Konsesi Kota Permatamas Sdn Bhd v 1. ) Tech Art Vision Sdn. Bhd. (WA-28PW-186-04/2025)

These Grounds concern leave I granted under section 486(2) of the Companies Act 2016 (“CA 2016”) to the First Respondent to proceed in the name of the Second Respondent, with arbitration proceedings (“the Arbitration”) and/or with the enforcement of a final award in the Arbitration.

All references to sections are, unless the context provides otherwise, with reference to CA 2016.

The First Respondent (“R1”) is the sole contributory of the Second Respondent (“R2”). On 13.10.2021, R2 was wound up.

Konsesi (“Konsesi”) is embroiled in a dispute with R2. The dispute went to Arbitration, which was commenced on 6.6.2020. On 27.8.2024, the Final Award was handed down in the Arbitration in favour of R2.

The chronology of events set out below is adopted from Konsesi’s truncated submissions filed herein: Date Event 5.1.

06.06.2020

R2 initiated arbitration proceedings against Konsesi1 (the “Arbitration”).

Konsesi filed a counterclaim in the Arbitration.

5.2.

13.10.2021 While the Arbitration was ongoing, R2 was wound up by a third party2.

5.3.

17.01.2022 Konsesi filed its Proof of Debt against R2, comprising:

the amount counterclaimed in the

the costs awarded to Konsesi against R2 in court proceedings 5.4.

23.03.2022 By a letter3 the Official Receiver (“OR”) purported to grant sanction to R1 to continue the Arbitration (the “1st Sanction”).

5.5.

07.04.2022 The OR purported to amend the 1st Sanction via a second letter4, granting R1’s solicitors (Messrs Rose Hussin) sanction to conduct the Arbitration. 5 5.6.

04.07.2024 Konsesi sent several letters5 to the OR requesting that the 1st Sanction be revoked as it was void or inoperative in the light of the Court of Appeal’s decision in Oren Venture. 1 Exhibit NAF-1, Applicant’s AIS, Enc. 2, pp.18-207 2 Exhibit NAF-2, Applicant’s AIS, Enc. 3, pp. 209-213 3 Exhibit NAF-4, Applicant’s AIS, Enc. 3, pp. 223-228 4 Exhibit NAF-4, Applicant’s AIS, Enc. 3, pp. 223-228 5 Exhibit NAF-6, Applicant’s AIS, Enc. 3, pp. 265-293 Date Event 5.7.

23.08.2024 The OR maintained6 the 1st Sanction remained valid and in force, and declined to withdraw it.

5.8.

27.08.2024 The Final Award was delivered in the Arbitration.

5.9.

10.09.2024 R1 purportedly obtained further sanction from the OR to enforce the Final Award (the “2 nd Sanction”)

5.10. 13.09.2024 Konsesi filed an application to set aside the 1st Sanction in WA-28PW-542-09/20247 (“PW542”). 6 5.11. 24.09.2024 R1 and R2 filed an application to enforce the Final Award in Originating Summons No. WA- 24C(ARB)-59-09/2024 (the “Award Enforcement Action”).

5.12. 03.11.2024 Konsesi filed the application to set aside the Final Award in Originating Summons No. 24C(ARB)-66-11/2024 (formerly WA- 24NCC(ARB)-36-11/2024)8 (the “Award Setting Aside Action”). Both the Award Enforcement Action and the Award Setting Aside Action are before the Construction Court.

5.13. 19.11.2024 The OR issued a third letter stating that the 2nd Sanction extended to the Award Setting Aside Action (the “3 rd Sanction”).

5.14. 09.11.2024 Konsesi’s solicitors informed the Construction Court of the application to set aside the 1st Sanction in PW542.

5.15. 13.12.2024 R1 applied to intervene in PW542.

5.16. 08.11.2024 R1 filed an ex-parte application in PW89 for the NPT Order to “continue with the Arbitration” (which had concluded by then), to commence and continue the Award Enforcement Action, and to oppose the Award Setting Aside Action. 7 6 Exhibit NAF-7, Applicant’s AIS, Enc. 3, pp. 295-297 7 Exhibit NAF-8, Applicant’s AIS, Enc. 3, pp. 299-322 8 [Exhibit ZBM-8, 1st Respondent’s AIR, Enc. 13, pp. 10-12] & [Exhibit NAF-16, Applicant’s AA, Enc. 21, pp. 79-82, 98, 113-124] 9 Exhibit NAF-11, Applicant’s AIS, Enc. 4, pp. 484-644 Date Event Konsesi was not informed of PW8 until after the NPT Order was granted.

