a
(a)Services Fees - charges for workers supplied and managed for the Defendant's various industrial and infrastructure projects
/akn/my/judgment/high-court/2026/42d0ca9a-d193-4263-9ff2-dbbd7f1b7b6c
High Court of Malaysia4 May 2026WA-22NCvC-714-12/2023
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“that the originals were typically held by the site operation team. The Defendant argued that the failure to produce these material documents warranted an adverse inference under section 114(g) of our Evidence Act 1950 (EA), suggesting the records would not support the Plaintiff's overtime claims. [38] The Plaintiff had”
“defence is unsustainable and is an afterthought as it had enjoyed the services and made partial payments to the Plaintiff (see Kuwait Finance House Malaysia Bhd v Obnet Sdn Bhd & Ors and another suit [2016] MLJU 1843. The contention to invoke s114(g) EA has no place premised on the facts and circumstances here. As held”
“failed to object to the invoices upon receipt and instead made partial payments, the Defendant is now estopped from disputing them at trial Fuji Xerox Asia Pacific Pte Ltd v Bumi Xerox Sdn Bhd & Ors [2025] MLJU 3431. [42] This Court rules that the principle held in Fuji Xerox Asia Pacific Pte Ltd (supra) applies and th”
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WA-22NCvC-714-12/2023 02/05/2026 09:52:09 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA CIVIL SUIT NO. WA-22NCVC-714-12/2023 BETWEEN JR JOINT RESOURCES HOLDINGS SDN. BHD. [COMPANY NO.: 462917-T] ...PLAINTIFF AND SYSTEM PROTECTION & MAINTENANCE SDN. BHD. [COMPANY NO.: 126032-D] ... DEFENDANT JUDGMENT [1] The claim is primarily for Outstanding Service Fees arising from a breach of contract. The Plaintiff alleges that the Defendant failed, refused, or neglected to pay invoices for professional recruitment and management services provided for foreign workers. This claimed sum is based on the Plaintiff's Statement of Account dated 31.7.2023 reflecting arrears as of 30.11.2021. [2] The demanded sum of RM10,686,520.52 consists of several categories. They are:
a
(a)Services Fees - charges for workers supplied and managed for the Defendant's various industrial and infrastructure projects
b
(b)Reimbursement for Statutory and Operational Costs - levy charges paid on behalf of the foreign workers, charges for medical examinations, including FOMEMA and CIDB registration or training fees, SOCSO contribution and special pass charges, and placement fees for foreign workers, and salaries that the Plaintiff paid directly upon the Defendant's instructions
c
(c) Disbursements in the form of charges for the welfare of workers during transition periods, billed at RM35.00 per calendar day [3] The Plaintiff asserts that the Defendant breached the Principal Agreement dated 8.2.2017, and its subsequent Supplemental Agreement by failing to pay the invoiced Outstanding Service Fees within the stipulated timeframes (including one sent on 21.9.2021), and by disputing the agreed-upon hourly rate revisions (specifically the increase from RM8.90/hour to RM9.16/hour) after previously making payments at the higher rate without initial objection. [4] The Defendant, on the other hand, denies the Plaintiff's claim of RM10,686,520.52. The Defendant asserts that the Plaintiff unilaterally revised the service rates and overtime charges without a formal supplemental agreement, leading to over-invoicing. Specifically, the Defendant disputes the increase of the hourly rate from RM8.90/hour to RM9.16/hour, and later to RM9.67/hour, arguing that these were never mutually agreed upon. [5] The Defendant alleges that the Plaintiff breached the Principal Agreement by failing, refusing, or neglecting to pay the foreign workers' salaries. This failure to pay wages reportedly caused significant operational issues for the Defendant, including workers running away, low productivity, and strikes. [6] The Defendant additionally disputes the validity of the Plaintiff's invoices, claiming they often lacked supporting documents (such as 'kong cards' or attendance sheets) required to verify overtime calculations. [7] There is a counterclaim in this suit whereby the Defendant is seeking a total sum of RM1,725,244.00 plus interest and costs. The key components of this counterclaim include:
a
(a)Refund for accommodation and transportation under the Supplementary Agreement. The Defendant is entitled to claim refunds for actual costs incurred for worker accommodation and transportation in situations other than the RAPID project/ The Defendant has calculated these back charges at a rate of RM150.00 per month per worker
b
(b)Administrative fees for third-party placements of RM150.00 per worker per month for foreign workers who remained under its employment but were managed by the Plaintiff and deployed to third-party projects, such as the ECRL project
