JSNT2 Sdn. Bhd. v Exyte Malaysia Sdn. Bhd. (WA-24C-19-02/2024)

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] These grounds of judgment are in respect of the following applications which were heard together before this Court:

the Plaintiff’s application in encl. 1 pursuant to, among others, s 11 of the Arbitration Act 2005 (‘AA 2005’) 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 RM6,478,666.00 (‘Said Sum’) in relation to the Performance Bond (‘PB’) issued by the 2nd Defendant (‘D2’) in favour of the 1st Defendant (‘D1’) pending disposal of the arbitral proceedings (‘Proceedings’) between the Plaintiff and D1 on the ground of unconscionable conduct by D1; and

D1’s application in encl. 9 pursuant to, among others, s 51 of the Specific Relief Act 1950 [Act 137] (‘SRA 1950’) for an order that the Ex-Parte Injunction, which was allowed on 22.2.2024 (encl. 7), pursuant to the Plaintiff’s application in encl. 2, be set aside. [2] After having considered the cause papers and submissions by the parties, I had dismissed the Plaintiff’s applications in encls. 1 and 2 and allowed D1’s application in encl. 9. [3] In the months of July, November and December 2013, I heard similar applications by the same parties in the instant suit in O.S. No.: WA- 24C-111-07/2023 (‘Suit 111’). However, in Suit 111, the plaintiff’s application for injunctive reliefs was allowed (see JSNT2 Sdn Bhd v Exyte Malaysia Sdn Bhd & Ors [2024] 3 MLRH 823) and this decision was affirmed by the Court of Appeal on 29.4.2024. [4] As in Suit 111, the 3rd Defendant (‘D3’) was made aware of the suit but the Plaintiff has chosen not to serve the cause papers on D3. As for D2, the Plaintiff’ solicitors informed that they had served the cause papers on Messrs. Skrine who had represented D2 in Suit 111. Subsequently no appearance was entered by D2. The Cause Papers [5] The cause papers are as follows:

the Plaintiff’s Originating Summons (‘O.S.’) dated 21.2.2024 (encl. 1);

the Plaintiff’s Notice of Application (Ex-Parte Interim injunction) dated 21.2.2024 (encl. 2);

the Plaintiff’s Affidavit In Support (‘AIS’) affirmed by its Deputy Director, Zhu Yanbin on 21.2.2024 (encl. 3);

D1’s Notice of Application to set aside the Ex-Parte Interim Injunction Order dated 11.3.2024 (encl. 9);

D1’s AIS affirmed by its local Director, Kok Jee Yin on 11.3.2024 (encl. 10);

D1’s Affidavit In Reply (‘AIR’) Opposing Encls. 1 and 2 affirmed on 11.3.2024 (encls. 11 - 14);

the Plaintiff’s Notice of Intention to use Affidavit in encl. 3 dated 22.3.2024 (encl. 16);

the Plaintiff’s Corrective Affidavit affirmed on 22.3.2024 (encl. 17);

the Plaintiff’s AIR in Opposing Encl. 9 affirmed on 22.3.2024 (encl. 18);

the Plaintiff’s AIR in Support of Encls. 1 and 2 affirmed on 22.3.2024 (encl. 19); and

D1’s AIR affirmed on 27.3.2024 (encl. 20). Background Facts [6] On the first date when the instant suit was called in court, the Plaintiff’s counsel explained that there are two differences between the facts in Suit 111 and in the present case, namely that –

for the PB in the present case, three months’ notice must be given before a call can be made on the PB whereby 31.1.2024 is the cut-off date. In Suit 111, the call was made in July 2023; and

