Export-Import Bank of Malaysia Berhad v 1. ) Chan Toh Pew (WA-22NCC-787-11/2024)

CHAN TOH PEW (No. Pasport Australia: PB2077359)

AMY LAU SIU YIN (No. Pasport British: 556980078)

HO WAI LOONG (No. Pasport Singapura: K2433321R) ... DEFENDANTS JUDGMENT (Enclosure 14) INTRODUCTION [1] Before the court is an application by the 1st and 2nd Defendants to transfer the proceedings in Kuala Lumpur High Court Suit No. WA-22NCC-787-11/2024 (“Suit 787”) to the Ipoh High Court pursuant to Order 57 Rule 1 of the Rules of Court 2012 (“ROC”) and/or Section 23 of the Courts of Judicature Act 1964 (“CJA 1964”). [2] Having considered the submissions of both parties and the relevant legal authorities, I have come to the conclusion that the application should be allowed. These are my grounds. BACKGROUND FACTS [3] The Plaintiff, Export-Import Bank of Malaysia Berhad (“EXIM”), granted a term loan facility under an Overseas Project Financing Facility (“the Facility”) to Superboom Projects Sdn Bhd (“the Borrower”) vide a Facility Agreement dated 30.9.2016. [4] The Facility was divided into two tranches: an OPF-1 Facility of up to USD20,000,000.00 and an OPF-2 Facility of up to USD22,000,000.00. By 27.11.2018, the total amount of USD20,000,000.00 under the OPF-1 Facility had been fully disbursed by the Plaintiff to the Borrower. [5] The Defendants executed a Guarantee Agreement dated 2.11.2016 (“Guarantee Agreement”) in favour of the Plaintiff to jointly, severally, unconditionally and irrevocably guarantee, as principal debtors and not merely as sureties, the repayment in full on demand of the outstanding sums owed to the Plaintiff under the Facility. [6] On 24.11.2021, the Borrower's account had turned impaired following the Borrower's alleged failure to make timely payment of the quarterly interest due under the Facility on 23.11.2021. [7] By way of a Notice of Demand dated 26.7.2022, the Plaintiff issued a written demand to the Borrower for payment of the 3rd instalment within fourteen days, failing which the Plaintiff reserved its right to terminate and recall the entire Facility. [8] The Plaintiff subsequently issued a Notice of Termination and Demand dated 19.8.2022 to validly terminate and recall the Facility with immediate effect, and to demand payment of the outstanding Secured Amount amounting to USD21,903,950.60 as at 19.8.2022 within seven days. [9] The Plaintiff claims that the total outstanding Secured Amount due and owing to the Plaintiff under the Facility as at 29.7.2024 is USD25,810,806.27. [10] By way of letters dated 31.7.2024, the Plaintiff demanded that the Defendants make payment of the Secured Amount due within seven days. The Defendants have allegedly failed, refused and/or neglected to make the payment. [11] On 8.11.2024, the Plaintiff commenced Suit 787 against the Defendants in the Kuala Lumpur Commercial Court for recovery of the outstanding sums owed to the Plaintiff under the Facility. [12] It is pertinent to note that there are three other related suits pending in the Ipoh High Court: a) A civil suit filed by the Borrower against the Plaintiff via Civil Suit AA-22NCC-1-01/2023 (“Suit 1”) regarding the termination of the Facility; b) Originating Summons No. AA-24NCC-19-06/2024 (“OS 19”) filed by the Borrower, the 1st and 2nd Defendants, and The Haven Sdn Bhd against the Plaintiff and others, challenging the validity of the appointment of Receivers and Managers over the Borrower; and c) Originating Summons No. AA-24NCC-22-07/2024 (“OS 22”) filed by the Receivers and Managers of the Borrower against the Defendants and the Plaintiff as nominal defendant, seeking orders to enforce the Receivers and Managers' powers over the Borrower. [13] Notably, OS 22 had previously been transferred from the Kuala Lumpur High Court to the Ipoh High Court, and OS 19 had been transferred from Ipoh High Court 1 to Ipoh High Court 2. [14] On 27.1.2025, the 1st and 2nd Defendants filed the present application to transfer Suit 787 to the Ipoh High Court. RESPECTIVE PARTIES' SUBMISSIONS Defendants' Submissions [15] The Defendants submit that Suit 787 should be transferred to the Ipoh High Court on the following grounds: a) The 1st and 2nd Defendants are permanent residents in Malaysia with residential addresses in Ipoh, Perak, satisfying Order 57 Rule 1(4)(B) of the ROC; b) Suit 787 shares common legal and factual issues with Suit 1, OS 19, and OS 22, which are all pending in the Ipoh High Court; c) To ensure fairness and consistency in judicial decisions, these related cases should be heard together by the same court; d) The Defendants' liability as guarantors would be subject to the outcome of Suit 1 regarding whether there was a breach by the Borrower of the Facility Agreement; and e) Hearing the cases together in the Ipoh High Court would be more cost-effective and time-saving for all parties and the court. Plaintiff's Submissions [16] The Plaintiff opposes the transfer application on the following grounds: a) The Kuala Lumpur Commercial Court is the proper forum and/or forum conveniens to hear Suit 787 because the Plaintiff's cause of action arose in Kuala Lumpur; b) The facts on which Suit 787 are based exist and/or are alleged to have occurred within Kuala Lumpur; c) It is desirable in the interests of justice that the proceedings should remain in the Kuala Lumpur Commercial Court, which specialises in commercial matters; d) There is no necessity for Suit 787 to be heard together with Suit 1 as the Defendants' liability to repay the outstanding loan, as principal debtors under the Guarantee Agreement, is independent of the Borrower's liability and/or the outcome of Suit 1; and e) Suit 787 cannot be heard together with OS 19 and OS 22 as they are procedurally incompatible since writ actions and originating summons actions are disposed of differently. LEGAL FRAMEWORK FOR TRANSFER OF PROCEEDINGS [17] The legal basis for the transfer of proceedings from one High Court to another is provided in Section 23 of the CJA 1964 and Order 57 of the ROC. [18] Section 23(1) of the CJA 1964 sets out the civil jurisdiction of the High Court as follows: “(1) Subject to the limitations contained in Article 128 of the Constitution the High Court shall have jurisdiction to try all civil proceedings where –