c
(c) Credit for the unpaid salaries which the Defendant seeks to knock off the outstanding invoices against sums it claims the Plaintiff owed for unpaid worker salaries. The Defendant suggests that there should have been credit notes. The Background Facts [8] The Plaintiff is a private limited company licensed by the Ministry of Home Affairs Malaysia to provide professional recruitment and management services for foreign workers from various countries. The Defendant is a private limited company that operates as an electrical procurement and construction contractor, utilizing foreign labour for industrial and infrastructure projects throughout Malaysia. [9] On 8.2.2017, the parties entered into a written agreement titled the Foreign Workers Recruitment & Main Agreement (Principal Agreement). Under the terms of this Principal Agreement, the Plaintiff was responsible for the recruitment and management of 514 Bangladeshi workers specifically requested by the Defendant for its construction sector operations. [10] The Principal Agreement was set for a duration of three years commencing from the date of its execution. The Plaintiff was required to issue invoices for its services, which the Defendant was obligated to pay within 30 days, unless a specific amount was disputed in good faith. [11] The relationship became strained due to disagreements over service fee rates and operational issues. A core point of contention involved the service fee rates; the Plaintiff applied revisions (such as increasing the hourly rate from RM8.90/hour to RM9.16/hour and later to RM9.67/hour) that the Defendant maintains were unauthorized and not mutually agreed upon. There were allegations that the Plaintiff failed to pay worker salaries on time, which reportedly led to workers absconding, going on strike, or becoming unproductive on-site. The Defendant floated the argument that the Plaintiff's invoices lacked essential contemporaneous evidence (the kong cards and attendance records or time sheets) to justify the sums charged, particularly for overtime. Evidence of the Moneys Owed [12] The Plaintiff's case relied heavily on the contractual framework and the financial records of their three-year business relationship. PW1, the Plaintiff's Managing Director, testified on the implementation of the Principal Agreement and the Supplementary Agreement, and site operations. PW2, the Plaintiff's Accounts Executive, prepared the invoices and statement of account. She testified on the accounting records. [13] Evidence revealed a Statement of Account dated 31.7.2023, which reflected a total invoiced sum of RM35,026,231.90 and an outstanding balance of RM10,686,520.52. At trial, multiple volumes of Common Bundles of Documents that contained invoices and payment receipts from 1.9.2017 to 31.10.2021 were adduced. There were also emails and letters, including various payment reminders, as well as the formal Letters of Demand sent on 6.9.2021 and 10.8.2023. [14] Invoices sent by the Plaintiff to the Defendant included the rate of RM9.16/hour. The Plaintiff proposed the increase to RM9.16/hour on 5.12.2018 following the government's hike of the minimum wage to RM1,100.00. There is an email from the Defendant to the Plaintiff on 14.2.2019 that stated, "The new rate of RM9.1/hour hereby approved." Which the Plaintiff contends was a typographical error for RM9.16/hour which the Defendant, on the other hand, argues meant RM9.10/hour, though no evidence of the Plaintiff formally accepting this rate. [15] The first time the Defendant formally raised a disagreement and claimed back charges for the difference between RM8.90/hour and RM9.16/hour (a sum of RM309,813.92) was on 15.12.2019. This was approximately 10 months after the revised rate had been applied. At trial, DW1 explicitly confirmed that the Defendant agreed to RM9.10/hour as per the 14.2.2019 email, but there was no explanation as to why the Defendant claimed the difference with the figure of RM9.16/hour instead on 15.12.2019. [16] The Defendant had also claimed RM917,644.00 for residential and transportation costs, which the Defendant claimed to have paid for workers at the RAPID project between September 2017 and September 2019. This was queried by the Defendant in its reply on 6.2.2020, formally seeking the basis and calculations used to arrive at those figures. [17] There is no evidence of the Defendant providing any response or explanation to the Plaintiff's request for clarification. Despite the claim, the Plaintiff continued to issue monthly invoices at the disputed rates, and the Defendant continued to make periodic payments and utilize the workers. During the cross-examination of DW1, it was admitted that the RM917,644.00 for the RAPID project was actually payable by the Defendant under the terms of the Supplemental Agreement, not the Plaintiff. [18] PW2 identified