based on the correspondences as exhibited, a new sub-contractor has been appointed for the construction works and maintenance and labour which were de-scoped and approximately 90% of the works have been completed. [7] Suit 111 concerned the Letter of Award dated 30.12.2021 (‘LoA’) where D1 had appointed the Plaintiff as its contractor to carry out the works for package “C04A - Sub Structure & Superstructure for K1 and Ancillary Building” in a project known as AT&S Malaysia Construction Project Phase 1, Project No. S-96026 (‘Project’). [8] In the present suit, by way of the LoA dated 28.9.2021, D1 had appointed the Plaintiff as its contractor to carry out the substructure works for package “C01 Site Establishment” (‘Works’) for the contract sum of RM64,786,666.00. [9] The Plaintiff and D1 executed Part 1 Commercial Conditions for the Works on 28.9.2021 (‘Contract’). [10] Pursuant to Clause 8.1(a) of the General Conditions of Contract for Supply and Installation Works (‘CoC’) which provides that “Within fourteen (14) 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 for the Said Sum which was issued by D2 on 22.11.2021 with D1 as the named beneficiary. The expiry date of the PB is 30.4.2024. [11] In consideration of the issuance of the PB and at the request of the Plaintiff’s parent company, D3 had issued a Counter-Guarantee for the Said Sum in favour of D2 effective until 31.8.2024 (‘CG’). [12] The Plaintiff claimed that, following the COVID-19 pandemic, the progress of the Works had suffered as there were –

labour shortages due to restrictions preventing workers from staying and residing in the onsite quarters;

limited workers on site to cater to the governmental rules to curb the pandemic;

shortages of raw materials, machineries and equipment; and

delay in the approvals of work visas for the Plaintiff’s Chinese management personnel. [13] Despite the post-pandemic issues, the Plaintiff alleged that the Works for the Project has been almost 100% completed and only maintenance work which, is continuous, and dismantling works, which are to be done towards the end of the Contract, are left. [14] To the contrary, D1 claimed that the Plaintiff is contractually obligated to establish site facilities at the Project grounds in accordance with the scheduled milestone dates and to continue maintaining the site facilities until the final completion of the Project. However, due to the Plaintiff’s poor management, resourcing and financial constraints, it had been struggling from the start to meet the contractual milestones and to maintain the site facilities. [15] D1 has issued a Notice of Descoping of Portions of Contract Works dated 14.6.2023 (‘Notice of Descoping’). The Plaintiff received the Notice of Descoping on 14.7.2023. [16] On 10.7.2023, a meeting was held between the Plaintiff’s and D1’s representatives to discuss the issues arising from the Project (‘10.7.2023 Meeting’). At the 10.7.2023 Meeting, the Plaintiff presented its slides titled “C01 & C04A Work Analysis and Plan” (‘Presentation Slides’). This is the same 10.7.2023 Meeting and Presentation Slides as mentioned in paragraph 18 in JSNT2 Sdn Bhd (supra). [17] Thereafter, several correspondences were sent between the Plaintiff and D1. [18] According to D1, as of October 2023, the Plaintiff has failed to achieve most of the contractual milestones i.e. a delay of approximately 2,268 days as per the Notice of Delay dated 30.11.2023. [19] In the light of the Plaintiff’s failure to carry out its obligations, D1 had exercised its rights under Clauses 12.1 and 32.4 CoC to assist the Plaintiff by performing the Works itself or engaging a third party to perform the Works for the Plaintiff. Consequently, D1 claimed that it is entitled to back charges for the costs incurred in the sum of RM9,078,034.07 as well as liquidated and ascertained damages (‘LAD’) for the delay in the sum of RM9,717,999.90 (as capped under Clause 33 CoC). The total amount is RM18,796,033.97. [20] On 20.2.2024, D1 called on the PB because the Plaintiff allegedly –

is unable to, and has consistently, failed to fulfil its obligations under the Contract;

has caused loss and damages to D1 far exceeding the Said Sum;

