JSNT2 Sdn Bhd v Exyte Malaysia Sdn Bhd (WA-24C-111-07/2023)

EXYTE MALAYSIA SDN. BHD. [Company No.: 200301034750 (637171-K)]

BANK OF CHINA (MALAYSIA) BERHAD [Company No.: 200001008645 (511251-V)]

CHINA CONSTRUCTION BANK CORPORATION NANTONG BRANCH ... DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] In this application (encl. 1) by the Plaintiff for an order for injunctive reliefs against the Defendants to, among others, prevent the Defendants from complying with any demand or receiving or releasing the sum of RM24,828,868.80 (‘Said Sum’) in relation to the Performance Bond dated 11.3.2022 ('PB') which was issued by the 2nd Defendant ('D2') in favor of the 1st Defendant ('D1') pending the disposal of the arbitral proceedings between the Plaintiff and D1 (‘Proceedings’) on the ground of unconscionable conduct by D1, the Plaintiff had raised a novel issue involving s 410 of the Companies Act 2016 (‘CA 2016’). [2] Apart from the usual issue which arises in applications under sub-s 11(1) of the Arbitration Act 2005 [Act 646] ('AA 2005') as to whether a defendant’s demand on the performance bond or bank guarantee is unconscionable, the issues in the present case include the questions on whether –

the PB is a security over the Plaintiff’s property under paragraph 410(1)(b) CA 2016; and

D1 can call for the PB during the pendency of a judicial management (‘JM’) proceeding, specifically the statutory moratorium phase under s 410 CA 2016. [3] On 14.7.2023, I had allowed the Plaintiff’s ex-parte application (encl. 2) to restrain the Defendants from, among others, releasing the sums under the PB to D1 pending disposal of encl. 1. [4] Two weeks later, the learned counsels representing the Plaintiff and D1 (as D2 was named as a nominal defendant and it took the position that it will abide by whatever Order that is made by the Court while the 3rd Defendant (‘D3’) was made aware of the suit, but the Plaintiff chose not to serve encl. 1 on D3 as the Plaintiff’s stance was that the Counter Guarantee which was issued by D3 on 10.3.2022 for the Said Sum in favour of D2 (‘CG’) will not be affected, subject to any Order that will be made by the Court) appeared before the court and indicated their clients’ agreement for encls. 1 and 2 to be heard together. [5] In addition, D1 did not object to the Plaintiff’s application for an Ad-Interim Injunction to preserve the status quo pending the disposal of encls. 1 and 2, subject to the usual undertaking by the Plaintiff. An order was accordingly made to this effect. [6] After hearing the Plaintiff's applications on 14.11.2023 and 14.12.2023 which was contested by D1 only, I had on 18.1.2024 allowed the Plaintiff's application in encls. 1 and 2, specifically prayers A(2), B(4), B(5), B(6), B(7), C(9), C(10) and D(11) in encl. 1 with costs of RM20,000.00 to be paid by D1 to the Plaintiff, subject to allocatur. [7] On 19.1.2024, D1 filed a Notice of Appeal against the entire decision. These are my full grounds of judgment for the appeal which is now scheduled for hearing on 29.4.2024. The Cause Papers [8] The cause papers are as follows:

the Plaintiff’s Originating Summons (‘O.S.’) dated 14.7.2023 (encl. 1);

the Plaintiff’s Ex-Parte Notice of Application dated 14.7.2023 (encl. 2);

the Plaintiff’s Affidavit In Support (‘AIS’) affirmed by its Director, Chen Guohua on 14.7.2023 (encls. 3 and 4 in the English language and encl. 11 in the national language);

the Plaintiff’s Certificate of Urgency affirmed by Mohd Rezan Ezra Bin Muhammad Mosinal, an advocate and solicitor in Messrs. Thomas Philip, the erstwhile firm which represented the Plaintiff (encl. 5);

D1’s Affidavit In Reply (‘AIR’) affirmed by its local Director, Kok Jee Yin on 27.7.2023 (encl. 10);

the Plaintiff’s AIR affirmed by the same deponent on 11.8.2023 (encl. 12);

the Plaintiff’s Additional Affidavit affirmed by its Deputy General Manager, Zhu Yanbin on 24.10.2023 (encl. 30); and

D1’s AIR affirmed by the same deponent on 1.11.2023 (encl. 31). Background Facts [9] By way of a Letter of Award dated 30.12.2021 (‘LoA’), D1 had appointed the Plaintiff as its contractor to carry out the works for package “C04A - Sub Structure & Superstructure for K1 and Ancillary Building” (‘Works’) for the contract sum of RM248,288,688.00 in a project known as AT&S Malaysia Construction Project Phase 1, Project No. S-96026 (‘Project’). [10] On 30.12.2022, the Plaintiff and D1 entered into an Agreement for the Works (‘Agreement’) whereby in Clause 3 of the Agreement, the priority of the documents was ranked as, among others, the Agreement, the LoA and the Special Conditions followed further down in the list with the General Conditions of Contract for Supply and Installation Works (‘CoC’) and the Appendices as annexed thereto (collectively referred to as ‘Contract’). [11] Pursuant to Clause 8.1(a) CoC which provides that “Within fourteen

days from the date of the Letter of Award or the date of the Contract (whichever is earlier), the Contractor shall procure a performance bond in the form of a banker’s guarantee… for the due performance of the Contract. …”, the Plaintiff duly procured the PB in the form of a Bank Guarantee issued by D2 with D1 as the named beneficiary. The expiry date of the PB is 30.4.2024. [12] Further, in consideration of the issuance of the PB and at the request of the Plaintiff’s parent company, D3 had issued the CG with a validity period until 15.8.2024. [13] The Plaintiff averred that it was scheduled to mobilise and commence the Works around January 2022, but it was unable to do so as the site possession was not provided by D1 to the Plaintiff. It was additionally averred that, although the Plaintiff attempted to carry out the Works diligently and without delay, it was hindered from doing so as a result of the Covid-19 pandemic, D1’s own actions and other factors beyond its control (see paragraphs 12 - 15, encl. 3). [14] The Plaintiff alleged that, despite the numerous applications for extension of time, these were not assessed properly by D1. [15] D1 countered the Plaintiff’s averments by affirming that the Plaintiff has been struggling from the start to perform its obligations in accordance with the contractual milestones due to poor management and resourcing and financial constraints. These caused serious delays to the Project. [16] On 30.3.2023, D1 issued a Contract Variation Order which sought to –

de-scope the K5 CUB Building from the Plaintiff’s package excluding the underground utility services and piping works; and

de-scope the K10 General Warehouse from the Plaintiff’s package including the underground utility services and piping works (hereinafter collectively referred to as the ‘K5 and K10 Omissions’). [17] The value of the K5 and K10 Omissions is RM74,798,525.57. The Plaintiff asserted that, at all material times, it had disputed the K5 and K10 Omissions. [18] Subsequently, a meeting was held on 10.7.2023 (‘10.7.2023 Meeting’) between the Plaintiff’s and D1’s representatives to address the problems faced in the Project. At the 10.7.2023 Meeting, the Plaintiff presented its slides titled “C01 & C04A Work Analysis and Plan” (‘Presentation Slides’). [19] After the 10.7.2023 Meeting, D1 issued the following to the Plaintiff:

