the 1st Defendant’s Escrow Account-I from 1.5.2018 – 29.8.2018 (RM 629,465.09) Add: Compensation (ta’widh) for late payment on the outstanding balance at the rate of up to 1% per annum or any other rates approved by Bank Negara Malaysia (“BNM”) as applicable from 01.05.2018 – 29.8.2018 RM 21,208.96 Total amount due and payable as at 29.8.2018 RM 63,835,666.58 Total amount due and payable as at 30.04.2018 RM 65,817,117.92 Less: Partial payment received via the 1st Defendant’s Escrow Account-I from 1.5.2018 – 29.8.2018 (RM 990,160.84) Add: Compensation (ta’widh) for late payment on the outstanding balance at the rate of up to 1% per annum or any other rates approved by Bank Negara Malaysia (“BNM”) as applicable from 01.05.2018 – 29.8.2018 RM 20,110.58 Total amount due and payable as at 29.8.2018 RM 64,847,067.66 14 Summary Judgment Application [20] Via the Summary Judgment Application, the Plaintiff applied for judgment to be entered against the 2nd to the 4th Defendants in the following terms –

that the 2nd to the 4th Defendants jointly and severally pay to the Plaintiff

the sum RM 64,443,922.71 due and payable as at 30 April 2018 on the 1st Defendant’s TF-i 1;

(ii) compensation (ta’widh) for late payment on the outstanding balance (being the principal sum of RM 29,962,177.36 plus accrued profit earned of RM 1,291,384.92 as at 30 April 2018) will continue at the rate of up to 1% per annum or any other rates approved by Bank Negara Malaysia (“BNM”) as applicable from 1 May 2018 until the date of Judgment and/or maturity of the Financings on 1 October 2022 (whichever is the earlier) and thereafter at the applicable rate provided the same is lower than 15 the prevailing daily overnight Islamic Money Market

Rate until the date of full and final realization or any other method of calculation approved by the Syariah Advisory Council of BNM;

(iii) the sum RM 65,817,117.92 due and payable as at 30 April 2018 on the 1st Defendant’s TF-i 2;

(iv) compensation (ta’widh) for late payment on the outstanding balance (being the principal sum of RM 31,378,49.54 plus accrued profit earned of RM 1,341,895.63 as at 30 April 2018) will continue at the rate of up to 1% per annum or any other rates approved by Bank Negara Malaysia (“BNM”) as applicable from 1 May 2018 until the date of Judgment and/or maturity of the Financings on 1 October 2022 (whichever is the earlier) and thereafter at the applicable rate provided the same is lower than the prevailing daily overnight Islamic Money Market (IIMM) Rate until the date of full and final realization or any other method of calculation approved by the Syariah Advisory Council of BNM; 16

the costs of this action on a solicitor client basis; and

(vi) such further order which this court deems fit and necessary. Plaintiff’s contentions [21] Via its attorney who is duly authorized to affirm the affidavit in support of the Summary Judgment Application, the Plaintiff avers that –

the Defendants were justly and truly indebted to the Plaintiff for the RM 128,682,734.24 under the Financings which remains outstanding as at 29 August 2018. The Certificate of Indebtedness certifying the said outstanding sum is produced as Exhibit CIBB-18 to enclosure 10;

via the Agreement, the Plaintiff made the Financings (TF-i 1 and TF-i 2) available to the 1st Defendant and the 1st Defendant did avail itself of the Financings;

that the terms and conditions of the Agreement are as stated in paragraph 4 above; 17

in breach of the Agreements, the 1st Defendant failed to promptly and fully pay the Indebtedness. Via the Letter of Recall and Demand to the 1st Defendant, the Plaintiff recalled and terminated the Financings and demanded the Indebtedness Sum due under the Financings together with all compensation as particularized;

via the Guarantee and Indemnity, the 2nd to the 4th Defendants has agree to jointly and severally guarantee and unconditionally and irrevocably to pay on demand the indebtedness (see Exhibit CIBB-5 to enclosure 6);

that the terms and conditions of the Guarantee and Indemnity are as stated in paragraph 6 above;

via the Guarantee Demand (see Exhibit CIBB-6 to enclosure 6), the Plaintiff demanded that the 2nd to the 4th Defendants pay the Indebtedness under the Guarantee and Indemnity. As the 2nd to the 4th Defendants failed to pay the Indebtedness Sum, the said sum continue to be due and payable together with, inter alia, charges and expenses; and 18