5.17. 05.03.2025 The NPT Order was granted.

5.18. 24.03.2025 In PW542, I granted Konsesi leave to apply to set aside the NPT Order but made no orders on the remaining prayers in the Notice of Motion. However, I also allowed Konsesi liberty to file afresh to set aside the NPT Order.

5.19. 24.03.2025 Konsesi filed the application to set aside the NPT Order10.

5.20. 26.03.2025 The Senior Assistant Registrar directed Konsesi’s solicitors to refer to the relevant practice direction and to file the application under a fresh case number11.

5.21. 17.04.2025 Konsesi filed this motion in suit PW186, without prejudice to its rights to challenge the NPT Order on all available grounds.

5.22. 29.04.2025 I held that the 1st Sanction was invalid.

On 05.03.2025, I granted R1’s ex-parte application (in WA- 28PW-8-01/2025 (“PW8”) for leave nunc pro tunc to commence or continue with the following (collectively, “the

“continue with the Arbitration” (which had already concluded when the final award was handed down); and

to “commence and/or continue with action to enforce the Final Arbitration Award dated 27.8.2024” (“the Arbitration Award”) and to “oppose the application to set aside the Arbitration Award” (the “NPT Order”).

PW8 was an application for an omnibus order for conduct of the Arbitration. I found nothing wrong in this type of application even though the Arbitration had been concluded.

By a fresh suit in PW186, Konsesi applied to set aside the NPT Order. I dismissed the application and Konsesi appealed; and thus, these grounds.

On 24.03.2025, Konsesi filed an application within PW8 to set aside the NPT Order. On 17.04.2025, pursuant to the Senior Assistant Registrar’s directions, Konsesi filed a motion under a fresh case number (WA-28PW-186-04/2025 (“PW186”), without prejudice to its rights to challenge the NPT Order on all available grounds.

In summary, Konsesi’s stated core arguments are:

R1 failed to satisfy the statutory requirements to obtain the

nunc pro tunc leave under section 466(2) depends on the statutory scope of the liquidator’s powers.

Before dealing with these complaints, a brief summary of the role of the Winding Up Court upon liquidation would be useful.

In a broad sense, the Winding Up Court will act to recover and protect the assets of the company for distribution to the stakeholders, more often than not, the creditors.

It is for this reason that so far as is practicable, claims against the company should be adjudicated within the proof of debt process to prevent expending substantial funds in defending expensive claims in the liquidation. To guard the assets against such costly litigation, leave of the winding up Court under section 471(1) is necessary before the claim may be adjudicated in the ordinary Court process. I have touched on this in Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU 2479 at paras 48 and 49.

Conversely, valuable choses-in-action vested in the company which may result in a substantial recovery for the creditors, should be pursued. They are under the control of the liquidator.

If for whatever reason, the liquidator is unwilling or unable to pursue the claim, the Court may exercise its power over the liquidator under section 486(2) to grant an interested third party (ordinarily a contributory) conduct over such proceedings in the name of the company. All recoveries are to be applied generally for the benefit of the creditors pari passu. To guard against risky claims, it is now the practice of the OR’s office to ask for indemnities against adverse orders as to costs made against the OR or the company.

First, the claim must be in the best interests of R2 within the test in Small Medium Enterprise Development Bank Malaysia Bhd v. Oren Venture Sdn. Bhd. & Ors [2022] 6 CLJ 148 at para 35 and as adopted in Tan Aik Ling v CT World Construction (supra) at para 41. Clearly, the Arbitration award has been made against Konsesi. And obviously, continuing with the Arbitration Proceedings would be in the best interest of R2 as any recovery on the Arbitration Award would increase the assets available to its creditors.

The second is that the OR must have refused to continue with the Arbitration Proceedings. This is because the Court’s power to grant conduct of the Arbitration Proceedings in the name of R2 is based on section 486(2), the provision that allows the Court control over liquidators, see by analogy, the summary of the authorities in Tan Aik Ling v CT World Construction (supra) at paras 33 to 39.