the “Notice of Descoping of Portions of Contract Works” dated 11.7.2023 (‘Notice of Descoping’) to formally notify the Plaintiff of D1’s decision to de-scope, as of 11.7.2023, the K7 Building, Guardhouses and a portion of the K8 and K13 Buildings (‘De-scoped Works’) in accordance with, among others, Clauses 12.1, 13.6, 26.2, 31.1 and 32.4 of the CoC; and

the “Response to JSNT2 C01 & C04A financial review meeting” dated 11.7.2023 (‘Response to Meeting’) where the Minutes of the 10.7.2023 Meeting was attached. [20] On the same date i.e. 11.7.2023, D1 wrote to D2 to demand for payment of the Said Sum to be made by D2 to D1 (‘Letter of Demand’). [21] The Plaintiff was made aware of D1’s demand by D3 due to the counter demand made by D2 on the CG. [22] The Plaintiff then issued the letter dated 13.7.2023 to D1 highlighting, among others, that the Plaintiff was appalled with D1’s decision to call for the PB despite the Plaintiff’s concerted effort to resolve all pending issues regarding the Works for the Project. [23] On the next day, 14.7.2023, the Plaintiff filed the instant suit against the Defendants seeking for, among others, the following orders:

an injunction restraining D1, whether by itself or through its directors, managers, officers, employees, servants, representatives, agents, and/ or otherwise howsoever (‘Other Persons’), from receiving the Said Sum or equivalent in other currency, or any part thereof, under the PB pending the disposal of the Proceedings (see prayer A(2) in encl. 1);

an injunction restraining D2, whether by itself or through Other Persons from, among others –

complying with any demand by D1 to D2 in respect of the PB pending the disposal of the Proceedings (see prayer B(4) in encl. 1);

(ii) releasing the Said Sum, taking any further steps towards realising and/ or causing the crystallisation of D1’s demand on 11.7.2023 under the PB (see prayer B(5) in encl. 1);

(iii) making any further or existing demand on the CG pending the disposal of the Proceedings (see prayer B(6) in encl. 1); and

(iv) receiving the Said Sum under the CG pending the disposal of the Proceedings (see prayer B(7) in encl. 1);

an injunction restraining D3, whether by itself or through Other Persons from, among others –

complying with any demand by D2 to D3 in respect of the CG pending the disposal of the Proceedings (see prayer C(9) in encl. 1); and

(ii) releasing the Said Sum, taking any further steps towards realising and/ or causing the crystallisation of D2’s demand on 11.7.2023 under the CG (see prayer C(10) in encl. 1); and

costs of the injunction application to be borne by the Defendants (see prayer D(11) in encl. 1). The Plaintiff’s Applications in encls. 1 and 2 [24] The Plaintiff’s applications were made pursuant to paragraphs 11(1)(a) and (b) of the Arbitration Act 2005 [Act 646] ('AA 2005'); O. 7, O. 28, O. 29, O. 32 and O. 92, r. 4 of the Rules of Court 2012 ('RC 2012'); and ss 50 and 51 of the Specific Relief Act 1950 [Act 137] ('SRA 1950'). [25] Paragraphs 11(1)(a) and (b) AA 2005 stipulate that: “Arbitration agreement and interim measures by High

11.

A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and the High Court may make the following orders for the party to –

maintain or restore the status quo pending the determination of the dispute;

take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process; …”. [26] Section 11 AA 2005 clearly provides for the concurrent powers of the court and arbitral tribunal in ordering interim measures. The parties can make such a request even before the commencement of arbitration proceedings (see paragraph 11.2 in UNCITRAL Model Law & Arbitration Rules: The Arbitration Act 2005 (Amended 2011 & 2018) and the AIAC Arbitration Rules by Datuk Professor Sundra Rajoo & Special Contributor Dr. Thomas R. Klötzel at p 203). [27] At the hearing of the applications, D1 did not raise any issue with regards to s 11 AA 2005 (see the discussion in paragraphs 20, 22 and 26 in the judgment of the High Court in Panzana Enterprise Sdn Bhd v. Turnpike Synergy Sdn Bhd [2022] MLJU 1000 on whether a plaintiff can rely on the general provisions of O. 92, r. 4 RC 2012, the inherent jurisdiction of the Court and the SRA 1950 in view of of sub-s 11(1) of the AA 2005 as referred by this Court in Eversendai Constructions (M) Sdn. Bhd. v Samsung C&T Corporation UEM Construction JV Sdn. Bhd. [2023] MLJU 2025). [28] Paragraphs 1 and 4 in the PB read as follows: “1. IN CONSIDERATION OF YOU AGREEING TO ENTER INTO A CONTRACT FOR S96026-C04A-LOA-0001 DATED 30 DECEMBER 2021 (“THE CONTRACT”) WITH JSNT2 SDN. BHD. (HEREINAFTER CALLED “CONTRACTOR”) A COMPANY INCORPORATED IN MALAYSIA AND HAVING ITS PRINCIPAL PLACE OF BUSINESS AT D-15-2, SUNWAY NEXIS, NO. 1, JALAN PJU 5/1, KOTA DAMANSARA, 47810, PETALING JAYA, MALAYSIA, WE, BANK OF CHINA (MALAYSIA) BERHAD (511251-V) OF GRD., MEZZ. AND 1ST FLOOR, PLAZA OSK, 25 JALAN AMPANG, 50450 KUALA LUMPUR, MALAYSIA, HEREBY UNCONDITIONALLY AND IRREVOCABLY GUARANTEE TO PAY YOU A MAXIMUM AGRREGATE SUM OF RM24,828,868.80 … (HEREINAFTER CALLED THE “GUARANTEED SUM”) WITHIN 3 BUSINESS DAYS UPON THE RECEIPT BY US OF YOUR WRITTEN DEMAND ADVISING US THAT CONTRACTOR HAS NOT FULFILLED ITS OBLIGATIONS UNDER THE CONTRACT. OUR OBLIGATIONS UNDER THIS PERFORMANCE BOND IS ENFORCED WITHOUT YOU HAVING TO TAKE ANY STEPS OR PROCEEDINGS AGAINST CONTRACTOR. …

THIS PERFORMANCE BOND SHALL BE VALID AND REMAIN IN FULL EFFECT FROM THE ISSUING DATE UNTIL 30 APRIL 2024 (“EXPIRY DATE”). THEREAFTER THIS PERFORMANCE BOND SHALL AUTOMATICALLY BECOME NULL AND VOID EVEN IF IT IS NOT RETURNED TO US FOR CANCELLATION. SHOULD PERFORMANCE BOND BE RETURNED TO US BEFORE THE EXPIRY DATE FOR CANCELATION, OUR LIABILITIES ARE DEEMED FULLY DISCHARGED UNDER THIS PERFORMANCE BOND. WE FURTHER GUARANTEE TO PAY THE SUM REFERRED TO IN CLAUSE 1 UPON RECEIPT OF YOUR WRITTEN NOTICE OF DEMAND AT ANY TIME WITHIN A PERIOD OF THREE (3) MONTHS FROM EXPIRY DATE STATING THAT CONTRACTOR HAS NOT FULFILLED ALL OF ITS OBLIGATIONS UNDER THE CONTRACT. ACCORDINGLY, ALL CLAIMS OR DEMANDS PURSUANT TO THIS PERFORMANCE BOND MUST BE RECEIVED BY THE GUARANTOR’S ON OR BEFORE THREE (3) MONTHS FROM THE EXPIRTY DATE, FAILING WHICH THE GUARANTOR’S LIABILITIES UNDER PERFORMANCE BOND SHALL BECOME NULL AND VOID NOTWITHSTANDING FACT THAT PERFORMANCE BOND MAY NOT HAVE BEEN RETURNED TO THE GUARANTOR FOR CANCELLATION. …”. [29] In paragraphs 2 and 3 of the Letter of Demand, D1 stated that: “2.