has admitted to its inability to complete the Works in a meeting held; and

is unable to complete the Project and compensate D1 as the Plaintiff had applied to be placed under Judicial Management (‘JM’) in the Shah Alam High Court (‘SAHC’) on 8.9.2023 vide Case No.: BA-28JM-4-09/2023. [21] On the same date i.e. 20.2.2024, D1 wrote to D2 to demand for payment of the Said Sum to be made by D2 to D1 (‘Letter of Demand’). The Applications in encls. 1, 2 and 9 [22] The background facts as narrated above led to the filing of the Plaintiff’s applications in encls. 1 and 2 and D1’s application in encl. 9. [23] The reliefs sought in encl. 1 are similar to the reliefs in Suit 111 [see paragraph 23 in JSNT2 Sdn Bhd (supra)]. [24] The statutory provisions being relied upon by the Plaintiff in the present applications are the same as the provisions in its applications in Suit 111 [see paragraphs 24 - 26 in JSNT2 Sdn Bhd (supra)] whilst, apart from s 51 SRA 1950, D1 relied on O. 42, r. 13 and O. 92, r. 4 of the Rules of Court 2012 (‘RC 2012’) and/ or the inherent jurisdiction of the Court in its application to set aside the Ex-Parte Injunction Order. [25] Paragraphs 1 and 4 in the PB read as follows: “1. IN CONSIDERATION OF YOU AGREEING TO ENTER INTO A CONTRACT FOR S96026-C01 SITE ESTABLISHMENT DATED 28 SEPTEMBER 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 RM6,478,666.00 … (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. …” (emphasis added). [26] 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 RM6,478,666.00, to be made by BOC immediately and in any event no later than Friday 23rd February 2024. …”. [27] The Plaintiff claimed that D1’s call on the PB is, among others, unconscionable and was made arbitrarily without regard to the Contract due to the following reasons:

the completion date of the Contract is only on 31.7.2024;

the PB is valid until 30.4.2024 while the CG is valid until 31.8.2024. The PB and CG are secured until these dates;

almost 100% of the structuring and/ or constructions works have been completed;

parties were still negotiating and discussing the progress of the Project even on the day before D1 issued its letters dated 11.7.2023 asking the Plaintiff to vacate the project site and remove all belongings by 12.7.2023. D1 had unilaterally appointed Prestige Management Services Consultant Sdn Bhd (‘Prestige’) on 12.7.2024 to take over the Plaintiff’s works;

the appeal against the decision of this Court in Suit 111 is ongoing;

to date, the Contract has not been terminated;

(g)

(h)

the issue of descoping of the works is of no relevance;

the Plaintiff is clearly unable to complete the works and thereby is liable to pay LAD and back charges for costs incurred to D1; and

the fact that the Plaintiff successfully obtained an injunction in JSNT2 Sdn Bhd (supra) is irrelevant as each case must be determined based on its own facts. The Legal Principles [29] The legal principles as set out in paragraphs 32 - 34 in JSNT2 Sdn Bhd (supra) are equally applicable here and for the sake of brevity, shall not be repeated here. Analysis & Findings - 1st Issue: Whether the Plaintiff has failed to make full and frank disclosure as required under O. 29, r. 1(2A) RC 2012 [30] D1 submitted that the Ex-Parte Injunction Order should be set aside due to the Plaintiff’s failure in disclosing the following material facts in encl. 2:

No arbitration proceedings have been commenced between the parties. In paragraphs 19(f) and 20 of the AIS (encl. 3), the Plaintiff made a false averment that there is an “ongoing arbitration proceedings” between the parties, when there are no such proceedings. Reference to arbitration proceedings was also made in paragraphs 16.5, 26.4(a) and 26.5 of the AIS. The Plaintiff attempted to cover up the false averment by filing a Corrective Affidavit (encl. 17) and referring to paragraph 19(f) of the AIS to state that the words “yang sedang berjalan” should be read as “yang akan berjalan”. However, the Corrective Affidavit does not make any corrections to the words in paragraphs 16.5, 20, 26.4(a) and 26.5 of the AIS. Moreover, the Plaintiff only placed the Notice of Arbitration dated 22.3.2024 before the Court one month after obtaining the Ex Parte Injunction Order, and after D1 raised the absence of any arbitration proceedings and the false averment in the AIR. Hence, the Corrective Affidavit is an afterthought. The premise of the injunctive application under s 11 AA 2005 is for the Court to be empowered to grant interim measures for the purposes of maintaining the status quo pending determination of the dispute between the parties by arbitration.