Thirdly, the Court’s power to grant leave nunc pro tunc is derived from the Court’s inherent jurisdiction. In Novabrite Lighting Sdn Bhd v Emrail Sdn Bhd (Balaranee Construction, proposed intervener) [2024] MLJU 2986, and in the context of section 410(c), I said this: “[170] In any event, there is no need for section 410(c) itself to expressly provide that a Court may grant nunc pro tunc. While there is power to grant leave under section 410(c), the power to grant such leave nunc pro tunc is derived from the Court’s inherent jurisdiction, see Hartley Poynton Ltd v Ali [2005] VSCA 53 at [76]: “[76] The conclusions I would suggest should be drawn from common law and Chancery practice as to antedating, as developed by Australian courts (but overlooking certain misconceptions which appear to have crept in inadvertently), are as follows. First, the power of the courts to antedate orders and judgments, which comprehends from its terms the making of orders nunc pro tunc, is derived from the Court ‘s inherent jurisdiction or, as expressed in the courts of common law, was a power derived from the common law: see Isley’s case205.; Copley v Day206.; Evans v Rees207.” [Emphasis Mine] [171] As such, there is no necessity for the section itself (here, section 410(1)(c)) to vest the Court with power to grant leave nunc pro tunc. The Federal Court in Winstech Engineering Sdn Bhd v Espl (M) Sdn Bhd [2014] 3 MLJ 1, held that the Court could grant sanction under section 236(3) (now section 486(2) of CA 2016) nunc pro tunc, even though the said section did not expressly grant the power to do so.”

In Winstech Engineering Sdn Bhd v ESPL (M) Sdn Bhd [2014] 3 MLJ 1, the Federal Court held that under the Companies Act 1965, the Court may grant nunc pro tunc leave, notwithstanding that proceedings had already been commenced.

Notwithstanding the above and while section 486(1) of CA 2016 outlines the scope of the liquidator’s powers, section 486(2) provides that the exercise of such powers is subject to the Court’s control upon an application of any creditor or contributory.

In Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd (Formerly Known As Bousted Trading (1985) Sdn Bhd) [2010] 2 MLJ 749, the Federal Court held that the Court may authorise a person other than the liquidator to commence, continue, or defend proceedings in the name of the wound-up company, as followed in Tan Aik Ling v CT World (supra) at para 35.

However, such authorisation may only be granted where the liquidator refuses to act, see Tan Aik Ling v CT World (supra) at para 19, where I granted an order for retrospective regularisation under section 486(2) upon such refusal.

Such refusal may be inferred.

In this case, the OR (erroneously) repeatedly granted sanction to RI to have conduct over the Arbitration. However, in my mind, it is implicit that by granting such sanction, the OR refused to exercise control over the Arbitration Proceedings.

The OR and R1 persisted with asserting that the 1 st Sanction was valid. Despite objections by Konsesi against the liquidator’s sanctions on several occasions, including before the Final Award was rendered, the OR and R1 maintained that the 1 st Sanction was valid and thereafter, proceeded to issue the 2 nd and 3 rd Sanctions. The OR and R1 continued to defend the validity of these Sanctions in the Construction Court proceedings, in PW542, and in PW8. In my judgment, such a stand shows the liquidator’s intention not to personally continue with the Arbitration to its conclusion.

What puts the matter beyond doubt is that by way of an affidavit affirmed on 11.6.2025, the OR specifically confirmed that he would not represent, defend or conduct any action in relation to R2. This would obviously include the Arbitration Proceedings. The OR explained that the previous practice of granting sanction directly to contributories had changed given the decision of the Court of Appeal in Oren Ventures on 16.11.2023. Further, the OR also asserted that the very grant of sanction indicates that the OR never intended to personally proceed with the Arbitration Proceedings in the name of R2.

I had no reason to disbelieve the OR and I accepted his word as I did in Tan Aik Ling v CT World Construction (supra) at para

This pre-condition to the grant of leave under section 486(2) by the refusal of the OR, has therefore been met.

I will now deal with the grounds raised by Konsesi in opposition. These comprised a string of procedural and technical objections, which I will endeavour to plough through now.

First, it was submitted that the NPT Order granted without affording Konsesi an opportunity to be heard, was made in breach of natural justice and is therefore null and void, relying on Badiaddin Bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393 and the Court of Appeal in Siaw Swee Mie v Lembaga Lebuh Raya Malaysia [2019] 4 MLJ 406.