We hereby write to notify BOC that the Contractor has failed to fulfil and/or comply with its obligations under the Contract. Accordingly, we call upon the Performance Bond, and DEMAND payment of the sum of Guaranteed Sum of RM24,828,868.80, to be made by BOC immediately and in any event no later than 14th July

…”. [30] Based on the O.S. and AIS, the Plaintiff claimed that D1’s call on the PB and D2’s demand on the CG is invalid, unjustified and unconscionable because –

the PB and CG are secured until 30.4.2024 and 15.8.2024, respectively;

the PB can only be called to recover any liquidated damages (‘LD’) imposed;

D1 unilaterally de-scoped the Plaintiff’s works;

the Plaintiff’s performance of the Works had reached more than 94% completion;

the delays in the progress of the Works are caused by D1’s own conduct or matters beyond the Plaintiff’s control; and

the demand on the PB was made even though the parties were in the midst of negotiations and does not take into account the value of the De-scoped Works. [31] D1 retaliated by stating that its call on the PB is not tainted with any unconscionability for the following reasons:

the Plaintiff repeatedly and persistently failed to fulfil or comply with its obligations under the Contract;

D1 is managing a fast-track Project that has been delayed by the Plaintiff’s poor performance and inability to achieve the Contractual Milestones which exposed D1 to the risk of not achieving its Completeness Certification Certificate within the time stipulated. This necessitated in D1 having to engage third-party contractors to complete the outstanding works and the additional costs incurred needs to be immediately funded by the PB in order to pay the monthly payment certificates;

the Plaintiff has numerous outstanding payments to its vendors that adversely impact the progress of the Project. D1 requires the funds from the PB to pay the vendors for work to carry on;

the Plaintiff has workers that have not been paid for up to four months and were on strike regularly at the Project site from end of June to early July 2023 causing disruptions to the progress of the Project. D1 intends to utilise the funds from the PB to pay them; and

D1 suffered extensive loss and damage as a result of the Plaintiff’s contractual breaches and non-performance, namely liquidated damages of RM37,243,303.20 and costs to be incurred of RM57,031,325.39, which have far exceeded the Said Sum. The Legal Principles [32] Both learned counsels representing the parties cited the same seminal case authority on unconscionability as a separate and distinct ground from fraud to restrain a beneficiary from making a call on a performance bond, namely Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Co Sdn Bhd [2012] 4 MLJ 1 (FC). In that case, Abdull Hamid Embong FCJ in delivering the judgment of the Court laid down the legal principles which may be summarised as follows:

the principle underlying the unconscionability doctrine is the prevention of oppression and unfair conduct;

the determination of unconscionability is fact specific and the courts must consider such a claim on a case by case basis and assess the totality of the circumstances;

clear, manifest or strong evidence of some degree in respect of the alleged unconscionable conduct complained of, and not merely a bare assertion, must be shown before the court can intervene to prevent a beneficiary of a performance bond from making a call on the same; and

the threshold that must be satisfied is that “of a seriously arguable case that the only realistic inference is the existence of unconscionability” or a strong prima facie case. The events or conduct must be of such degree such as to prick the conscience of a reasonable and sensible man. [33] These legal principles have been consistently applied by this Court in several cases, the latest being Eversendai Constructions (supra) which was affirmed by the Court of Appeal on 24.10.2023 [see too, Kejuteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 (CA), KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLC [2020] 3 MLRA 9 (CA), BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] 3 SLR 352 (Singapore Court of Appeal) and paragraph 60 in the case of Panzana Enterprise (supra)]. [34] In KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLC (supra), the Court held, among others, that s 11 AA 2005 confers discretion upon the court to grant any interim measure and the exercise of discretionary power under this provision requires a careful examination of the relevant material facts against the allegations made, with a cautious restrain of determining the dispute in any definitive manner since that is a matter for determination at the arbitration and not for the court. It was further held that: “[51] How unconscionability or fraud is established thus depends on the facts and that would call into question the underlying contractual arrangements between the parties. That crucial document and its terms must be examined. … [52] Although Sumatec and the cases discussed thus far do not concern calls and injunctive reliefs in the context of interim measures pending arbitration invoked under s 11 of the Arbitration Act 2005, we are of the view that the principles apply with equal force but with the caveat that the court must now weigh into consideration the question of whether status quo pending arbitration ought to be maintained or restored; whether some current or imminent harm to the arbitral process needs to be prevented; or any other similar considerations as found in s 11(1)(a) to (e). In fact, as seen from the decisions of Metrod (Singapore) Pte Ltd (supra); Jiwa Harmoni Offshore Sdn Bhd v. Ishi Power Sdn Bhd (supra); Cobrain Holdings Sdn Bhd v. GDP Special Projects Sdn Bhd (supra) and Obnet Sdn Bhd v. Telekom Malaysia Berhad (supra) the courts have already taken that approach that the grant of the particular interim measure must be in aid or support of or to facilitate the arbitration.”. (see too, paragraphs 31 and 32 in KNM Process Systems Sdn Bhd v. Cypark Sdn Bhd [2020] 10 MLJ 321 (HC) at pp 341 - 345 on the interpretation and application of sub-s 11(1) AA 2005 and the test and elements to be fulfilled for the court to exercise its discretion to grant the injunctive relief sought). Analysis & Findings - 1st Issue: Whether D1 had acted in breach of s 410 CA 2016 [35] As mentioned at the start of this judgment, the Plaintiff raised a novel argument that, in calling for the PB, D1 had acted in breach of s 410 CA 2016 as the PB is security over the Plaintiff’s property and in view of the Plaintiff’s application for JM in the Shah Alam High Court (‘SAHC’) on 8.9.2023 vide Case No.: BA-28JM-4-09/2023, D1 should have obtained leave from the SAHC before enforcing the security. [36] The facts pertaining to the JM were allowed to be affirmed by way of additional affidavits (see encls. 30 and 31) after D1 agreed to the Plaintiff’s application in encl. 25 for, among others, leave to file an additional affidavit in respect of the JM and order in terms of encl. was granted accordingly. [37] After giving due consideration to the affidavit evidence and submissions of the parties, I was not convinced by the Plaintiff's arguments on s 410 CA 2016 and the need for leave of the SAHC to be obtained before a call on the PB can be made. [38] The decision to allow the Plaintiff’s application for injunctive reliefs were primarily due to my finding that D1’s call on the PB is unconscionable. As I did not accept the Plaintiff’s submission on the JM related issue and my findings on this point are not the subject of the upcoming appeal, the contention of the parties and my reasons for favoring D1’s submission will not be discussed in depth. [39] Section 410 CA 2016 reads as follows: “Effect of application for a judicial management order