at trial the official receipt as a sample showing that the Defendant had made payments for specific invoices where the Plaintiff had charged the rate of RM9.16/hour between February 2019 and December 2019. The periodical payments made by the Defendant are reflected in the Statement of Account, where many of these payments occurred after the transition to RM9.16/hour (that began with invoices dated 1.1.2019). Through PW2, this Court's attention was invited to invoices no. 0704,0693,0692,and 0703,where the sums were calculated based on the RM9.16/hour rate. Produced at trial are also multiple volumes of invoices that used the RM9.16/hour rate,where the Defendant's payments were set off against these specific sums. [19] The comprehensive Statement of Account dated 31.7.2023 tracks the entire history of the RM35,026,231.90 invoiced and the undisputed Defendant's payment of RM24,339,711.38. A substantial portion of these payments occurred between 1.1.2019 and 31.1.2020, the period during which the Plaintiff consistently invoiced at the rate of RM9.16/hour. The Defendant often paid in round figures (eg, RM300,000.00, RM400,000.00 or RM500,000.00) without telling the Plaintiff exactly which invoices they were made for. PW2 testified that when such unspecified lump sums were received, the oldest outstanding invoices in the Plaintiff's system, many of which used the RM9.16/hour rate. There was no protest from the Defendant - its own witness DW1 testified that the Defendant "continued paying at the time because no dispute yet" regarding the rates. He conceded that the Defendant had never issued a letter or an email identifying any specific invoice that was being rejected for using the RM9.16/hour rate during the 10 months. [20] Thereafter, there is an email dated 18.2.2020 regarding the further increment to RM9.67/hour. The Defendant stated that while it would not block the implementation of the new government-mandated RM1,200.00 minimum wage for the workers, the service fees would not change automatically. The Defendant expressly stated, "service fees rates will remain unchanged until discussed and agreed upon by both parties." [21] The Plaintiff did not issue a formal written rebuttal to this specific email at the time. Instead, its response was operational. Despite the Defendant's statement that the rate was to remain unchanged, the Plaintiff proceeded to issue monthly invoices calculated at the revised rate of RM9.67/hour from 1.2.2020. The Plaintiff carried out this action even though it knew that there was no agreement as of yet at the material time, as admitted by PW2. [22] On the Defendant's part, it continued to make periodical payments to the Plaintiff after receiving the invoices at the RM9.67/hour rate. The Defendant did not specifically challenge any of the invoices issued by the Plaintiff regarding the RM9.67/hour rate. DW1 eventually conceded at trial that the debt was "partly payable", directly contradicting the Defendant's pleaded defence that the entire claim should be dismissed. DW1 could not explain why the Defendant failed to include any claim for the back charges regarding the RM9.67/hour rate in its Defence and Counterclaim or in its earlier solicitor's letter. Evidence of Breach Regarding Worker Salaries [23] The Defendant sought to prove that the Plaintiff had failed to pay the foreign workers' wages through the following evidence. First, the admission by PW1 during cross-examination. She had explicitly admitted that she was aware there were times when the Plaintiff was not paying the wages of foreign workers. [24] Next, she further admitted that the Plaintiff failed to pay worker salaries on time because the Defendant's outstanding debt had reached approximately RM7,000,000.00, which prevented the Plaintiff from meeting its payroll obligations. [25] Third, there is an email from the Defendant to the Plaintiff dated 7.2.2018, which contained an urgent appeal for the Plaintiff to proceed with the January 2018 salary payments, noting that approximately RM3,600,000.00 was then owing but warning that the implication of nonpayment would be "too great". Evidence of Operational Disruptions [26] The Defendant substantiated the allegations of strikes, absconding workers, and how productivity through PW1's admission under crossexamination that she was aware that the workers had, at certain moments, abandoned the site or gone on strike specifically because they were not paid their wages. [27] PW1 admitted that there were material periods where workers were idling and not fully utilized. She further agreed that when workers ran away or refused to work, the progress of the Defendant's project would be severely affected. [28] The email from the Defendant dated 7.2.2018 warned that failure to pay wages would lead to specific events, including workers striking, site progress being affected, and