(h)

the Commodity Murabahah Contract is null and void as it is in contravention of the Bank Negara Malaysia’s policy documents. The contravention is as follows: 19

no Murabahah Contract was executed;

(ii) the Sale Price and Purchase Price was not mentioned in any part of the Murabahah Contract.

the Supplemental General Facility Agreement dated 30 December 2015 is illegal as it contravenes section 24 of the Contracts Act 1950 as there is no Murabahah Contract;

the amount claimed by the Plaintiff is wrong. It is the 2nd to the 4th Defendants’ argument that since the Supplemental General Facility Agreement superseded the General Facility Agreement, the event of default clause in the General Facility Agreement had been replaced by the Supplemental General Facility Agreement. As such the Plaintiff is only entitled to claim from the 1st Defendant the amount of the Purchase Price left unpaid and any Profit portion to be charged shall only be charged on the Purchase Price. As at the date of filing of this application the Purchase Price unpaid is RM 29,962,177.36 for TF-i 1 and RM 31,378,490.54 for TF-i 2, the Plaintiff is only entitled to claim the aggregate sum of RM 61,340,667.90 and not RM 130,261,040.63 as stated in their Summary Judgement Application. The Plaintiff’s 20 claim is therefore made in bad faith and is seeking to claim an amount larger than that they are entitled to;

the irregular administration of the 1st Defendant’s Escrow Account-i by the Plaintiff has resulted in failure towards payment of the TF-i 1 and TF-i 2 and the Term Loan provided by the Plaintiff; and

the Plaintiff’s action against the Defendants is premature. This is because the payments of all the loans due to the Plaintiff are the subject matter of the Judicial Management Application. Via the said application the 1st and 5th Defendants sought to sell part of the 1st and 5th Defendants assets to satisfy the amount due to be paid into the Escrow Accounts-i. The valuation of the assets has shown figures that are sufficient to defray all amounts owed to the Plaintiff. The Court of Appeal had stayed the execution of the Dismissal Order. It is submitted by the 1st to the 4th Defendants if their appeal is allowed by the Court of Appeal and the Judicial Manager successfully sell part of the assets of the 1st and 5th Defendants as proposed, all payments in satisfaction of the monies due and owing to the Plaintiff will 21 be fully paid. Thus this instant action at the very least should be stayed pending the disposal of the Judicial Management appeal. The law [23] Pursuant to Order 14 rules 1 and 2 of the RoC 2012, in an application for summary judgment, it is incumbent on the party seeking the same to prove the following –

the statement of claim has been served on the defendant;