During the period beginning with the making of an application for a judicial management order and ending with the making of such an order or the dismissal of the application ―

no resolution shall be passed or order made for the winding up of the company;

no steps shall be taken to enforce any charge on or security over the company’s property or to repossess any goods in the company’s possession under any hire purchase agreement, chattels leasing agreement or retention of title agreement, except with leave of the Court and subject to such terms as the Court may impose; and

no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with leave of the Court and subject to such terms as the Court may impose.”. [40] The definition of “property” in s 2, sub-s 411(4) and s 426 of the CA 2016 are also relevant: “Interpretation

… “property”, in relation to a corporation, includes land, money, goods, chose in action, things in action, goodwill and every valuable thing, whether corporal or incorporeal, movable or immovable, and whether situated in Malaysia or elsewhere and also includes obligations, servitudes, and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to the property;”. “Effect of judicial management order

…

During the period for which a judicial management order is in force ―

no resolution shall be passed or order made for the winding up of the company;

no receiver or receiver and manager of the kind referred to in section 374 shall be appointed;

no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with the consent of the judicial manager or with the leave of the Court and, if the Court grants leave, subject to such terms as the Court may impose;

no steps shall be taken to enforce security over the company's property or to repossess any goods in the company's possession under any hire purchase agreement, chattels leasing agreement or retention of title agreement, except with consent of the judicial manager or leave of the Court and subject to such terms as the Court may impose; and

no steps shall be taken to transfer any share of the company or to alter the status of any member of the company except with the leave of the Court and, if the Court grants leave, subject to such terms as the Court may impose.”. “Undue preference in judicial management

(1) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which is unable to pay its debts as the debts become due, from the company’s own money in favour of any creditor or any person in trust of any creditor with the intention to give such creditor a preference over other creditors shall be void in the event of the company being placed under judicial management on an application for a judicial management order presented within six months from the date of making, taking, paying or suffering the transfer, mortgage, delivery of goods, payment, execution and every such act.

Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the company placed under the judicial management.”. [41] D1 did not dispute the fact as to the filing of the JM application at the SAHC on 8.9.2023 and that the first case management was fixed on 31.10.2023. [42] At the hearing, Mr. Harjinder Singh strenuously argued for the Plaintiff that –

the PB is –

a form of security and this was admitted by D1 in paragraph 7 of encl. 31 when D1 averred that “The Performance Bond is a security issued by the Plaintiff to the 1st Defendant for the Plaintiff’s performance of its obligations under the

(ii) a security premised on the Plaintiff’s “property” as defined in s 2 CA 2016, namely, “money”;

applying the decision of the Singapore Court of Appeal in Electro Magnetic (S) Ltd (under judicial management) v Development Bank of Singapore Ltd [1994] SGCA 33 where –

s 227C(b) and 227D(4)(d) of the Companies Act (Cap 50, 1990 Rev Ed) are in pari materia with s 410 and sub-s 411(4) of the CA 2016; and

(ii) the court held that a lien was in the nature of a security and was essentially a passive right of retention which did not bestow on the holder of the lien a power of sale. Mere assertion of a lien over a property in the face of demand by the owner thereof was an act of enforcing the lien. The respondent bank, in refusing to hand over the bills to the appellant on the latter’s demand, asserted the lien it had on the bills. The respondent bank was in effect enforcing its security and it could only have done so with leave of the court. However, they did not do so, and in consequence they had acted in breach of ss 227C(b) and 227D(4)(d) of the Companies Act, by calling on the PB during the pendency of the JM proceedings, D1 is in fact enforcing the security against the Plaintiff’s property;

(iii) by enforcing the security i.e. calling for the PB without leave of the SAHC, D1 had acted in breach of paragraph 410(1)(b) CA 2016; and

(iv) the call for PB under the present circumstances amounts to undue preference to D1 which is in breach of s 426 CA 2016. [43] Consequent to the Plaintiff’s reliance on the judgment in Electro Magnetic (supra) and the Companies Act (Cap 50, 1990 Rev Ed), the learned counsels were directed to do further research on foreign case law and the statutory provisions in other common law countries which could provide guidance as to date, no local cases have dealt with the issue at hand. [44] Mr. HK Niak’s research resulted in a comparative table between the JM mechanism in Malaysia (ss 403 - 430 CA 2016) and Singapore (ss 8 - 118 of the Insolvency, Restructuring and Dissolution Act 2018) and the similar mechanism in the United Kingdom and India under the Moratorium, Corporate Insolvency and Governance Act 2020 and Corporate Insolvency Resolution Process, the Insolvency and Bankruptcy Code 2016 (‘2016 Indian Code’), respectively (see ANNEXURE A to D1’s Supplemental Written Submissions, encl. 41). [45] D1’s counsel referred to the decision of the Supreme Court of India in State Bank of India v V. Ramakrishnan & Anor. Civil Appeal No. 3595 of 2018 where it was held that the moratorium provided under s 14 of the 2016 Indian Code (which is worded differently from s 410 CA 2016) does not intend to bar actions against assets of guarantors to the debts of the corporate debtor during the moratorium period for reasons, among others, that the assets of the surety are separate from those of the corporate debtor; if there is a stay to realise the guarantees given by a third party, there may be frivolous applications filed to prevent the realisation of such guarantees; and the contractual principles of guarantee should be respected even during a moratorium. [46] However, as submitted by the Plaintiff, there is no JM mechanism in India and to my observation, the singular notable feature of the 2016 Indian Code for present purposes is the fact that the proviso to the definition of “security interest” in s 3 expressly provides that “security interest shall not include a performance guarantee”. In contrast, s 410 CA 2016 does not expressly provide that a performance bond or bank guarantee such as the PB in this case is not security over a company’s property. [47] What I did find instructive was the excerpts by Mr. HK Niak from the following textbooks regarding bank guarantees in general and the meaning of the word “security”: Banking Law, Fifth Edition, LexisNexis, 2019 by Professor Datin Dr Lee Mei Pheng, Datuk Detta Samen and Ivan Jeron Detta, paragraph 7.6.1 at pp 1001 - 1003: “One of the commonly used trade finance facilities and commercial instruments is the bank (or banker’s) guarantee. Basically, a bank guarantee is a guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. … By issuing the guarantee, the bank offers a security to the “beneficiary” that is separate from the principal’s ability or will to fulfil his part of the contract. For example, a guarantee can be issued to secure the repayment of an advance payment if delivery does not take place. Bank guarantees can also be used to secure performance under a contract. Such a guarantee does not however mean that the bank completes the project in the event of non-performance. Instead, the bank’s undertaking is a payment obligation. Funds are then available to the beneficiary to enable him to, for example, complete the project with another party.” (emphasis added). The Law and Practice of Corporate Insolvency in Malaysia, Sweet & Maxwell, 2019 by Rabindra S Nathan and a team of expert contributors, paragraph 4.022 at p 72: “1. Enforcement of Charge, security or possession of goods [4.022] A charge is defined “to include mortgage and any agreement to give or execute a charge or mortgage or whether upon demand or otherwise”. There is no definition of “security” under the Companies Act 2016. In Bristol Airport v Powdrill, “security” was defined as follows: Security is created where a person (“the creditor”) to whom an obligation is owed by another (“the debtor”) by statute or contract, in addition to the personal promise of the debtor to discharge the obligation, obtains rights exercisable against some property in which the debtor has an interest in order to enforce the discharge of the debtor’s obligation to the creditor …” (emphasis added). [48] I would add the illuminating passages in Chapter 11 on “Performance Bonds” from the renowned book Law and Practice Of Construction Contracts, Fifth Edition, Volume 1, Sweet & Maxwell, 2018 by Chow Kok Fong, particularly at p 764 where the relationship of the parties to the performance bond and the underlying contract is explained in these words: “11.005 The parties to the bond or guarantee are the obligor and the obligee. The obligor may be a bank or an insurance company who charges a fee for issuing the bond or guarantee. The contractor whose performance is to be secured by the bond is not a party to the agreement which constitutes the bond but the obligor will invariably require an indemnity from the contractor.” (see too, subparagraph 18(a) in Sumatec’s case (supra) which referred to the autonomy principle – “the guarantee constitutes a separate contract from the underlying transaction between the account party and the beneficiary; its privity being only between the beneficiary and the issuing bank.” and paragraph 38 in Panzana Enterprise (supra), both as cited by the learned counsel for D1. See too, Chapter 8 on “Performance Bonds And Insurances” in Lam On Construction Claims In Malaysia, Lexis Nexis, 2020 by Lam Wai Loon, Serene Hiew Mun Yi, Amy Hiew Kar Yi and Ooi Hui Ying, especially at paragraph 8-7, p 212 on the doctrine of autonomy). [49] Based on the parties’ submissions and my own understanding of the nature of performance bonds, I was not convinced by the Plaintiff’s arguments that the PB is “security over the Plaintiff’s property” i.e. money and that, by calling for the PB, D1 was enforcing the security without leave of the SAHC, thereby D1 had acted in breach of paragraph 410(1)(b) CA 2016. My reasons are as follows:

the Plaintiff merely submitted as to subparagraph 7(b) in encl. and omitted to mention subparagraph 7(a) where D1 specifically affirmed that the PB is not the property of the Plaintiff;

on a true construction of the words used in the PB, D2 is liable to pay D1 the Said Sum when D1 makes a demand on the PB in the manner provided in the PB, without the need for D1 to prove the Plaintiff’s breach of the Contract. In other words, the PB is an on-demand bond;

the PB is not a security over the Plaintiff’s property but rather, it is a contractual obligation given by D2 to D1 to secure the Plaintiff’s performance under the Contract for the Project, failing which, D1 has the right to demand that D2 fulfils its payment obligations to D1 according to the terms of the PB;

the PB belongs to D1 as it is assignable by D1 to a third party subject to D2’s prior written consent, which should not be unreasonably withheld or delayed (see paragraph 5 of the PB);

in Electro Magnetic, the issue is as to whether the bank may assert its lien over the bills of a company that was under JM. It provides guidance that a stay will only be granted if the action is between the bank and the company that is under JM and not on the question as to whether a performance bond is equivalent to the property of the company that is under JM. If a paragraph 410(1)(b) CA 2016 stay was to be allowed, it only applies when D3 begins recovery proceedings against the Plaintiff; and

s 426 CA 2016 has no application because the payment under the PB is by D2 and not “from the company’s own money”. - Whether D1’s call on the PB is unconscionable [50] The Plaintiff’s grounds for asserting that the call on the PB by D1 is unconscionable are as set out in paragraph 30 above. [51] Firstly, it must be made clear that I did not accept the Plaintiff’s submission that the PB is a conditional bond (see subparagraph 49 (b) above). Following from this finding, I did not consider the Plaintiff’s submissions that there are serious questions to be tried and that the balance of convenience tilts in favor of the Plaintiff because these are irrelevant considerations in determining whether the Plaintiff’s applications should be allowed or otherwise. In Eversendai Constructions (supra), this Court said: “[89] In BGMC Corporation Sdn Bhd v MRCB Builders Sdn Bhd & Ors [2022] MLJU 2458 (the decision was affirmed by the Court of Appeal on 13.1.2023), this Court said: “[58] Mr. Muhammad Faisal had rightly referred to the judgment of the Court of Appeal in East Coast Economic Region Development Council v Inai Kiara Sdn Bhd & Anor and another appeal [2019] MLJU 1251 and in particular, the following excerpt: “[41] It has been held that in an application to restrain an on demand performance bond, ‘serious issue to be tried’ is not one of the grounds upon which a court may grant an injunction against the beneficiary to stop payment by a bank under a performance bond: Deutsche Ruckversicherung v Walbrook Insurance Co Ltd & Ors [1995] 1 WLR

The ‘balance of convenience’ principle is also not applicable: see Howe Richardson Scale Co Ltd v PolimexCekap and National Westminster Bank Ltd [1978] 1 Lloyd’s Rep 161; LEC Contractors (M) Sdn Bhd (formerly known as Lotterworld Engineering & Construction Sdn Bhd) v Castle In Sdn Bhd [2000] 3 MLJ 339. An ongoing arbitration between the parties is also not a reason to stop the call on the performance bond: Bocotra Construction Pte Ltd v AG [1994] 3 SLR(R) 723.”. (see too, the Court of Appeal decision in Petrodar Operating Co Ltd v. Nam Fatt Corporation Bhd & Anor [2012] 8 CLJ 311 and affirmed by the Federal Court in [2014] 1 CLJ 18). [59] The Plaintiff had similarly taken the same position that in applications such as the present, unconscionability is the sole criterion and enquiries as to where the balance of convenience lies and whether there are serious issues to be tried and damages will be an adequate remedy are irrelevant in determining whether to grant an injunction against a beneficiary to stop payment by a bank under a performance bond …”. [90] As this Court is bound by the doctrine of stare decisis, the balance of convenience principle does not fall for consideration at all as the BG in this case clearly falls within the category of an “on demand” bond.”. [52] Secondly, I also agree with the position taken by D1 with regards to the allegations of delay in the progress of the Works, namely that this is a dispute which arises under the Contract and should appropriately be dealt with in the arbitration proceedings. In fact, on 14.7.2023, when this case was first called up before the Court, the Plaintiff’s counsel had submitted that contractual matters, such as on the issue of delay, should be resolved in the arbitration. Genuine contractual disputes should not be elevated to the level of unconscionable conduct by D1 in calling on the PB [see Ranhill E&C Sdn Bhd v Thyssenkrupp Indusries (M) Sdn Bhd & Anor [2016] 9 MLJ 703, Prestij Mega Construction Sdn Bhd v. Macly Assets Sdn Bhd [2020] 1 LNS 627, AFS Engineering (M) Sdn Bhd v MRCB Builders Sdn Bhd [2020] MLJU 2118 (the appeal against this decision was dismissed on 22.11.2021), ETEC E & C (M) Sdn Bhd v Dindings Poultry Processing Sdn Bhd [2021] MLJU 305 (the appeal was dismissed on 15.2.2022)and BGMC Corporation Sdn Bhd v MRCB Builders Sdn Bhd & Ors [2022] MLJU 2458 (the appeal was dismissed on 13.1.2023)]. [53] Similarly, the arguments and counter-arguments as to the percentage of works which have been completed by the Plaintiff in respect of each building as at the 10.7.2023 Meeting are matters to be determined by the arbitral tribunal. [54] Thirdly, I rejected the Plaintiff’s contention that, under the Contract, D1 is entitled to drawdown on the PB only under Clause 33.1(b), which is contingent on D1’s entitlement to impose LD under Clause 33.1(a). [55] Clause 33.1 states as follows: “Liquidated Damages

33.1 (a) If the Contractor fails to complete the Works within the Time for Completion or any extension granted thereto pursuant to Clause 32.1, the Contractor shall pay the Purchaser liquidated damages calculated at the rate or rates stated in the Special Conditions for the period during which the Works remain incomplete. The aggregate amount of liquidated damages imposed on the Contractor shall not exceed the limit of liquidated damages (if any) as stated in the Special Conditions. The provisions of this Clause shall apply, with the necessary changes being made, to any Section or milestone of the Works for which a rate of liquidated damages is provided in the Special Conditions.