The Plaintiff has been facing financial difficulties since the commencement of the Project and has been struggling from the start to perform its obligations under the Contract on time and in accordance with the requirements of the Scope of Works.

The Plaintiff has applied to be placed under JM in September 2023. [31] Mr. HK Niak argued that the failure to fulfil the requirements under O. 29, r. 1(2A) RC 2012 would render the Ex-Parte Injunction Order liable to be set aside (see KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLD & Anor [2018] 1 LNS 1921). [32] I have considered the relevant paragraphs in the AIS and Corrective Affidavit and I find that, whilst it is true that the Plaintiff has only corrected the averment in paragraph 19(f) of the Plaintiff’s AIS, and not in paragraphs 16.5 and 20, this failure does not amount to a failure that would render the Ex-Parte Injunction Order to be liable to be set aside. In paragraphs 26.4(a) and 26.5 of the AIS, the words “arbitration” and “arbitration proceedings” are worded in a general way. [33] Similarly, with regards to the alleged non-disclosure about the Plaintiff’s financial difficulties and application to be placed under JM, reference was made to the JM Application in paragraph 27.3 of the AIS. In my opinion, the Plaintiff has, in general, disclosed in paragraphs 27 and 27.1 to 27.3 of the AIS about the financial challenges it faces as a construction company. Such disclosures, in my view, suffice. - 2nd Issue: Whether the Plaintiff’s undertaking as to damages is of no value [34] D1 contended that the undertaking as to damages proffered to the Court for the purposes of securing the Ex Parte Injunction Order is of no value on the ground as raised under the 1st issue, namely that the Plaintiff did not disclose the fact that it has been facing financial difficulties as evident from the Presentation Slides. [35] However, I have rejected D1’s submission regarding this purported non-disclosure as explained earlier. [36] Furthermore, the undertakings are given to the Court and not to D1. D1 could apply to enforce the undertakings as to damages, but the Ex-Parte Injunction Order must first be discharged or set aside by the Court. D1 has no right to its enforcement until the discretion is exercised in its favour by the Court. - 3rd Issue: Whether D1 has acted in breach of s 410 of the Companies Act 2016 [Act 777] as the PB is security over the Plaintiff’s property [37] The Plaintiff’s submission on this issue is a repetition of the submission canvassed in Suit 111. Hence, this Court’s views and findings in paragraphs 35 - 49 in JSNT2 Sdn Bhd (supra) would apply equally here. - 4th Issue: Interpretation of paragraph 4 of the PB [38] The Plaintiff asserted that D1 has failed to fulfil the qualifying condition in paragraph 4 of the PB as to the cut-off period in calling the PB. [39] The Plaintiff takes the position that the first part of paragraph 4 of the PB clearly states the PB expires and shall become null and void after 30.4.2024. The second part of the PB must be read in conformity with paragraph 4 because there is a full stop followed by the word “Accordingly”. This indicates that the words succeeding the word “Accordingly” are to be read as “consequently” of paragraph 4 (see paragraph 25 above). [40] Mr. Harjinder Singh argued for the Plaintiff that any call of the PB must be determined by complying strictly with the terms of the PB and the Contract. Paragraph 4 of the PB provides that the Said Sum will only be paid by D2 if the demand is received on or before three months from the expiry date of the PB on 30.4.2024. D1 called the PB on 20.2.2024

that the provision that allows D1 to claim the PB is Clause 33.1(b)(ii) CoC which is to recover any liquidated damages imposed. D1 is not entitled to impose any damages against the Plaintiff because there is no indebtedness by the Plaintiff and D1 has never shown its intention to impose any liquidated damages against the Plaintiff even during the 10.7.2023 Meeting; and

in response to Mr. HK Niak’s oral submission during the hearing that the Plaintiff lacks locus standi to argue on the interpretation of the PB and only D2 has the locus to do so because the PB is between D1 and D2, that –

the issue of locus standi was not raised in D1’s AIR and its written submissions;