the potential for the client (Petronas) to charge heavy penalties for non-performance. [29] DW1 testified that site supervisors observed workers failing to clock out immediately after work while waiting for vehicles, contributing to what the Defendant believed were inaccurate overtime claims during the period of low productivity. [30] The Plaintiff, while admitting that these incidents occurred, tendered evidence to argue that those disruptions were the Defendant's own fault. Any delays in salary payments were directly attributed to the Defendant's failure to pay invoiced service fees, which had reached a substantial debt. Despite the Defendant's non-payment, evidence was adduced to show that the Plaintiff eventually met its obligations and paid the salaries of workers after negotiating for partial payments or post-dated cheques. Evidence on the Defendant's Counterclaim [31] The Defendant's counterclaim for RM1,725,244.00 is comprised of:
subsection
(1) Accommodation and Transportation Costs - RM1,253,044.80
subsection
(2) Service Fee Rate Overcharges-RM309,813.92
subsection
(3) Administrative Fees-RM472,200.00 [32] Under the Accommodation and Transport Costs, the Defendant claims RM917,644.00 for the RAPID project costs. Appendix A of the Supplemental Agreement expressly stipulates that the Defendant is responsible for accommodation and transportation for workers at the RAPID project. There was no other evidence that the Defendant adduced to rebut this or show that the position had changed. DW1 admitted that these costs are payable by the Defendant, not the Plaintiff. [33] Other Project Costs of RM335,400.00 are the other items under the Accommodation and Transportation Costs. The defendant sought to back charge the Plaintiff at an estimated rate of RM150.00 per worker per month. DW1 admitted at trial that there was no documentary evidence before this Court to prove the actual costs incurred to justify this RM150.00 figure; he confirmed it was an estimate. [34] Concerning the Service Fee Rate Overcharges, the Defendant seeks to recover the difference between the RM8.90/hour rate and the RM9.16/hour rate applied in 2018 and 2019, with the argument that the revision was unilateral. The Plaintiff produced correspondence suggesting the revision was necessary due to statutory minimum wage increases. The evidence noted by this Court above is again applicable here particularly the RM9.16/hour rate, which was never agreed upon, though the Defendant agreed on RM9.10/hour but was unable to explain why it was claiming a full difference between RM8.90/hour and RM9.16/hour if it had accepted RM9.10/hour. [35] The Defendant had continued to use the workers, collected payments from its own clients for their labour, and made periodical payments (both lump sums and specific amounts) toward these invoices for over three years without initial objection. [36] The basis of the Defendant's counterclaim of administrative fees of RM472,200.00 is a flat fee of RM1.50/hour for workers managed by the Plaintiff but deployed to third-party projects (eg, CWM, ECRL). The evidence showed that this fee was conditional upon the third-party clients signing contracts directly with the Plaintiff, which would then allow the Plaintiff to invoice them directly. DW1 admitted that the Plaintiff never entered into direct agreements with these third parties and confirmed, based on email discussions, that the Defendant is not entitled to claim the RM1.50 fee for contracts signed with the Defendant. This Court's Assessment [37] The existence and the production of the kong cards (attendance records) were a major point of dispute at trial. PW1 and PW2 testified that the invoices were generated based on kong cards or attendance sheets signed by the person-in-charge at the worksites. They were not included in the bundles of documents produced at trial. PW2 explained that she only possessed scanned copies and that the originals were typically held by the site operation team. The Defendant argued that the failure to produce these material documents warranted an adverse inference under section 114(g) of our Evidence Act 1950 (EA), suggesting the records would not support the Plaintiff's overtime claims. [38] The Plaintiff had sought to prove that the Defendant's objections to the invoices and missing documents were a belated afterthought. This is because the Defendant had never raised any objection or complaint regarding the lack of supporting documents/kong cards at the material time when the invoices were issued. The first formal letter regarding the rate revisions was sent on 15.12.2019 (about 10 months after the rates changed), and the issue of overtime overcharging was only raised through solicitors on 12.10.2021. [39] It was established through the cross-examination of DW1 that the usual manner in which the Plaintiff submitted invoices