Malayan Energistik Solutions Sdn Bhd v 1. ) Samudera Wibawa Holdings Sdn Bhd (WA-27NCC-2-01/2022)

SAMUDERA WIBAWA HOLDINGS SDN BHD (Company No.: 1313512-P)

YANG XIAOWEN (China Passport No.: EG5825048 3. CHI YEW LAN (NRIC No.:870119-04-5126)

LIM CHEE YONG (NRIC No.:880124-04-5365)

YANG JINFU (China Passport No.: EG9117594) …DEFENDANTS (Heard Together) IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) SUIT NO.: WA-27NCC-3-01/2022

MANTAB MARINE RESOURCES SDN BHD (Company No.: 1247468-W)

DATO' TAN LIK HOUE (NRIC No.:610705-10-5485) …PLAINTIFFS

SAMUDERA WIBAWA HOLDINGS SDN BHD (Company No.: 1313512-P)

SAMUDERA WIBAWA SDN BHD (Company No.: 938815-K)

YANG XIAO WEN (China Passport No.: EG5825048)

CHI YEW LAN (NRIC No.:870119-04-5126)

YANG JINFU (China Passport No.: EG9117594)

LIM CHEE YONG (NRIC No.:880124-04-5365) …DEFENDANTS

This judgment deals with 2 different but related actions which were heard together. The subject matter relates to a failed venture to extract, excavate and dredge marine sand from a concession area in Rompin, Pahang. The failure gives rise to the claims by the Concession Holder and its appointed contractor against the sub-contractor engaged to perform the dredging activities.

The Concession Holder who subsequently dealt directly with the sub-contractor alleged that the sub-contractor had fraudulently misrepresented that the dredger deployed was fit for the purpose and that it possessed the necessary experience and competence to carry out the dredging activities. The Concession Holder further claimed against the sub-contractor and its directors for conspiracy to injure by unlawful means. The shareholder of the Concession Holder who executed the contract with the sub-contractor also claimed for breach of the contract.

Simultaneous to the Concession Holder’s action, the contractor (whose contract with the sub-contractor was effectively discharged due to its financial inability), also filed an action against the sub-contractor, its directors and officers for fraudulent misrepresentation, conspiracy to injure and breach of the contract.

The evidence shows that the failure of the venture was not due to any wrongdoings on the part of the sub-contractor but due to the unsuitable sedimentary profile of the concession area which consisted mainly of fine sand, silt and mud with insufficient marine sand depth to make the dredging activities economically viable.

The Court found both the claims by the Concession Holder and the contractor to be without merits and dismissed their claims with costs and allowed part of the sub-contractor’s counterclaims against the Concession Holder for payments due as agreed. Preliminary background

The two suits before this Court, namely WA-27NCC-2-01/2022 (“Suit 2”) and WA-27NCC-3-01/2022 (“Suit 3”) were tried together. Expert witnesses were called and a hot-tubbing session was conducted on the sedimentary profile at the concession area.

Suit 2 was initiated by the sub-contractor, Malayan Energistic Solutions Sdn Bhd (“MES”) against the following the following defendants: a) Samudera Wibawa Holdings Sdn Bhd (“SWH”); b) Yang Xiao Wen (“Yang”); c) Chi Yew Lan (“CYL”); d) Lim Chee Yong (“LCY”); e) Yang Jinfu (“Jinfu”).

SWH has an associated company, Samudera Wibawa Sdn Bhd (“SWSB”) who is a defendant in Suit 3 but nor Suit 2. CYL and Jinfu are directors of SWH. Yang is a director of SWSB where LCY is its manager.

Suit 3 was initiated by Mantab Marine Resources Sdn Bhd (“Mantab Marine”) and Dato’ Tan Lik Houe (“Dato’ Tan”) against the following defendants: a) SWH; b) SWSB; c) Yang; d) CYL. Dato’ Tan is the shareholder of Mantab Marine and one Datuk Wira Chia Shee Tong Tom (“Datuk Wira Tom”) is a director of the company and a material witness. The claims in Suit 3 originally included LCY and Jinfu, however the claims against them were subsequently withdrawn.