(ii) D2 has made its position clear by not taking an active part in this proceeding that D2 is only concerned with the ultimate decision of the Court. D2 will make payment under the PB if so ordered by the Court;

(iii) D1 is blowing hot and cold as it had referred to the documents executed between the Plaintiff and D1 in order to justify the interpretation of the PB, whilst concurrently taking the “no locus standi” argument; and

(iv) if D1 was dissatisfied with the terms or format of the PB issued by D2, then D1 should not have accepted the PB at the time of its issuance. [42] The argument in subparagraph 41(a) above can be dealt with swiftly. Consistent with the finding by this Court in Suit 111 [see paragraphs 54 - 57 JSNT2 Sdn Bhd (supra)], the Plaintiff’s contention that D1 can only call on the PB where there are liquidated damages for delay is misconceived. [43] With regards to the argument in subparagraph 41(b) above, I was persuaded by the Plaintiff’s submission and thus, Mr. HK Niak’s oral submission on the issue of locus standi was rejected. [44] As for the interpretation of paragraph 4 of the PB, it is trite that, when construing the meaning of the language of a commercial contract, the law generally favours a commercially sensible construction (see MBF Insurans Sdn Bhd v Lembaga Penyatuan Dan Pemulihan Tanah Persekutuan (FELCRA) [2007] 6 CLJ 639). [45] In my considered view, the Plaintiff’s interpretation of paragraph 4 of the PB makes no commercial sense as it negates the purpose of the PB which is to remain valid until 30.4.2024, being the completion date under the Contract. [46] The Court accepts the interpretation by D1 on the phrase “THREE (3) MONTHS FROM THE EXPIRY DATE”, namely, that the parties have agreed for the PB to be valid until 30.4.2024 and the demand and payment under the PB can be made within three months from 30.4.2024 i.e. by 30.7.2024. - 5th Issue: Whether D1’s call on the PB is unconscionable [47] I shall now deal with the main issue in this suit. [48] The gist of the Plaintiff’s submission in support of the allegation that D1’s call on the PB is unconscionable is based on the totality of events which had occurred prior to the said call as evidenced by the correspondences and meetings between the Plaintiff and D1 (see p 488 to p 537, encl. 3) as follows:

Notice of Descoping where D1 informed the Plaintiff that as at 14.6.2023, the works for CLQ, Contractor’s Office and Workers’ Main Canteen and in-break area 1 & 2 will be descoped. The details of the de-scoped works and the financial particulars will be set out in the Variation Order which will be issued to the Plaintiff. D1 made the decision to descope in view of the numerous and persistent delays encountered in the Plaintiff’s progress of works and the Plaintiff’s continued financial struggles. The Plaintiff was required to confirm acknowledgement and acceptance of this Notice by way of return of the enclosed acknowledgement copy by 13.7.2023. However, the Plaintiff received this Notice only on 14.7.2023.

Presentation Slides where the Plaintiff suggested that C01 be descoped to the Plaintiff’s appointed sub-contractor.

D1’s letter to the Plaintiff dated 11.7.2023 wherein reference is made to the 10.7.2023 Meeting and the Minutes of the 10.7.2023 Meeting are attached. D1 stated that it has considered the Plaintiff’s request to de-scope the works to the Plaintiff’s sub-contractor, KIDE but D1 does not agree to the suggestion because no details have been provided with regards to –

KIDE’s suitability and willingness to complete the works within the project schedule; and

(ii) the consequential time and costs impact if the works are awarded to KIDE. Moreover, the Plaintiff has no contractual right to demand to whom the descoped works should be awarded to.