that included supporting documents, and that the Defendant had never issued a letter or an email identifying any specific invoice received without its documentation. [40] This Court accepts the Plaintiff's reliance on the usual course of business and the Defendant's silence that proves on a balance of probabilities, that the non-production of the kong cards at trial is not fatal. This Court considers that the invoices were consistently sent via email and courier, and that PW2 emailed the Defendant after each delivery to confirm. Another series of evidence this Court takes into account is the periodical payments of approximately 70% of the total debt without contemporaneous objection. So, this Court finds the Defendant's conduct constitutes acceptance of the rate. Moreover, the Defendant continued to utilize the services, received invoices clearly stating the RM9.16 rate, and made payments. [41] The specific sample of the receipt in Bundle B5, page 1029, serves as the direct documentary "bridge" proving that payments were indeed applied to invoices calculated at the higher rate. Because the Defendant had failed to object to the invoices upon receipt and instead made partial payments, the Defendant is now estopped from disputing them at trial Fuji Xerox Asia Pacific Pte Ltd v Bumi Xerox Sdn Bhd & Ors [2025] MLJU 3431. [42] This Court rules that the principle held in Fuji Xerox Asia Pacific Pte Ltd (supra) applies and the Plaintiff has established a prima facie case of indebtedness. By producing the undisputed Statement of Account and the underlying invoices, the evidential burden shifted from the Plaintiff to the Defendant to prove that the quantum was incorrect through alternative calculations or evidence, which the Defendant failed to provide. [43] The principle is reinforced when the Defendant continued to act in a manner consistent with the validity of the position. Aside from the periodical payments, the Defendant had continued to enjoy the services of the workers supplied by the Plaintiff. The Defendant had also collected full payment from its own clients (such as Petronas) for the labour provided by those workers. The Defendant additionally failed to adduce specific and sufficient evidence to prove actual loss or the validity of its back charges. [44] The Court of Appeal has consistently affirmed the principle that a party is estopped from disputing invoices if they failed to object at the material time - Ekuiti Setegap Sdn Bhd v Plaza 393 Management Corp [2018] 4 MLJ 284, Yoong Sze Fatt v Pengkalan Securities Sdn Bhd [2010] 1 MLJ 85 and KGN Jaya Sdn Bhd v Pan Reliance Sdn Bhd [1996] 1 MLJ 233. This Court is thus bound to apply the said legal principle. [45] The Federal Court has recently reaffirmed this legal stance in the context of commercial acquiescence in The New Straits Times Press (Malaysia) Bhd v Aideah Communications Sdn Bhd [2025] 5 CLJ 61. The Federal Court supported the view that raising objections long after the fact constitutes an afterthought formulated as a defence to evade liability. In Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 2 MLJ 685, the Federal Court held that certificates or statements of indebtedness operate in the realm of adjectival law, shifting the evidential burden to the debtor to disprove the quantum. [46] The Federal Court and the Court of Appeal have consistently held that the task of interpreting a commercial contract requires an objective approach. The correct test is what a reasonable person, possessing all the background and knowledge available to the parties at the time of the contract, would understand the language to mean. If a detailed semantic or syntactical analysis of words leads to a conclusion that flouts business common sense, the language must be made to yield the business common sense. The courts including this Court, should lean toward an interpretation that makes the transaction commercially viable rather than one that makes it futile. [47] While No Oral Modification clauses like Clause 18 of the Principal Agreement here are generally effective to ensure certainty, the latest Federal Court position affirms that they cannot be used as an absolute shield where a party's conduct establishes acquiescence or consent at the material time. As affirmed in The New Straits Times Press (Malaysia) Bhd (supra) by the Federal Court, a party is estopped from relying on a formal approval requirement if they acquiesced in the increment at the material time. The No Oral Modification Clause cannot be relied on solely to mount a defence that is clearly an afterthought, formulated long after the event, to evade liability. As with the circumstances in this case, it is most unjust to allow such a clause to shield the Defendant from its liability. [48] In line with the legal principles, this Court rules that the Defendant's defence is unsustainable