the cause of action arose;

the defendant or one of several defendants resides or has his place of business;

the facts on which the proceedings are based exist or are alleged to have occurred; or

any land the ownership of which is disputed is situated, within the local jurisdiction of the Court and notwithstanding anything contained in this section in any case where all parties consent in writing within the local jurisdiction of the other High Court.” [19] Order 57 Rule 1 of the ROC provides: “(1) Where the Judge of the High Court or a Judge of the Sessions Court or a Magistrate is satisfied that any proceedings in that Court can be more conveniently or fairly tried in some other Court of co-ordinate jurisdiction, he may on application by any party, order the proceedings to be transferred to the other Court.

Before making any order to transfer any proceedings from

the High Court to another High Court of co-ordinate jurisdiction; ... the High Court Judge... shall take into consideration whether the High Court... which shall hear the case is located at or nearest to the place where—

(A) the cause of action arose;

(B) the defendant, or one of the several defendants, resides or has his place of business;

(C) the facts on which the proceedings are based exist or are alleged to have occurred;

(D) the land the ownership of which is disputed is situated; or

(E) for other reasons it is desirable in the interests of justice that the proceedings should be transferred.” [20] Having analysed these provisions and the relevant case law, I shall now examine whether the transfer application meets the legal requirements. ANALYSIS AND FINDINGS OF THE COURT Whether Transfer to Ipoh High Court is Appropriate The Defendants' Place of Residence [21] The Defendants contend that the 1st and 2nd Defendants are permanent residents in Malaysia with residential addresses in Ipoh, Perak, thus satisfying Order 57 Rule 1(4)(B) of the ROC. [22] The Plaintiff argues that the mere fact that the 1st and 2nd Defendants currently reside in Ipoh does not ipso facto mean that Suit 787 must be transferred to the Ipoh High Court, citing cases such as Malacca Securities Sdn Bhd v Loke Yu [1998] 3 CLJ 22 (HC) and Lim Guan Eng v FZ Sdn Bhd & Anor [2015] 8 MLJ 469 (HC). [23] I am satisfied that the evidence clearly establishes that the 1st and 2nd Defendants have permanent residential addresses in Ipoh, as demonstrated by the permanent resident cards exhibited in Enclosure 15 (Exhibit “CTP-1”). The 3rd Defendant, though residing in Singapore, has indicated that it would be more convenient for him to travel to Ipoh as there is a direct daily flight from Singapore to Raja Azlan Airport in Ipoh. [24] While I acknowledge the Plaintiff's argument that the Defendants' residential addresses alone might not be sufficient to warrant a transfer, this factor alone satisfies one of the criteria under Order 57 Rule 1(4)(B) of the ROC. As held in the case of Vincent Danial lwn. Rani M Doraisamy [2009] 11 MLRH 179 (HC), the residence of just one defendant in a particular jurisdiction is sufficient to ground an application for transfer of proceedings to that jurisdiction. The court stated: “Sebenarnya dan sekiranya terdapat satu keadaan, di mana ada lebih daripada satu defendan dan hanya salah satu defendan tinggal atau mempunyai peniagaan di Kuala Lumpur, alasan itu sahaja mencukupi untuk memohon kes dipindahkan ke Mahkamah Kuala Lumpur.” [25] In Chow Siew Hon v Lee Tian Hock & Anor [2016] MLRHU 510 (HC), the court emphasised that “the test to be applied here is not where the Plaintiff resides, but where the Defendants reside, or have their place of business.” The court further held that: “It is not open to the Plaintiff to conveniently suit his own purpose and file this action in the inappropriate local jurisdiction.” [26] I find that this factor weighs in favour of transferring the proceedings to the Ipoh High Court. Relationship with Other Pending Proceedings in Ipoh [27] The Defendants contend that Suit 787 is closely related to Suit 1, OS 19, and OS 22, which are all pending in the Ipoh High Court, and that these cases share common legal and factual issues. [28] The Plaintiff argues that there is no necessity for Suit 787 to be heard together with Suit 1 as the Defendants' liability to repay the outstanding loan, as principal debtors under the Guarantee Agreement, is independent of the Borrower's liability and/or the outcome of Suit 1. Additionally, the Plaintiff submits that Suit 787 cannot be heard together with OS 19 and OS 22 as they are procedurally incompatible. [29] Upon careful examination of the pleadings and affidavits filed in this matter, I find that there is a substantial nexus between Suit 787 and the proceedings pending in the Ipoh High Court, particularly Suit 1. [30] While the Plaintiff contends that the Defendants' liability as guarantors is independent of the Borrower's liability under the Facility Agreement, this