D1’s letter to Prestige dated 12.7.2023 to confirm that D1 shall unconditionally transfer the full authority and control of the Canteen, Centralised Labour Quarters, Contractor Office and dismantling of the same at the project site to Prestige effective 19.7.2023.

The Plaintiff’s letter to D1 dated 18.7.2023 wherein the Plaintiff stated, among others, that it has always been the Plaintiff’s intention to complete all works for C01 and in respect of D1’s unilateral de-scoping of C01, that no prior discussions were held between the parties to de-scope the remaining works under C01. In addition, the unilateral de-scoping was made after D1 made a call on the performance bond in Suit 111. The Plaintiff proposed that parties attempt to amicably resolve all issues between them.

The second letter which was sent by the Plaintiff to D1 on 18.7.2023 where the Plaintiff made it clear that it will not be held liable for any unilateral appointment of third-party contractors.

The Plaintiff’s letter to D1 dated 25.7.2023 stating that D1’s decision to descope the works under C01 and to appoint Prestige was made without the Plaintiff’s knowledge, confirmation and consent. The Plaintiff referred to the discussions on 10.7.2023 and 12.7.2023 which it claimed only focused on a proposal to descope the works for C04 and that the Plaintiff “… have continuously stated that we want to continue working for C01 during this meeting …”. The Plaintiff accused D1 of having made the decision to descope the works for C01 in bad faith. The Plaintiff placed on record that D1’s acts are unlawful and is causing damage to the Plaintiff. The Plaintiff asked D1 to instruct Prestige to allow the Plaintiff to continue and finish the works for C01 without disruption and interference. [49] To the Plaintiff, D1’s conduct is unconscionable because, in the 10.7.2023 Meeting, D1 did not inform the Plaintiff of its intention to descope the works for C01 and the dealings between D1 and Prestige or that D1 has appointed a third party. D1 unilaterally removed the Plaintiff from the Project and a third party was appointed to replace the Plaintiff, whereby the third party was appointed as early as 14.6.2023 (see paragraph 46, encl. 11), even though the parties were still in the negotiation process. [50] The learned counsel for the Plaintiff fervently submitted that, despite D1’s letter on 14.6.2023 which gave the Plaintiff time till 13.7.2023 to acknowledge and accept the Notice of Descoping, there was never any intention on the part of D1 to inform the Plaintiff of the appointment of Prestige. [51] Furthermore, the counsel argued that –

D1’s letter to the Plaintiff dated 16.8.2023 for a joint inspection is nothing more than an eye wash because, at that point in time, there was nothing to inspect as the Plaintiff has been unilaterally removed from the Project and was instructed to vacate the site by 12.7.2023;

there is no necessity for D1 to make a call on the PB as the Plaintiff has completed almost the entire construction and structuring works and what remains is ongoing maintenance works and dismantling works. This was admitted by D1 in paragraph 49(i), encl. 11;

D1’s conduct in calling on the PB soon after the decision of this Court in Suit 111 on 18.1.2024 for Contract C04 reflects D1’s malicious intent and non-transparency. No explanation was given by D1 as to why the PB was only called on 20.2.2024;

D1 had not issued any notice for LAD to the Plaintiff; and

based on the case authorities of JBE Properties Pte Ltd v Gammon Pte Ltd [2010] SGCA 46, Cex v Cey and another [2020] SGHC 100, Kejuruteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd & Anor [2011] CLJ 442, Sumatec Engineering and Construction Sdn Bhd v Refining Co Sdn Bhd [2012] 4 MLJ 1, Bina Jaya Mantap Sdn Bhd v Institute of Technology Petronas Sdn Bhd [2014] 11 MLJ 352, Bauer (Malaysia) Sdn Bhd v Hundred Vision Construction Sdn Bhd [2015] MLRHU 1179 and Dunggon Jaya Sdn Bhd v Aeropod Sdn Bhd & Anor and Another Appeal [2019] MLJU 392, tactical maneuvers have been held to be unconscionable. [52] I have considered the affidavit evidence and the oral and written submissions of the parties, including the tabulated summary of the distinguishing factors between the call on the C01 PB and C04 PB (encl. 35), and I find that, unlike in Suit 111, the Plaintiff has not 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. The events or D1’s conduct which were relied upon by the Plaintiff are not of such a degree to prick the conscience of a reasonable and sensible man. [53] My reasons are as follows:

The Plaintiff did not establish that negotiations between the parties were still ongoing between the 10.7.2023 Meeting and 20.2.2024 when D1 called on the PB. In Suit 111, the Plaintiff had proven that the parties were in the midst of negotiations when the call on the PB was made.

In the Presentation Slides, the Plaintiff itself requested that C01 be descoped, albeit to the Plaintiff’s appointed sub-contractor, in view of the difficulties being faced by the Plaintiff such as ongoing court cases, overdue payments to workers and sub-contractors and cashflow issues. D1 had considered this request and rejected the same with reasons (see paragraphs 9 - 11 in D1’s letter to the Plaintiff dated 11.7.2023 at p 638, encl. 3).

In the letters to D1 dated 18.7.2023, the Plaintiff stated that its intention has always been to complete all works for C01 and that there were no prior discussions between the parties to de-scope the remaining works under C01. The Plaintiff asserted that the de-scoping was done unilaterally by D1 while D1 maintains that it was merely exercising its rights under Clauses 12.1, 13.6, 26.2 and 32.4 CoC. I agree with D1’s submission that the issue on whether the de-scoping of works was rightfully done or otherwise is for the arbitral tribunal to decide. I also agree that the impact of the matters which took place in July 2023 until the date when the PB was called has been diluted. The fact is that Prestige was appointed vide D1’s letter dated 12.7.2023. Prestige carried out the rest of the works for C01 and costs were incurred by D1.

There is no such admission as contended by the Plaintiff in paragraph 49(i), encl. 11. D1 actually averred that “The Plainitff is misleading the Court by alleging that it has achieved 100% completion of the construction works because: (i) the Works under the Contract was only 100% completed in terms of the establishment of the site facilities; (ii) the 100% completion of the Works under the Contract was only possible after the 1st Defendant assisted the Plaintiff by performing the works itself or engaging a 3rd party to perform the Works under Clause 12.1 and Clause 32.4 of the Contract on numerous occasions which the 1st Defendant has incurred additional costs and the 1st Defendant is entitled to backcharge to the Plaintiff;”. In paragraphs 26 and 28, encl. 11, D1 affirmed that since March 2023, there has been no further performance of the Works by the Plaintiff despite numerous outstanding maintenance works which required the Plaintiff’s immediate attention. The Notices of Outstanding Works, List of Outstanding Works, breakdown of the back charges and purchase orders and invoices of the costs incurred by D1 are shown in exhibits “D-4”, “D-6”, “D-7” and “D-8”. The issue of whether the Works are near completion and whether any breach has been committed by the Plaintiff or D1 are general contractual disputes that should not be elevated to the level of unconscionable conduct.