MES, the contractor, was appointed as the Dredging Operator of Mantab Marine, the Concession Holder, pursuant to a contract dated 5.5.2021 (“the Main Contract”). Pursuant to the Main Contract, MES was required to carry out marine sand extraction activities at Mantab Marine’s concession site at Kuala Rompin Pahang (“the Concession Area”), to extract, excavate and transport certain specified marine sand to Mantab Marine’s purchaser’s mother vessel, and to supply vessels and equipment for that purpose (“the Works”).

MES then entered into a contract with SWH on 24.5.2021 (“the Sub-Contract”) for SWH to carry out MES’s obligations under the Main Contract to Mantab Marine.

Under the Sub-Contract, SWH agreed to supply 1 dredger, WEI YANG 002 (“the Dredger”) and 4 sand carrier vessels, namely, WEI YANG 016, JIA SHENG 218, JIA SHENG 219 and JIA SHENG 221 (collectively “the Vessels”) for the purposes of excavating and transporting the marine sand for a term of 12 months. Further, MES agreed to pay the first monthly charges of RM 1,940,000.00 upon 7 working days from the arrival of the Vessels at the Concession Area (“the 1st Monthly Fee”) and a sum of RM 500,000.00 as mobilisation fee (“the Mobilisation Fee”). The Main Contract also required MES to pay a sum of RM 1,940,000.00 as deposit upon the execution of the Main Contract (“the Deposit”) together with a sum of RM 500,000.00 as Mobilisation Fee.

On 10.9.2021, SWH informed MES that it had completed the Port Clearance Out process for 2 of the Vessels, namely, WEI YANG 002 and WEI YANG 016 from Port Klang to Malacca with 32 crews onboard.

On 16.9.2021, a meeting was held between MES and SWH where: a) the date of mobilisation of the Vessels and the issue of payments were agreed; b) MES would make payment of the 1st Monthly Fee after the Vessels arrived at the Concession Area; c) the Port State Control (“PSC”) inspection would only be conducted on 2 of the Vessels, namely, WEI YANG 002 and JIA SHENG 218.

The two said vessels arrived at the designated coordinates on 20.9.2021 and SWH requested MES to arrange for the provision of bunker diesel and fresh water pursuant to the terms of the Sub-Contract.

On 28.9.2021, SWH requested for the payment of the 1st Monthly Fee of RM 1,940,000.00.

Notwithstanding the aforesaid, no payment was forthcoming from MES. As a result of the non-payment of the 1st Monthly Fee, MES’s obligations under the Main Contract had still remained unperformed up to 7.10.2021.

The aforesaid led to a meeting on 7.10.2021 where Mantab Marine (represented by Dato’ Tan, Datuk Wira Tom and one Tan Jyy Mei) met with MES (represented by Jo Khalid, Jannio, Yasir and Ngiam Kee Tong) and SWH (represented by Yang, CYL and Goh Wen Ling) to discuss and to resolve the issues. Also present were Cheah Min Long and his secretary who were representatives of Long Island Development Sdn Bhd, the financier of MES. Tan Jyy Mei, Ngiam Kee Tong and Goh Wen Ling were the solicitors for the respective parties (“the Meeting dated 7.10.2021”).

At the Meeting dated 7.10.2021, Mantab Marine claimed that Yang and CYL had represented to Mantab Marine and MES the following: a) that SWSB intended to and were able to provide the services and obligations as described under the Sub-Contract in a competent, reliable and professional manner; and b) that the Vessels, particularly the Dredger, equipped with vacuum suctions, were fit for the purpose of performing the Works under the Sub-Contract. (“the Representations”)

Mantab Marine and Dato’ Tan claimed that they had accepted the Representations made by Yang and CYL to be true. There was nothing to indicate to Mantab Marine and Dato’ Tan that the Representations were false nor was there anything to suggest that Yang and CYL were being dishonest.

Initially, in order to ensure that SWH would continue with its obligations namely, to supply the Vessels, particularly Dredger, and to dredge the marine sand at the Concession Area under the Sub-Contract, Mantab Marine had offered to pay SWH on behalf of MES for the outstanding sums thereunder. However, MES rejected Mantab Marine’s offer to do so.

Given the circumstances, Mantab Marine agreed instead to pay directly to SWH the sum of RM1,164,000.00 on the condition that SWH would commence work immediately. As a compromise, it seems that SWH had agreed to discount the 1st Monthly Fee of RM 1,940,000.00 to RM 1,164,000.00.