the defendant has entered appearance; and

the applicant has affirmed an affidavit verifying the facts on which the statement of claim is based. The applicant is also required to affirm his belief that the defendant has no defence to the statement of claim. [24] Upon the fulfilment of the above preliminary requirements the burden is on the defendant to prove under Order 14 rules 3 and 4 of the RoC 2012 that there is an issue or question in dispute which ought to be tried (National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283; Cempaka Finance Bhd v. Ho Lai Ying & Anor 22 [2006] 3 CLJ 544). An application for summary judgement may also be dismissed by the court if the defendant satisfies the court that there ought for some other reason to be a trial namely there are circumstances that ought to be investigated by the court (United Merchant Finance Bhd v. Majlis Agama Islam Negeri Johor [1999] 2 CLJ 151; [1999] 1 MLJ 657). [25] In this respect it is apt to be reminded of the principles laid in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at page 408 – In our view, basic to the application of all those legal propositions, is the requirement under O 14 for the court to be satisfied on affidavit evidence that the defence has not only raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the facts or the law arising from each case as disclosed in the affidavit evidence before the court. Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement 23 that a complete defence need not be shown. The defence set up need only show that there is a triable issue. Findings of the court [26] With regard to the preliminary requirements, it is not disputed that the Plaintiff has fulfilled the said requirements. Thus the burden shifts on the Defendant to prove that there are issue or question in dispute which ought to be tried or there ought for some other reason to be a trial, namely, there are circumstances that ought to be investigated by the court. As stated above the Defendant need not raise a complete defence, suffice for the Defendant to show there is a triable issue or question. In South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 it was held if a defendant in an Order 14 application succeeds in raising even a single triable issue, it will not be a fit and proper case to enter summary judgment. Whether the Commodity Murabahah Contract null and void because no Commodity Murabahah Contract was executed and that the Purchase Price and Sell Price are not known [27] It is provided in the Supplemental General Facility Agreement (see Exhibit CIBB-1 to enclosure 6) that the financing concept of the TR-i 1 24 and TR-i 2 is based on the Shariah concept of commodity murabahah. Items 1 and 2 of Schedule 2 of the said agreement provides for the mode of financing where it involves the following arrangement between the Plaintiff and the 1st Defendant as the customer –

that the 1st Defendant will issue a binding and irrevocable Purchase Requisition as set out in Part A of the said Schedule where the 1st Defendant requests and undertakes to purchase the commodity from the Plaintiff at the Plaintiff’s Sale Price upon the Plaintiff having purchased the commodity from a commodity broker;

the Plaintiff and the 1st Defendant will mutually appoint an agent, either a third party or the Plaintiff itself, to conclude the purchase of the commodity from the Plaintiff by entering into a Murabahah sale contract with the Plaintiff as the seller. For this purpose the 1st Defendant will execute and deliver to the Plaintiff a letter of agency;

upon receiving the Purchase Requisition the Plaintiff will purchase the commodity from the Commodity Broker at the Bank’s Purchase Price; 25

(d)

the Bank Purchase Price and the Bank’s Sale Price will be stated in the Murabahah Sale Contract. The Plaintiff’s Sale Price shall be the aggregate of the Plaintiff’s Purchase Price and the profit. [28] Pursuant to the above arrangement, the following documentation were executed –

In relation to TF-i 1 –

the 2nd Defendant issued, on behalf of the 1st Defendant, a Purchase Requisition Notice dated 25 February 2016 to the Plaintiff on TFi-1 (see Exhibit CIBB-20 (page 21 – 22) to enclosure 21). Via the said notice the 1st Defendant requested and undertook to purchase from the Plaintiff, 26 the Commodity being crude palm oil, at the Plaintiff’s Sale

(ii) Letter of Agency dated 25 February 2016 from the 1st Defendant to the Plaintiff on TF-i 1 (see Exhibit CIBB-20 (page 23) to enclosure 21); and

(iii) Murabahah Sale Contract dated 29 February 2016 (see Exhibit CIBB-20 (page 24 - 26) to enclosure 21) entered between the Plaintiff and the 1st Defendant on TFi-1 where it is stipulated that the Plaintiff’s Purchase Price is RM 37,735,543.76 and the Plaintiff’s Sale Price is RM 69,659,813.78.