The Purchaser may, without prejudice to any other method of recovery:

deduct the amount of such liquidated damages from any monies that are due, or will become due, to the Contractor; and/or

(ii) draw on the Performance Bond issued by the Contractor as the case may be.

The payment or deduction of such damages shall not relieve the Contractor from:

his obligation to complete the Works; or

(ii) from any other of his responsibilities, obligations and liabilities under the Contract.

At any time after the Purchaser has become entitled to liquidated damages, the Purchaser may give notice to the Contractor under Sub-clause 48.1 (Default), requiring the Contractor to complete the Works or Section (as the case may be) within a further specified time. Such a notice shall not prejudice the Purchaser's rights which may accrue or may have accrued under this Clause 33 or Clause 48.”. [56] The PB was clearly provided to secure the due performance of the Plaintiff’s obligations under the Contract, the liability to pay LD is one such obligation. Hence, the fact that D1’s demand dated 11.7.2023 did not mention that D1 was entitled to drawdown on the PB under Clause 33.1(b) of the Contract does not support the Plaintiff’s contention that D1’s reason for calling on the PB is unlawful, wrongful or improper. [57] I agree with D1’s submission that contractual terms must be read so as to give commercial sense. In this case, it is contrary to commercial sense and the intention of the parties to read the provisions of the Contract in a way that the only context in which a call can be made on the PB is where there is LD for delay. [58] Proceeding next to the Plaintiff’s submission that the demand on the PB is unconscionable as the parties were still in the midst of negotiations, it is necessary to have a full appreciation of the events which occurred in July 2023. [59] As outlined previously, the parties were confronted with differences and disputes over the Works for the Project, and this led to the 10.7.2023 Meeting between the parties. [60] The contents of the Plaintiff’s Presentation Slides covered the “Project Progress”, “Problems & Solutions”, “Suggestion” and “Progress Plan For Next Stage”. With regards to the “Site Progress”, the Plaintiff reported that it “had finished more than 94%” whereby for –

K1 and K20, it was 100% completed at the price of RM113,940,306.00 and RM8,586,484.00, respectively, and with only defects rectifications left to do. The Plaintiff stated that K1 and K20 “will be finished in 20 days (including defects rectification)”;

K8, it was 70% completed at the price of RM7,180,069.00;

K13, 85% completed at the price of RM3,849,145.00 (the Plaintiff stated that “K8 & K13 will be finished in 2 months”); and

K7, no works have been carried out at all and the price involved is RM3,579,323.00 and the same for Guard House (‘GH’) at the price of RM450,381.00. The total price of RM4,029,705 (sic) was said to be 3% of the total contract value. [61] Further, the Plaintiff conceded in the Presentation Slides that it was facing problems relating to the “Salary for Workers and Management”, “Debit for Machinery and Sub-contractors”, “Court cases” and “Funding Support”, in short that it had cash flow problems and was unable to finish the whole C04A package. Hence, the Plaintiff suggested, among others, that: “JSNT2 can keep C04A Performance Bond • JSNT2 able to afford the cost and finish K1, K8, K13, K20 and dismantle the tower crane. • EXYTE agree to descope K7 & GHs to JSNT2 appointed sub-contractor.”. [62] On the next day, D1 issued the Notice of Descoping to the Plaintiff in the following terms: “1. We write to formally notify you of our decision to de-scope, as of the date of this letter, the following portions of the Contract works, in accordance with the Contract, including but not limited to Clauses 12.1, 13.6, 26.2,

31.1 and 32.4 of the Contract: a. K7 building; b. Guardhouse(s); and c. A portion of the K8 and K13 buildings (collectively, the "De-scoped Works").

The details of the De-scoped Works and its financial particulars will be set out in the Variation Order which will be issued to JSNT2 in due course of time.

This decision is made in the circumstances of (i) the numerous and persistent delays encountered in JSNT2's progress of its works under the Contract; and

(ii) JSNT2's continued financial struggles, which have seriously impeded and continue to impede its ability to execute its works in accordance with the Contract. We attach, for your reference, the milestone tracker indicating JSNT2's slow progress to date. Notwithstanding our repeated requests, and the various forms of assistance rendered to JSNT2, JSNT2 has failed to provide any convincing resolution to the matters identified above.

In these circumstances, in order to prevent further delays and the resultant consequential effect on the Project, a third-party contractor shall be engaged to carry out and complete the De-scoped Works. All costs reasonably incurred in this regard will be administered as a back charge to JSNT2. …

Moving forward, please also note the following: a. With respect to the K8 and K13 buildings, JSNT2 is required to vacate these work areas and shall provide full access to the third-party contractor for their commencement of the works, no later than 12 July 2023. b. JSNT2 must clear all materials from their laydown area by 12 July 2023. c. We will contact you shortly to organise a joint measurement of the works completed by JSNT2 in K8 and K13 Buildings. If JSNT2 should fail to turn up for the measurement, then Exyte will proceed to measure and determine the extent of completed works and outstanding works. d. Please return the originals of all works inspection reports ("WIRS") as soon as possible and in any event no later than 12 July 2023. e. To minimize the financial impact on JSNT2, only if suitable, any available plant or equipment in the K8 and K13 work area shall be used to progress works by newly appointed third-party contractor. f. JSNT2 must remove all their stored materials from site that relates to K8 and K13 Buildings.

Please confirm acknowledgement and acceptance of the above by way of return of the enclosed acknowledgement copy by 12 July 2023.

All our rights under the Contract and/or law are fully reserved.”. [63] Based on paragraph 1 of the Notice of Descoping as above quoted, clearly, D1 had accepted the Plaintiff’s proposal to de-scope K7 and GH and had rejected the suggestion for the Plaintiff to finish K8 and K13. D1’s reply to the Plaintiff’s recommendation for part of the Plaintiff’s works to be de-scoped can be found in the Response to Meeting wherein it was stated, inter alia, that: “5. We agree that JSNT2 is not in a position to complete C04A. As such, notwithstanding JSNT2’s contractual obligations under the sub-contract, we agree with JNST2's request to descope.

Exyte will descope the outstanding works of K8, K13, K7 and Guardhouses from the C04a contract, in order to avoid further delays and in the hope that by doing so these facilities can be completed in a timely manner, so as not to impact the CCC dates.

In this regard, we would add that JSNT2 have provided no details on the schedule and the 2 months provided to complete K8/K13 is unrealistic including leak testing, based on your current performance with such works.