Right after the meeting on 7.10.2021, Dato’ Tan, as Mantab Marine’s shareholder started to make payments of the sum of RM1,164,000.00 to SWSB over 13 different tranches. SWSB is the owners of the Vessels whilst SWH is the company carrying out the business of dredging, drilling, blasting, marine sand reclamation and related business.

Significantly, on 7.10.2021, a letter was drawn up by SWH’s solicitors to reflect the aforesaid arrangement which according to SWH was vetted and agreed to by Jo Khalid and his solicitors on behalf of MES. However, MES later refused to sign the letter claiming that Jo Khalid did not have MES’s mandate to make decision on its behalf.

The aforesaid led to SWH claiming that MES had breached the Sub-Contract and it proceeded to forfeit the Deposit paid sometime on 14.10.2021 and thereafter demanded the immediate payment of the 1st Monthly Fee. This in turn prompted MES to claim that SWH had breached various terms in the Sub-Contract and sometime in early November 2021, purporting to terminate the Main Contract. This is the subject matter of Suit 2.

In the meantime, on 15.10.2021, Yang and CYL visited Dato’ Tan at his house, where Mantab Marine and Dato’ Tan claimed that both Yang and CYL had repeated the Representations (“Meeting dated 15.10.2021”). On the same day, Dato’ Tan, on behalf of Mantab Marine and Yang, on behalf of the SWSB executed the Letter of Engagement of Services (“the New Contract”). The New Contract was prepared at Yang’s request.

Quite clearly, by the New Contract, instead of SWH as the contracting party performing the Works under the Sub-Contract for MES, the Works had been taken over by SWSB instead as the new contracting party, this time directly performing the Works for Mantab Marine. The New Contract was to resolve MES’s refusal, omission and or failure to fulfil its payment obligations to SWH under the Sub-Contract. This was within the knowledge of MES and was never objected to. Indeed, it was never MES’s case that SWH by procuring SWSB to enter into the New Contract with Mantab Marine for the Works under the Sub-Contract, that SWH had breached and repudiated the Main Contract. On the contrary, both MES and SWB had treated themselves as being discharged of their respective obligations under the Main Contract with the coming into existence of the New Contract. This fact will becoming significant in determining the parties’ respective claims in Suit 2 below.

On 16.10.2021, a test run, attended by Mantab Marine and SWSB was conducted at the Concession Area to extract, excavate and dredge the marine sand. During the test run, it was discovered that little and or no marine sand as specified in the Main Contract could be extracted.

Yang and CYL informed Mantab Marine that the Dredger could not dredge any sand because there was no sand at the Concession Area. Subsequently, at the trial, SWH and SWSB revised their position to state that there was no suitable sand at the Concession Area.

On 18.10.2021, a 2nd sampling test was conducted. The finding indicated that there was very little marine sand suitable for excavation at the tested sites. The test was done in the Concession Area and was overseen by SWSB’s vessel manager.

Under Datuk Wira Tom’s instructions, SWSB shifted their extraction activities to a nearby concession area belonging to one KOF Holdings Sdn Bhd (“KOF Concession”) at the Rompin river mouth. It was agreed that to facilitate the dredging operations, KOF would excavate a trench at the river mouth to a depth of 5 meters. However, upon arrival at the KOF Concession on 28.10.2021, it was found that the trench at the river mouth had not been excavated as agreed. Consequently, the Vessels were unable to proceed, rendering the attempt to excavate at the KOF’s site unsuccessful.

As there was no marine sand suitable to be excavated by the Dredger both at the Concession Area and at the KOF Concession, the Vessels were left idling from 2.11.2021 to 4.11.2021, Meanwhile on 2.11.2021, a circular was issued by the Jabatan Laut Malaysia that the monsoon season would begin from 3.11.2021.