In my judgment, R1 is entitled to proceed for leave nunc pro tunc on an ex parte basis provided, of course, that persons affected by the order are able to return to Court to apply to set aside the order, see in the context of restraining orders under section 368(1), the Federal Court in Mansion Properties Sdn Bhd v Sham Chin Yen & Ors [2021] 1 MLJ 527: “[48] Further, where an ex parte order is granted under s 368 of the CA, the affected creditors have the right to intervene in the proceedings and apply to set aside the order. This has been the general practice (see PECD Bhd & Anor v AmTrustee Bhd; Sri Hartamas Development Sdn Bhd v MBF Finance Bhd) and was indeed the practice adopted in the present appeal. It is undisputed that, having obtained the first order by way of an ex parte application, the appellant subsequently served the first order on the respondents. The respondents successfully applied to intervene in the first OS proceedings, and were given an opportunity to make representations in respect of their application to set aside the first order. In these circumstances, no prejudice or breach of natural justice could be said to have been occasioned to the respondents, by reason of the ex [2021] 1 MLJ 527 at 546 parte nature of the application or the omission to serve the application on the respondents before the hearing.”

Instead, Konsesi was given every opportunity to set aside the NPT Order. On 24.3.2025 (see para 5.18 of Konsesi’s chronology above), I specifically gave Konsesi leave to apply to set aside the NPT Order.

Konsesi did apply vide PW186 to set aside the NPT Order, which was heard and dealt with. In this sense, there was no denial of natural justice as claimed.

There is nothing in the natural justice point.

Secondly, the OR himself, purported to give R1 ‘sanction’ to have conduct over the Arbitration on three (3) occasions. Such sanction is challenged by Konsesi.

As stated above, the liquidator is the sole person empowered to bring or defend any action or legal proceedings in the name and on behalf of the wound-up company, see Zaitun Marketing (supra).

However, what a liquidator may not do is to entirely delegate or transfer his discretion and powers over litigation and the powers statutorily conferred on him, to third parties (including contributories such as R1) (see Oren Venture (supra) as affirmed by the Court of Appeal).

Similarly, CA 2016 does not empower a liquidator to ‘sanction’ any third party to commence or continue proceedings in the name of the wound-up company (see Sabah Forest Industries Sdn Bhd (receiver & manager appointed) & Anor v Chief Minister of The State of Sabah [2022] 1 LNS 3086. A complete delegation of powers is improper. Accordingly, the ‘sanctions’ granted by the OR as liquidator to R1 over the Arbitration, have no effect.

Nothing turns on this as the leave granted by me under section 468(2) was not based on the OR’s sanctions.

Thirdly, section 486(2) of CA 2016 is to be read together with the Twelfth Schedule to the CA 2016. The relevant item in the Twelfth Schedule provides:

bring or defend any action or other legal proceedings in the name or on behalf of the company; …

Konsesi argues that the phrase “bring or defend any action or other legal proceedings” must necessarily mean that the action or other legal proceedings are pending and have not concluded. It relies on Bank Bumiputera v Syarikat Gunung Tujuh [1990] 1 MLJ 298 where Haider J (as he then was) said: “The word ‘proceeding’ indicates a step ‘towards’ judgment and the rule, therefore, applies only when judgment has not been entered …” (Emphasis added).

It is argued that as the Arbitration concluded with the Final Award, leave nunc pro tunc is no longer available to retrospectively validate the Arbitration.

This is incorrect, and misunderstands the effect of leave granted nunc pro tunc. It is granted retrospectively validating proceedings which were improperly commenced. The Arbitration, if so commenced, is not considered void, and the Final Award issued is perfectly valid.

Fourthly, hardship needs to be shown. Here, to set aside the NPT order and the Arbitration Award would mean that R1 and R2 would have to commence fresh arbitration proceedings, resulting in the wastage of costs and time. This would constitute sufficient hardship within Lai King Lung (practising as advocate and solicitor under the name and style of Messrs Chris Lai, Yap & Partners, advocates and solicitors) & Anor v. Merais Sdn Bhd [2020] 5 MLJ 614 at para 23, as I held in Tan Aik Ling v CT World Construction (supra) at paras 53 to 60. No reference to 486(2)

Fifthly, it is claimed that R1 failed to make any reference to section 486(2) in the PW8 Notice of Motion. It was therefore said to be misleading and the Court’s power under section 486(2) was not properly invoked.

With respect, this application for leave nunc pro tunc was made ex parte and I was in no way misled by the absence of an express reference to section 468(2). Indeed, in the application to set aside the NPT Order, an express reference was made to section 468(2) by Konsesi. No prejudice was suffered by any interested party. The objection has nothing in it.