As regards the timing of the call on the PB which was almost one month after this Court had decided Suit 111 in favour of the Plaintiff, following the finding of the Court on the interpretation of paragraph 4 of the PB, D1 has until 30.7.2024 to make a demand on the PB. Furthermore, although the C01 Contract and C04 Contract are in respect of the same Project, these Contracts are distinct and separate, relating to different scope of works. Proving unconscionability is fact sensitive. The 5th Issue must be determined based on the factual circumstances and the merits of the instant case. [54] In sum, I am unable to conclude that the call on the PB by D1 in the circumstances of this case is unconscionable. Conclusion [55] Premised on the aforesaid reasons, the Plaintiff’s applications in encls. 1 and 2 were dismissed and D1’s application in encl. 9 was allowed with total costs of RM20,000.00 to be paid by the Plaintiff to D1, subject to allocator. Dated: 20 December 2024 (ALIZA SULAIMAN) Judge High Court in Malaya Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Harjinder Singh a/l Kuldip Singh (Tanusha Manikam and Samantha Sam 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 and John Mathew with him) Messrs. Christopher & Lee Ong Advocates & Solicitors Level 22, Axiata Tower No. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: Aerodua Metal (M) Sdn Bhd v. Ibarat Hijau Sdn Bhd [2021] CLJU 256 Ahmad Zaki Sdn Bhd v SN Akmida Holdings Sdn Bhd [2021] MLJU 644 Arthur Anderson & Co v. Interfood Sdn Bhd [2005] 6 MLJ 239 Australian Pressure Vessel Heads (2011) Pty Ltd v Hea Australia Pty Ltd [2015] VSC 752 Bina Jaya Mantap Sdn Bhd v Institute of Technology Petronas Sdn Bhd [2014] 11 MLJ 352 Cex v Cey and another [2021] 3 SLR 57 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 Dunggon Jaya Sdn Bhd v Aeropod Sdn Bhd & anor and another appeal [2019] MLJU 392 Electro Magnetic (S) Ltd (Under Judicial Management) v Development Bank of Singapore Ltd [1994] 1 SLR 734 Esso Petroleum Malaysia Inc v. Kago Petroleum Sdn Bhd [1995] 1 CLJ 283 Exxobrite Sdn Bhd v. Value Plus Industries Sdn Bhd [2022] MLRHU 1581 Granstep Development Sdn Bhd v Tan Chong Heng Construction Sdn Bhd and other cases [2021] MLJU 2473 JBE Properties Pte Ltd v Gammon Pte Ltd [2010] SGCA 46; [2011] 2 SLR 47 JSNT2 Sdn Bhd v Exyte Malaysia Sdn Bhd & Ors [2024] 3 MLRH 823 Keet Gerald Francis Noel John v Mohd Noor Bin Abdullah & Ors [1995] 1 MLJ 193 Kejuruteraan Bintai Kindenko Sdn Bhd v. Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Company LLC [2020] MLJU 85 (CA) KNM Process Systems Sdn Bhd v. Lukoil Uzbekistan Operating Company LLD & Anor [2018] 1 LNS 1921 (HC) Kumpulan Liziz Sdn Bhd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd [2022] 1 MLJ 570 Malaysian Merchant Marine Berhad & Ors v BHLP Trustee Berhad & Ors [2010] MLJU 1171 MBF Insurans Sdn Bhd v Lembaga Penyatuan Dan Pemulihan Tanah Persekutuan (FELCRA) [2007] 6 CLJ 639 MCC Overseas (M) Sdn Bhd v Malayan Banking Berhad & Ors [2021]1 LNS 851 Prestij Mega Construction Sdn Bhd v Macly Assets Sdn Bhd [2020] 1 LNS 627 Sinohydro Corporation (M) Sdn Bhd v Golden Horse Rubber Sdn Bhd [2020] MLJU 191 Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Co Sdn Bhd [2012] 4 MLJ 1; [2012] 3 CLJ 401 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 Teknik Cekap Sendirian Berhad v. Public Bank Berhad [1995] 4 CLJ 697 Legislation: Arbitration Act 2005, s 11 Companies Act 2016, ss 2, 410, 426 & 588 Rules of Court 2012, O. 29 r. 1(2A), O. 42 r. 13 & O. 92 r. Specific Relief Act 1950, s 51 Other source(s) referred to: Chow Kok Fong, Law and Practice of Construction Contracts, Fifth Edition, Volume 1, Sweet & Maxwell, 2018 Walter Woon, SC, Woon’s Corporation Law (2022 Desk Edition), Lexis Nexis, 2022