In order to ensure a smooth handover, please advise who will be the authorized representative on site for JSNT2 going forward to finalise the outstanding C04a works. Please also obtain the necessary authorization from your Mr Chen Guohua as evidence of the same.”. [64] Judging by the Notice of Descoping and the Response to Meeting, D1 has apparently accepted that K1 and K20 to the value of RM122,526,790.00 have been fully completed by the Plaintiff and that the outstanding works for K8 and K13 are to be de-scoped together with K7 and GH (see the pie chart on the site progress in the Presentation Slides at p 619, encl. 4). [65] In Clause 1.1(dd) of the CoC, the “Time for Completion” is defined to mean “Time for Completion’ means the period of time for completion of the Works or any Section thereof as stated in the Contract or as extended under Sub-clause 32.1 (Extension of Time for Completion) calculated from the date specified in the Contract as the date for commencement of the Works.”. [66] In the Appendix to the Tender Documents on the “Key Project Milestones: Part 2 Technical Specification”, 30.4.2024 is stated as the date for Final Acceptance. The CoC sets out the procedure for the carrying out of testing and commissioning to the Works or a Section to certify the Works or Section meet the requirements and performances as specified in the Contract Documents (see, among others, Clause 27 - 30 and Clause 31.1 on “Time for Completion” which reads “Subject to any requirement under the Contract for the completion of any Section or part of the Works before the whole of the Works is completed, the Contractor shall ensure that the Works are completed and pass the Tests on Completion within the Time for Completion as stated in (D) PROGRAMME/TIME SCHEDULE as the case may be.”). [67] Under the Special Conditions in respect of Clause 28.2 on “Final Acceptance”, the “Final Acceptance Certificate shall be issued to the Contractor upon acceptance of the complete project by the Owner and recommended by the Purchaser”. The “PROGRAMME / TIME SCHEDULE” stipulates that: “The duration given herein for the various works shall be fixed and the Contractor is required to complete all works within the specified duration. The Contractor is to note the above major milestone dates and ensure completion of the works as indicated. Liquidated damages shall be imposed exclusively for failing to complete the works within the specified duration. MAJOR MILESTONE DATES Please refer to Part 2 Technical Specification”. [68] It is noted that, as at 11.7.2023, D1 did not issue any letter or notice to the Plaintiff asserting its entitlement to impose LD and nor has the Plaintiff been imposed with LD. [69] It is in these circumstances that D1 made the call on the PB. The Plaintiff, upon being made aware of D1’s demand by D3, immediately wrote to D1 on 13.7.2023 stating, among others, that: “… Further to your letter, we are now informed that despite the ongoing negotiation between parties to obtain a final solution on the issues raised during the meeting held on 10-7-2023, you have nonetheless decided to call for the Performance Bond dated 11-3-2022 in respect of Project CO4A. We are appalled with your decision to call for the said Performance Bond despite our concerted effort to resolve all pending issues regarding Project Co4A. During the numerous meetings held between parties, we had detailed and sincerely highlighted and proposed to you our method of resolution which is favourable to all parties. In that regard, our shareholder had issued letter dated 12-7-2023, providing you with the timeline and amount to be injected to resolve the pending financial issues and also a change in management structure. As you aware the work proposed to be descoped only involves 5% of the total project. Hence, it is unfair and unconscionable to now call for the Performance Bond of RM25 million. We emphasise that the delay in the completion of work involves various factor, most of which is beyond our control. Nonetheless and despite all the problems faced to date, we have managed to complete almost 95% of the total project based on your demands and expectation. Whilst we accept that you have to fulfil your obligations as the Main Contractor, we urge upon to also consider our predicament and reconsider your decision to call for the Performance Bond. Based on the above, we hereby seek your indulgence to withdraw your decision to call for the Performance Bond and we are willing to consider any alternative solution to the calling of the Performance Bond. ...”. [70] D1 contended that –

despite numerous reminders and assistance provided by D1 to the Plaintiff to meet the Contractual Milestones, which includes descoping part of the Plaintiff’s works, the Plaintiff was still unable to maintain work progress at the acceptable level. In addition, there were quality issues in the Plaintiff’s work which required immediate rectification by the Plaintiff;

due to the Plaintiff’s financial constraints, lack of resources and manpower, no substantial works were carried out by the Plaintiff after 3.5.2023 at the site;

following from the admitted cashflow issues which have been plaguing the Plaintiff from the start of the Project, D1’s confidence in the success of the Plaintiff’s funding model is low and it appears that the Plaintiff’s business continuity is at serious risk and will hamper the Plaintiff’s ability to perform consistently or at all;

despite having issued various notifications to the Plaintiff regarding the Plaintiff’s serious milestones delay in the Project, no feasible remedial actions were taken by the Plaintiff during the weekly site meetings. The milestones delay in the Project has resulted in the maximum limit of LD payable under Clause 33 CoC in the sum of RM37,243,303.20; and