Sixthly, the claim is that R1’s application for the NPT Order is an abuse of process.

On 13.09.2024, Konsesi’s initiated PW542 to set aside the 1 st Sanction. R1 had applied to intervene in PW542 on 13.12.2024. It was argued that R1 applied to intervene to defend the invalidity of the OR’s 1st Sanction. This is said to be in contradiction of R1’s application in PW8 filed on 08.01.2025 to protect and validate the Arbitration Award.

It is argued that R1 had repeatedly elected to take the position that the 1st Sanction granted by the OR was valid. As such, R1 is bound by its election. And it is now estopped from adopting an inconsistent position by claiming that the NPT Order was effective.

In the same vein, it is said that the filing of these parallel proceedings on the same subject matter constitutes multiplicity or to taking inconsistent positions amounting to an abuse.

With respect, I do not accept this. One must remember that the previous practice was to obtain permission from the liquidator to proceed with proceedings and not to obtain Court sanction. This all changed with Oren Ventues (supra) as upheld in the Court of Appeal. I disagree that R1 is precluded from changing its stand to avoid pursuing an illegal option by relying on the OR’s unlawful sanctions; R1 may proceed to obtain to obtain proper leave nunc pro tunc orders notwithstanding previous stands taken.

Lastly, the Senior Assistant Registrar directed Konsesi to refile the application under a fresh case number pursuant to practice direction 1 of 2018. Konsesi had apparently maintained both applications in PW8 and PW186. I accept that Konsesi filed this PW186 in compliance with the Court’s direction. I see nothing to suggest bad faith. Further, there was no prejudice caused to the Respondents or a substantial miscarriage of justice.

However, as is apparent, Konsesi took all steps to defeat the Arbitration Award by attacking the NPT Order with every conceivable procedural objection. It seems to me that Konsesi had every opportunity to contest its disputes on their merits with R1/R2 in the Arbitration and lost.

Having lost the application to set aside the NPT Order and thereby the Arbitration Award itself, Konsesi persists in further attacking the Arbitration Award by this Appeal. The objective facts suggest that Konsesi has and is taking every step to deny R1 and R2 the fruits of the Arbitration. I cannot help but think that the appropriate remedy for Konsesi is within the Arbitration process.

For these reasons, I dismissed Encl 1 of PW 186 with costs of RM10,000 subject to allocator. Dated the 2nd day of August 2025 ........................t.t.............................. YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISIONER OF THE HIGH COURT HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Case References: • Badiaddin Bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393 • Lai King Lung (practising as advocate and solicitor under the name and style of Messrs Chris Lai, Yap & Partners, advocates and solicitors) & Anor v. Merais Sdn Bhd [2020] 5 MLJ 614 • Mansion Properties Sdn Bhd v Sham Chin Yen & Ors [2021] 1 MLJ 527 • Novabrite Lighting Sdn Bhd v Emrail Sdn Bhd (Balaranee Construction, proposed intervener) [2024] MLJU 2986 • Sabah Forest Industries Sdn Bhd (receiver & manager appointed) & Anor v Chief Minister of The State of Sabah [2022] 1 LNS 3086 • Small Medium Enterprise Development Bank Malaysia Bhd v. Oren Venture Sdn. Bhd. & Ors [2022] 6 CLJ 148 • Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU 2479 • Winstech Engineering Sdn Bhd v ESPL (M) Sdn Bhd [2014] 3 MLJ 1 Counsel for the Applicant: Solicitors: Dhinesh Bhaskaran + Abu Daud Abd Rahim + Nasbal Harun + Wong Jia Ying + Serena Azizuddin + Raezal Rahim (PDK) Messrs. Azmi & Associates (Kuala Lumpur) Counsel for the Respondent (1): Solicitors: Counsel for the Respondent (2): Solicitors: Zaiful Bahrin + Nor Amirah Messrs. Ariff Bahrin & Co (Bandar Baru Bangi) Wardah Nasuha Jabatan Insolvensi Malaysia Wilayah Persekutuan Kuala Lumpur (Kuala Lumpur) • Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd (Formerly Known As Bousted Trading (1985) Sdn Bhd) [2010] 2 MLJ 749 Legislation Reference: • Companies Act 2016 (“CA 2016”) • Companies Act 1965 Decision Date: 25th June 2025