On 5.11.2021, the Vessels left Rompin as SWSB claimed that Mantab Marine and or Dato’ Tan had defaulted in their payment obligations for the 1st Monthly Fee under the New Contract. Parties’ respective claims in Suit 3 and Suit 2

Premised on the aforesaid failure to dredge the marine sand pursuant to the New Contract, Mantab Marine claimed that the Representations were false because it had been proven that the Dredger cannot dredge any sand at all. Mantab Marine claimed that Yang and CYL had made fraudulent representations as they clearly knew that the Representations were false. They were not able to deliver and or had no intention to deliver what were represented. The contention was that the only reason for making the Representations was to induce Mantab Marine to make payment and to enter into the New Contract to Mantab Marine’s detriment.

It is Mantab Marine’s case that when Yang and CYL made the Representations, they knew that the Representations were false or the Representations were made without caring whether the same were true or false. Mantab Marine claimed that SWSB’s Dredger, Wei Yang 002 was not suitable and fit to dredge sand at Mantab Marine’s Concession Area.

Mantab Marine further claimed against Yang and CYL for conspiring with SWH and SWSB by using the companies as engines to perpetrate the fraud. Both Yang and CYL were at the material times the directors and or shareholders of the companies.

Finally, Mantab Marine, through Dato’ Tan as the contracting party to the New Contract, claimed that SWSB had breached the terms of the New Contract when it failed to dredge any marine sand from the Concession Area as stipulated under the same.

SWSB has in turn counterclaimed for a sum of RM517,333.2 being the sum for the Works rendered for 8 days from 28.10.2021 to 4.11.2021 pursuant to Clause 3(b)(ii) of the New Contract and a further sum of RM 500,000.00 being the mobilization fees for 5 days during the monsoon period pursuant to Clause 3(b)(iii) of the New Contract.

Notwithstanding that SWSB had entered into the New Contract with Mantab Marine to perform the Works under the Sub-Contract and the fact that both MES and SWH had effectively been discharged from their respective further obligations under the Sub-Contract, both the parties continued to make claims against each other.

In Suit 2, MES claimed against SWH, Yang, CYL, LCY and Jinfu for its losses following from MES’s termination of the Sub-Contract premised upon SWH’s purported breaches of the Sub-Contract. MES claimed for loss of earnings, the recovery of the Deposit paid amounting to RM 1,940,000.00, expenses incurred amounting to RM 715,216.50 and general damages.

In the meantime, SWH has in turn counterclaimed for the 1st Monthly Fee of RM 1,940,000.00 and the mobilisation fees during monsoon of RM 500,000.00 from MES. Yang, CYL, Lim Chee Yong and Yang Jinfu also filed their counterclaim for general damages and costs for malicious prosecution and abuse of process.

Based on the aforesaid, this Court shall first consider if Mantab Marine’s and Dato’ Tan’s causes of action in Suit 3 for fraudulent representations, conspiracy to injure and breach of the terms of the New Contract have any merits. Each of these causes of action shall be considered in turn.

The claims for Fraudulent Representation are premised on the representations by Yang and CYL that were made during the Meetings dated 7.10.2021 and 15.10.2021.

Yang and CYL had represented that: a) their Vessels were ready, fit for purpose and capable of performing the Works; b) SWH and SWSB had the necessary experience and competence to carry out the Works.

According to Mantab Marine, it was in reliance on the Representations that Dato’ Tan:

paid RM1,164,000.00 to SWSB through thirteen (13) instalments from 7.10.2021 to 14.10.2021;

entered into the New Contract dated 14.10.2021 (executed on 15.10.2021).

Mantab Marine claimed that the Representations were made by Yang and CYL fraudulently and further that SWH, SWSB, Yang and CYL had by the unlawful means of the Fraudulent Representations conspired to injure Mantab Marine and Dato’ Tan, resulting in them sustaining loss and damages.

The sole basis for the Fraudulent Representations rests on the fact that SWH and SWSB wre unsuccessful in dredging any marine sand from the Concession Area and or from the KOF Concession as required under the New Contract.

Underlying the Fraudulent Representations claims are that the Representations were made knowing that they were false and or that they were made recklessly in disregard of the following facts, namely, that: a) SWH, SWSB, Yang and CYL had no and or had inadequate experience and or competence in the dredging and excavation of marine sand; b) the vessel WEI YANG 002 being a Sand or Vacuum Suction Dredger (“SSD Dredger”) was not an appropriate and suitable vessel for the purposes of performing the Works; c) the Concession Area and the KOF Concession had no marine sand and or suitable marine sand to be excavated and or dredged. (“the Underlying Facts”)

There is no dispute that the burden is on Mantab Marine and Dato’ Tan as the claimants to establish on the balance of probabilities the Underlying Facts and that these facts were known and intentionally concealed from them.