the Plaintiff’s failure to meet its obligation deadlines have cascaded to other subsequent works to be delayed and D1 had to assist the Plaintiff by making direct payments to the Plaintiff’s sub-contractors on numerous occasions, thereby causing further costs to be incurred by D1. As of 11.7.2023, D1 had incurred costs of at least RM16,990,600.55 to assist the Plaintiff in the progress of the Plaintiff’s works and it was estimated that a total of cost of RM57,031,325.39 will be incurred by D1 to assist the Plaintiff in completing the works on time. [71] In so far as the descoping of works for the K5 CUB Building, excluding underground utility services and piping works, and the K10 General Warehouse from the Plaintiff’s C04A package is concerned, the Plaintiff had agreed and accepted the same as evidenced by the signature of its representative on 31.3.2023 and the company chop on the Contract Variation Order and Deduction Notification, both dated 30.3.2023 (see exhibit “D-13”, encl. 10). [72] However, having considered the events which took place in July 2023 and the fact that the parties were in the midst of negotiations, in my considered view, the Plaintiff has discharged the legal and evidential burden to satisfy the Court to exercise its discretionary power to grant the interim measure sought under paragraph 11(1)(a) of the AA 2005 to maintain the status quo pending the determination of the dispute by the arbitral tribunal. [73] The Plaintiff had candidly detailed the problems in the performance of its obligations under the Contract and offered suggestions to resolve the same. These matters were discussed at length at the 10.7.2023 Meeting. The Plaintiff’s proposals for it to retain the PB included the suggestion that it be allowed to finish K1 and K20 and to descope K7 and GH, which was accepted by D1 (see the Presentation Slides at p 627, encl. 4). Moreover, up until July 2023, D1 did not expressly indicate its entitlement to enforce the contractual provision on LD and no LD has in fact been imposed on the Plaintiff. [74] In the upshot, the Plaintiff has placed sufficient evidence before the Court such that the Court is satisfied, not necessarily beyond reasonable doubt, that a case of unconscionability was committed by D1 to an extent which is sufficient for the Court to be minded to grant the reliefs sought by the Plaintiff. I am satisfied that the events or D1’s conduct are of such degree such as to prick the conscience of a reasonable and sensible man and that the call on the PB by D1 in the circumstances of this case is unconscionable. Conclusion [75] Based on the foregoing reasons, the Plaintiff's applications in encls. and 2 were allowed where RM20,000.00, which was offered by D1 as costs was accepted by the Plaintiff, was ordered to be paid by D1 to the Plaintiff, subject to allocatur. [76] The Plaintiff did not seek costs against D2 and D3 as they were only nominal Defendants and therefore, no order was made on costs in respect of D2 and D3. Dated: 29 February 2024 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Harjinder Singh a/l Kuldip Singh (Premjit Singh with him) Messrs. Prem & Associates Advocates & Solicitors B-21-3, Tower B Vertical Business Suite, Avenue 3 Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur For the 1st Defendant: Niak Hiong Keong (Jimmy Lim with him) Messrs. Christopher & Lee Ong Advocates & Solicitors Level 22, Axiata Tower No. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur For the 2nd Defendant: Karen Tan Messrs. Skrine Advocates & Solicitors Level 8, Wisma UOA Damansara 50, Jalan Dungun Damansara Heights 50490 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: AFS Engineering (M) Sdn Bhd v MRCB Builders Sdn Bhd [2020] MLJU 2118 Ahmad Zaki Sdn Bhd v SN Akmida Holdings [2021] MLJU 644 BGMC Corporation Sdn Bhd v Sime Darby Property (KL East) Sdn Bhd [2022] 1 LNS 2340 BGMC Corporation Sdn Bhd v MRCB Builders Sdn Bhd & Ors [2022] MLJU 2458 Bina Jaya Mantap Sdn Bhd v Institute of Technology Petronas Sdn Bhd [2014] 11 MLJ 352 Boustead Singapore Ltd v Arab Banking Corp (B.S.C.) [2015] SGHC 63 BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] 3 SLR 352 Cex v Cey and another [2021] 3 SLR 571 China Airlines Ltd v Maltran Air Corp Sdn Bhd (Formerly Known As Maltran Air Services Corp Sdn Bhd) And Another Appeal [1996] 2 MLJ 517 China Construction Pearl River (M) Sdn Bhd v Industrial and Commercial Bank of China (Malaysia) Sdn Bhd & Anor [2022] 7 CLJ 211 CIMB Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd & Anor [2019] MLJU 148 Cygal Bhd v. Bandar Subang Sdn Bhd [2004] 3 CLJ 67 Dunggon Jaya Sdn Bhd v Aeropod Sdn Bhd & Anor and Another Appeal [2019] MLJU 392 Electro Magnetic (S) Ltd v Development Bank of Singapore Ltd [1994] 1 SLR 734 Esso Petroleum Malaysia Inc v. Kago Petroleum Sdn Bhd [1995] 1 CLJ 283 ETEC E & C (M) Sdn Bhd v Dindings Poultry Processing Sdn Bhd [2021] MLJU 305 Exxobite Sdn Bhd v Value Plus Industria Sdn Bhd [2022] MLRHU 1581 Eversendai Constructions (M) Sdn. Bhd. v Samsung C&T Corporation UEM Construction JV Sdn. Bhd. [2023] MLJU 2025 Flyglobal Charter Sdn Bhd & Alfajr Travel & Tours Sdn Bhd & Another Appeal [2023] 2 CLJ 888 Granstep Development Sdn Bhd v Tan Chong Heng Construction Sdn Bhd & Other cases [2021] MLRHU 1967 ICICI Bank Ltd v Interim Resolution Professional for Ruchi Soya Industries Ltd., Company Appeal No. 390 of 2018 Indian Overseas Bank v Mr. Dinkar T. Venkatsubramaniam Resolution Professional for Amtek Auto Ltd., Company Appeal No. 267 of 2017 JBE Properties Pte Ltd v Gammon Pte Ltd [2011] 2 SLR 47 Keet Gerald Francis Boel John v Mohd. Noor Bin Adbullah [1995] 1 MLJ 193 Kejuruteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 (CA) KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Lubricating Company LLC [2020] 3 MLRA 9 (CA) KNM Process Systems Sdn Bhd v. Cypark Sdn Bhd [2020] 10 MLJ 321 (HC) Kumpulan Liziz Sdn Bhd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd [2022] 1 MLJ 570 Malaysian Refining Company Sdn Bhd v Sumatec Engineering and Construction Sdn Bhd [2011] 7 CLJ MCC Overseas (M) Sdn Bhd v Malayan Banking Berhad & Ors [2021]1 LNS 851 Panzana Enterprise Sdn Bhd v. Turnpike Synergy Sdn Bhd [2022] MLJU 1000 Prestij Mega Construction Sdn Bhd v. Macly Assets Sdn Bhd [2020] 1 LNS 627 Ranhill E&C Sdn Bhd v Thyssenkrupp Indusries (M) Sdn Bhd & Anor [2016] 9 MLJ 703 Sin Soon Hock Sdn Bhd [2020] 1 LNS 976 Sinohydro Corporation (M) Sdn Bhd v Golden Horse Rubber Corporation [2020] MLJU 191 State Bank of India v V. Ramakrishnan & Anr. Civil Appeal No. 3595 of 2018, Supreme Court of India Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Company Sdn Bhd [2012] 3 CLJ 401; [2012] 4 MLJ 1 Syarikat Ong Yoke Lin Sdn Bhd v Grand Dynamic Builders Sdn Bhd [2023] MLJU 1490 Syed Ibrahim & Co v Trans Fame Offshore Sdn Bhd; BAP Resources Sdn Bhd & Ors (Interveners) [2022] MLRHU 1214 Tahan Steel Corp Sdn Bhd v Bank Islam Malaysia Bhd [2012] 2 MLJ 314 Target Resources Sdn Bhd v THP Bina Sdn Bhd [2019] 7 CLJ 633 Legislation: Arbitration Act 2005, s 11 Companies Act 2016, ss 2, 227C, 227D, 410, 411, 426 & 588 Companies Act (Cap 50, 1990 Rev Ed), (Singapore), ss 227(C) & 227D Corporate Insolvency and Governance Act 2020 (UK) Insolvency, Restructuring and Dissolution Act 2018, s 95 Rules of Court 2012, O. 7, O. 28, O. 29, O. 32 & O. 92, r. Specific Relief Act 1950, ss 50 & 51 The Financial Collateral Arrangements (No. 2) Regulations 2003 The Financial Markets and Insolvency (Settlement Finality) Regulations 1999 The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (India) The Insolvency and Bankruptcy Code, 2016 (India) Other source(s) referred to: Chow Kok Fong, Law and Practice of Construction Contracts, Fifth Edition, Volume 1, Sweet & Maxwell, 2018 Datuk Professor Sundra Rajoo & Special Contributor Dr. Thomas R. Klötzel, UNCITRAL Model Law & Arbitration Rules: The Arbitration Act 2005 (Amended 2011 & 2018) and the AIAC Arbitration Rules, Sweet & Maxwell, 2018 Lam Wai Loon, Serene Hiew Mun Yi, Amy Hiew Kar Yi, Ooi Hui Ying, Lam on Construction Claims in Malaysia, LexisNexis, 2022 Professor Datin Dr Lee Mei Pheng, Datuk Detta Samen and Ivan Jeron Detta, Banking Law, Fifth Edition, LexisNexis, 2019 Rabindra S Nathan and a team of expert contributors, The Law and Practice of Corporate Insolvency in Malaysia, Sweet & Maxwell, 2019 Walter Woon, SC, Woon’s Corporation Law (2022 Desk Edition), Lexis Nexis, 2022