argument overlooks the fundamental issue in Suit 1, which is whether there was a breach of the Facility Agreement by the Borrower in the first place. If it is determined in Suit 1 that there was no breach by the Borrower of the Facility Agreement, this would directly impact the Defendants' liability as guarantors in Suit 787. [31] This is particularly significant given that the Defendants have explicitly raised the issue of the validity of the termination of the Facility in their defence. It is a fundamental principle of guarantees that a surety's liability arises only upon the principal debtor's default. If there is no default by the principal debtor, the surety's liability may not be triggered. This issue is clearly intertwined with the matters to be determined in Suit 1. [32] Moreover, I note that OS 19 challenges the validity of the appointment of the Receivers and Managers over the Borrower, and OS 22 concerns the enforcement of the Receivers and Managers' powers over the Borrower. These proceedings are interconnected with the issues in Suit 787, as they all stem from the same factual matrix regarding the Facility Agreement and its alleged breach. [33] Regarding the Plaintiff's argument that Suit 787 cannot be heard together with OS 19 and OS 22 due to procedural incompatibility, I observe that an originating summons can be converted to a writ action if there are disputed issues of fact that require the examination of witnesses. The procedural incompatibility, therefore, is not an insurmountable obstacle if the cases are to be heard by the same court. [34] In the interests of justice, it is desirable that related proceedings involving common issues and parties be heard by the same court to avoid the risk of inconsistent judicial decisions. This principle has been recognised in numerous cases, including POSC TI Sdn Bhd v Kerajaan Negeri Terengganu & Anor [2016] 10 MLJ 663 (HC), where the court held that: “The court is to weigh any or all the factors relied on in making a decision on whether the application ought to be acceded to.” [35] I find that this factor weighs strongly in favour of transferring the proceedings to the Ipoh High Court. Forum Conveniens [36] The Plaintiff contends that the Kuala Lumpur Commercial Court is the forum conveniens for Suit 787 because the Plaintiff's cause of action arose in Kuala Lumpur, and the facts on which Suit 787 are based exist and/or are alleged to have occurred within Kuala Lumpur. [37] The Defendants argue that Ipoh is the forum conveniens as the 1st and 2nd Defendants reside there, and the related proceedings are pending in the Ipoh High Court. [38] The Plaintiff relies on the cases of Malacca Securities Sdn Bhd v Loke Yu [1998] 3 CLJ 22 (HC) and United Overseas Bank (Malaysia) Bhd v Tegap Bumijaya Sdn Bhd & Ors [2019] 1 LNS 1970 (HC) to support the proposition that in a contract for the payment of money, the breach occurs at the place where payment is to be made, which in this case is Kuala Lumpur where the Plaintiff's head office is located. [39] While there is merit to the Plaintiff's argument that certain aspects of the cause of action arose in Kuala Lumpur, including the execution of the Facility Agreement and the Guarantee Agreement, and the place where payments were to be made, these factors must be weighed against other considerations under Order 57 Rule 1 of the ROC. [40] In the present case, considering all relevant factors, I find that the Ipoh High Court has the closest nexus to the dispute. The 1st and 2nd Defendants reside in Ipoh, the related proceedings involving the same parties and arising from the same factual matrix are pending in the Ipoh High Court, and the determination of issues in those proceedings may directly impact the outcome of Suit 787. [41] Furthermore, the Plaintiff's argument regarding the specialisation of the Kuala Lumpur Commercial Court in commercial matters, while a relevant consideration, does not outweigh the other factors in favour of transfer. The Ipoh High Court is equally capable of adjudicating commercial disputes, and the benefit of having all related proceedings heard by the same court outweighs the advantage of having the case heard by a specialised court. [42] While I note that in the case of Bank Bumiputra Malaysia Berhad v Melewar Holdings Sdn. Bhd. & 4 Ors. [1990] 1 CLJ (Rep) 654 (HC), the court held that: "Despite the fact that all the transactions were concluded in Kuala Lumpur, the principle cause of action... supersedes the defendants residential qualification under s. 23(b) of the Court of Judicature Act 1964," this principle supports the consideration of factors beyond mere residential qualifications. In Bank Bumiputra, the court recognised that the location of the principal cause of action could override defendants' residential qualifications when determining the appropriate forum. In the present case, while the Plaintiff's cause of action may have certain connections to