In relation to TF-i 2 –

Purchase Requisition Notice dated 25 February 2016 from the 1st Defendant to the Plaintiff on TFi-2 (see Exhibit CIBB-20 (page 27 – 28) to enclosure 21). Via the said notice the 1st Defendant requested and undertook to purchase from the Plaintiff, the Commodity being crude palm oil, at the Plaintiff’s Sale Price; 27

(ii) Letter of Agency dated 25 February 2016 from the 1st Defendant to the Plaintiff on TFi-2 (see Exhibit CIBB-20 (page 29) to enclosure 21); and

(iii) Murabahah Sale Contract dated 29 February 2016 (see Exhibit CIBB-20 (page 30 – 32) to enclosure 21) entered between the Plaintiff and the 1st Defendant on TFi-2 where it is stipulated that the Bank’s Purchase Price is RM 37,721,666.83 and the Bank’s Sale Price is RM 69,634,196.96. [29] Thus it is evidently clear that 2 separate Murabahah Sale Contract were executed in respect of the TF-i 1 and TF-i 2. Based on the respective Murabahah Sale Contract, the following inherent elements of a murabahah contract are established –

via clause 1, the Plaintiff sells and the 1st Defendant purchases the asset at the Plaintiff’s Sale Price which consist of the Plaintiff’s Purchase Price and its profit margin; 28

via clause 2, the ownership of the asset is transferred to the 1st Defendant upon completion of the Murabahah Sale

the contracting parties in the Murabahah Sale Contract TF-i 1 and Murabahah Sale Contract TF-i 2 are executed between the Plaintiff and the 1st Defendant through its appointed agent pursuant to Letter of Agency dated 25

the Purchase Price and Sale Price for the Financing Facilities are as follows:

TF-i 1 (see item 9 and 10 to the Appendix of the Murabahah Sale Contract) Purchase Price RM 37,735,543.76 Sale Price RM 69,659,813.78

(ii) TF-i 2 (see item 9 and 10 to the Appendix of the Murabahah Sale Contract) Purchase Price RM 37,721,666.83 Sale Price RM 69,634,196.96 29

the assets to be traded is specifically stated, being a commodity in the form of crude palm oil (Certificate No. CPO29FEB2016-00359-000 in TF-i 1 and Certificate No. CPO29FEB2016-00356-000 in TF-i 2). [30] As such, contrary to the 2nd to the 4th Defendants’ allegations, the Murabahah Sale Contract for TR-i 1 and TR-i 2 has complied with the key operational requirements with regard to the implementation of murabahah contract stipulated in Bank Negara Malaysia (BNM) Policy document BNM/RH/STD 028-4 dated 23 December 2013 which complements the rulings by the Shariah Advisory Council of BNM. [31] Premised on the above there is no merits in the 2nd to the 4th Defendants’ allegations in relation to the Murabahah Sale Contract and the Supplementary General Facility Agreement. The 2nd to the 4th Defendants (directors of the 1st Defendant company) had executed the Agreement on behalf of the 1st Defendant company without any challenge on the validity of the Financing Facilities availed to the 1st Defendant or the Guarantee and Indemnity, are therefore bound by the terms and conditions of the said facilities and guarantee (Chong Hin Trading Co Sdn Bhd & Ors vs Malayan Banking Berhad [2004] 4 CLJ 30 436) Bank Muamalat Malaysia Bhd & Ors v Redha Resources Sdn Bhd & Ors [2017] 2 MLJ 686). Furthermore having benefitted from the Financing Facilities and in absence of any duress, misrepresentation or fraud it is not open to the 2nd to the 4th Defendants to make allegations that the said facilities breaches Islamic principles in order to evade their liabilities under the Guarantee and Indemnity (Bank Muamalat Malaysia Bhd lwn Kong Sun Enterprise Sdn Bhd & Yang Lain [2012] 10 MLJ 665). Whether the amount claimed by the Plaintiff is wrong [32] Based on the Supplemental General Facility Agreement dated 30 December 2015, the General Facility Agreement dated 27 May 2011 was amended in the manner provided in section 2.3 of the Supplemental General Facility Agreement. Among the relevant amendment made is provided in section 2.3 (2) and (9) which reads as follows –

All references to “Bank’s Selling Price” in the General Facility Agreement shall be deleted and replaced with “Bank’s Sale Price”. …

Item 1 (Term Financing-i 1) and Item 1A (Term Financing-i 2) of