and is an afterthought as it had enjoyed the services and made partial payments to the Plaintiff (see Kuwait Finance House Malaysia Bhd v Obnet Sdn Bhd & Ors and another suit [2016] MLJU 1843. The contention to invoke s114(g) EA has no place premised on the facts and circumstances here. As held by the Court of Appeal in Ekuiti Setegap Sdn Bhd (supra), as the Defendant received the statements of account without dispute prior to the legal action, it is highly probable that the contents are correct. Therefore, this Court allows the Plaintiff's claim. [49] For the Defendant's Counterclaim, by failing to produce material documents to support estimated costs and through the admissions of its own witness, the Defendant has not met the threshold of proving its Counterclaim on a balance of probabilities. The Defendant's Counterclaim is dismissed in its entirety. See Hong Yik Trading v Liziz Plantation Sdn Bhd [2017] 8 CLJ 491 ; [2017] 5 MLJ 398. This Court's Findings [50] Based on the totality of the evidence and the legal principles established during the trial, this Court finds that the Plaintiff has proved its claim on a balance of probabilities, while the Defendant has failed to substantiate its Counterclaim. The decision in favour of the Plaintiff is grounded in the following findings:
subsection
(1) Establishment of Debt and Admission of Liability - The Plaintiff successfully established a prima facie case of indebtedness by producing the Statement of Account and the underlying monthly invoices. - Crucially, during cross-examination, DW1 admitted that the outstanding debt was "partly payable," directly contradicting the Defendant's pleaded defence that sought a total dismissal of the claim
subsection
(2) Application of the Fuji Xerox Principle (Estoppel) - This Court applies the principle in Fuji Xerox Asia Pacific Pte Ltd (supra) of estoppel, finding that the Defendant's conduct over a three-year period confirmed the validity of the invoices - The Defendant:
i
(i) Continued to utilize the services of the workers supplied by the Plaintiff
subparagraph
(ii) Collected full payment from its own clients for the labour provided
subparagraph
(iii) Made periodical payments amounting to approximately 70% of the total invoiced sum without raising any contemporaneous written objection to the service rates or the lack of kong cards
subparagraph
(iv) Consequently, the Defendant is estopped from disputing these invoices at this late stage, and its current objections are characterized as belated afterthoughts
subsection
(3) Contractual Validity of Rate Revisions - This Court finds that the revisions to the service fees (RM9.16/hour and RM9.67/hour) were contractually justified under Clause 5.1 (Regulatory Intervention) - These revisions were commensurated with mandatory government minimum wage hikes and levy policy changes - The Plaintiff's interpretation aligns with business common sense, as the alternative would force the Plaintiff to absorb all statutory cost increases, defying the objective aim of the agreement
subsection
(4) Failure of the Counterclaim - The Defendant's Counterclaim for RM1,725,244.00 is dismissed in its entirety for the following reasons:
i
(i) RAPID Costs: The Defendant admitted at trial that the RM917,644.00 claimed for the RAPID project was actually its own responsibility under the Supplemental Agreement
subparagraph
(ii) Lack of Substantiation: The Defendant failed to produce any documentary evidence to justify its estimated back charge of RM150.00 per worker for other projects
subparagraph
(iii) Administrative Fees: The claimed RM1.50/hour fee was conditional upon direct contracts with third parties that never materialized, a fact affirmed by DW1 This Court's Orders [51] Premised on the findings above, this Court metes out the following orders:
i
(i) Judgment is entered in favour of the Plaintiff for the principal sum of RM10,686,520.52. The Defendant is accorded sixty days from the date of this Order to make full and final settlement
subparagraph
(ii) The Defendant shall pay the Plaintiff interest on the judgment sum at the rate of 5% per annum, calculated from 30.11.2021 until the date of full and final settlement
subparagraph
(iii) The Defendant's Counterclaim is dismissed with costs
subparagraph
(iv) The Defendant is ordered to pay costs of the action to the Plaintiff, subject to the allocatur, in the sum of RM80,000.00
v
(v) All other reliefs sought in the Defendant's Statement of Defence and Counterclaim are hereby dismissed. DATED 04 MAY 2026 ROZ MAWAR ROZAIN JUDGE HIGH COURT OF MALAYA KUALA LUMPUR For the Plaintiff: Jeya Kumar A/L Vaithilingam, Asma Badrul Azmi together with Pavit Coran (Pupil in Chambers) Kanesalingam & Co. For the Defendant: Lim Zhi Jian together with Ling Siew Hui Rosli Dahlan Saravana Partnership
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