Kuala Lumpur, the existence of three related proceedings in Ipoh involving the same Facility Agreement and overlapping parties creates a compelling case for consolidating all matters in one forum to avoid inconsistent judicial decisions. [43] Similarly, while in Low Long Yoong & Anor v Low Kok Choon & Anor [2014] 4 CLJ 577 (HC), the court held that: "The most important task in a transfer application is to ascertain which court has the closest nexus to the dispute," this principle supports the transfer to Ipoh when considering the totality of circumstances. Although certain transactional elements of the Guarantee Agreement may connect to Kuala Lumpur, the Ipoh High Court has developed the closest nexus to the dispute when viewed holistically. The 1st and 2nd Defendants reside in Ipoh, three related proceedings involving the same Facility Agreement and substantially overlapping parties are already pending before the Ipoh High Court, and the fundamental question of whether there was a valid breach of the Facility Agreement that could trigger the guarantors' liability is being contested in Suit 1 in Ipoh. These interconnected factors collectively establish that Ipoh, rather than Kuala Lumpur, has emerged as the natural forum with the strongest connection to resolve all aspects of this multifaceted dispute. [44] I am not persuaded by the Plaintiff's reliance on the case of R Ramani a/l M Ramalingam (suing on behalf of the Recording Industry Association of Malaysia, a registered society) & Ors v Deluxe Exclusive Lounge Sdn Bhd and another suit [2017] 8 MLJ 302 (HC). In that case, the plaintiffs had commenced copyright infringement suits in the Kuala Lumpur Intellectual Property Court, and despite three factors under Order 57 Rule 1(4)(A)-(C) operating in favour of transfer to the Johor Bahru High Court, the court declined to exercise its discretion to transfer the suits on the ground that they could be more 'conveniently tried' in the specialized IP Court. That case involved specialized intellectual property matters requiring specific expertise in IP jurisprudence, which were distinctly different from the commercial banking dispute in the present case. Unlike the unique specialization required for intellectual property matters, commercial banking disputes can be adequately adjudicated by any High Court, and the benefits of consolidating related proceedings in the Ipoh High Court - where all interconnected cases involving the same parties and factual matrix are pending - clearly outweigh any perceived advantage of having this matter heard in the Kuala Lumpur Commercial Court. [45] I also note that there would be no prejudice to the Plaintiff if Suit 787 is transferred to the Ipoh High Court. The Plaintiff, as a financial institution, has the resources to litigate in Ipoh, and any inconvenience would be minimal compared to the benefits of having all related proceedings heard by the same court. [46] Weighing all these factors, I find that the interests of justice would be better served by transferring Suit 787 to the Ipoh High Court. Independence of Guarantors' Liability [47] The Plaintiff's principal argument against the transfer is that the Defendants' liability as guarantors is independent of the Borrower's liability under the Facility Agreement, citing the cases of Andrew Lee Siew Ling v United Overseas Bank (Malaysia) Berhad [2013] 1 CLJ 24 (FC) and Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 1 MLJ 77 (FC). [48] The Plaintiff further contends that since the Facility has already matured and/or expired on 23.2.2023, the outstanding loan is long overdue and payable, and the Defendants are presently in default of their payment obligations under the Guarantee Agreement, irrespective of the outcome of Suit 1. [49] While I acknowledge the legal principle that a guarantor who has agreed to be bound as a principal debtor may have liability that is not dependent on the liability of the principal borrower, this principle must be applied in the context of the specific terms of the Guarantee Agreement and the nature of the disputes in the related proceedings. [50] The Defendants contend that their liability under the Guarantee Agreement is contingent upon a finding that there was a breach of the Facility Agreement by the Borrower, which is precisely the issue being contested in Suit 1. The Defendants argue that if there was no breach by the Borrower, then there can be no liability on their part as guarantors. [51] The case of Lifomax Woodbuild Sdn Bhd v Ng Yee Teck [2017] 1 LNS 528 (CA), relied upon by the Plaintiff, is distinguishable from the present case. In that case, the Court of Appeal had already made a final determination that the borrower was not liable, whereas in the present case, the issue of the Borrower's liability is still pending determination in Suit 1. [52] Moreover, the Defendants have raised the validity of the termination of the Facility Agreement as a defence in Suit

This defence directly overlaps with the issues in Suit 1, and a determination of these issues by different courts could lead to inconsistent findings. [53] In my view, despite the legal principle regarding the independence of a guarantor's liability, the practical reality is that the determination of issues in Suit 1 may directly impact the adjudication of Suit 787. This factor weighs in favour of having both cases heard by the same court. Procedural Compatibility of Writ Actions and Originating Summons [54] The Plaintiff argues that Suit 787 cannot be heard together with OS 19 and OS 22 as they are procedurally incompatible, with writ actions being disposed of by oral testimony and originating summons actions being disposed of by affidavit evidence. [55] While I acknowledge the procedural differences between a writ action and an originating summons, these differences do not preclude the cases from being heard by the same court. As mentioned earlier, an originating summons can be converted to a writ action if there are disputed issues of fact that require the examination of witnesses. [56] Moreover, even if the cases are not formally consolidated, having them heard by the same court would allow for better case management and coordination, reducing the risk of inconsistent findings. [57] I am not persuaded that the procedural incompatibility is a sufficient reason to reject the transfer application, given the substantial nexus between the cases and the benefits of having them heard by the same court. Balancing of All Factors [58] Having considered all the relevant factors, I find that: a) The 1st and 2nd Defendants reside in Ipoh, satisfying Order 57 Rule 1(4)(B) of the ROC; b) There is a substantial nexus between Suit 787 and the proceedings pending in the Ipoh High Court, particularly Suit 1; c) The determination of issues in Suit 1 may directly impact the outcome of Suit 787; d) The interests of justice would be better served by having all related proceedings heard by the same court to avoid the risk of inconsistent judicial decisions; e) Any inconvenience to the Plaintiff would be minimal compared to the benefits of having all related proceedings heard by the same court; and f) The Ipoh High Court has the closest nexus to the dispute when all factors are considered. [59] Based on the balancing of these factors, I am satisfied that the proceedings in Suit 787 can be more conveniently and fairly tried in the Ipoh High Court. CONCLUSION AND ORDER [60] For the reasons stated above, the application in Enclosure 14 is allowed with costs in the cause. [61] Suit 787 is hereby transferred to the Ipoh High Court for further determination. [62] All directions concerning the conduct of Suit 787, including but not limited to the timeframe for filing any pleadings related to any interlocutory proceedings and the main action, as well as any other matters related thereto, which have been given or may be given by this court, are stayed, and subsequently to be issued by the court to which this matter has been transferred. 27 June 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Manshan Singh with Lim Shu Yi and Ho Pui Yan (Messrs Skrine) For the Defendants: Surindar Singh with Rabinder Singh and Eric Clement (Messrs Chong, Surindar, Su &