Having heard the testimonies of the parties, in particular, the expert witnesses, it is abundantly obvious to me that the reason for the failure of the dredging activities at the Concession Area had nothing to do with the Representations at all but the fact that Concession Area did not have the necessary sedimentary profile with the requisite marine sand depth for any economically viable extraction, excavation and dredging of the marine sand as required by Mantab Marine to be carried out.

Indeed, throughout the trial, the main focus was on the Dredger’s failure to extract the marine sand with hardly any testimonies establishing any dishonest intent and or the alleged deliberate concealment of any facts by Yang and CYL to substantiate the causes of action based on fraudulent misrepresentation and conspiracy to injure.

On the suitability or appropriateness of using the Dredger, Mantab Marine had suggested at the trial that SWSB ought to have used a Cutter-Suction Dredger (“CSD Dredger”) instead of the Dredger, which was a vacuum suction dredger (“SSD Dredger”) for the performance of the Works. In this regard, it is not even demonstrated that the use of a CSD Dredger would have successfully performed what the SSD Dredger had failed to so, let alone evidence showing that Yang and CYL knew that the SSD Dredger was not a suitable dredger but nevertheless had intentionally concealed the same to Mantab Marine.

In fact, there is no expert evidence procured by Mantab Marine to support its contention that it was wrong for SWSB to deploy the SSD Dredger to perform the extraction, excavation and dredging works at the Concession Area and at the KOF Concession. In this regard, Mantab Marine’ own expert witness, Yasir, a Hydrographic Surveyor, had opined that a trailing suction hopper dredger (“TSHD Dredger”) (as opposed to a CSD Dredger) to be the appropriate and suitable vessel to be used for the excavation and sand mining works at the Concession Area. In other words, even Mantab Marine’s own expert witness did not opine that a CSD Dredger would be more suitable for the excavation of marine sand at all.

Yasir had expressed the aforesaid opinion in the technical document entitled ‘The Coastal Hydraulic Study for Proposed 30 km Sand Dredging Project in the Continental Shelf of Pahang Coastline for Mantab Resources Sdn Bhd” in June 2018 prepared by DZS Marine Sdn Bhd to which Yasiris a director and in fact served as the Project Director for the project (“the Hydraulic Report”).

2.2 Method Statement of Sand Mining 2.2.1 Equipment A trailing suction hopper dredger (TSHD) will be deployed for the sand mining work. The characteristics of the TSHD which are equipped with a hold (hopper) and a dredge installation to load and unload itself make it suitable for deep sea navigation. The TSHD is equipped with (refer Figure 2.1): • Suction pipe with suction mouth, called draghead that is dragged over the seabed while sand mining; • Dredge pump to suck up the loosened soil by the draghead; A hold (hopper) in which the material suck up is dumped; An overflow system to discharge the redundant water.

The purpose of the Hydraulic Report was to support Mantab Marine’s application for the concession permit to extract marine sand. Yasir confirmed during cross examination that both the Hydraulic Report and his Expert Report dated 31.7.2018 had served as the common regulatory function in facilitating the project approvals from the relevant authorities. Yet, in his Expert Opinion, Mr Yasir made no mention of the Hydraulic Report at all.

This means that the approval for the concession was premised on the deployment of TSHD technology and that Mantab Marine as the Concession Holder was bound to follow the approved method. WFM: Okay, right. Now, anda setuju, mengikut laporan ini, sebenarnya trailer suction hopper dredger harus digunakan untuk kerja-kerja pengorekan mengikut laporan ini? PW6: Mengikut laporan ini, saya setuju. WFM: Part of. So, setuju sebarang representasi dalam repot ini perlulah benar? PW6: Ya. WFM: Setuju representasi dalam repot-repot ini perlu diikuti oleh pemilik konsesi? PW6: Ya.

Notwithstanding the aforesaid, Mantab Marine had appointed SWSB to carry out the Works knowing that SWSB would be using the SSD Dredger which in fact deviated from the approval given for the concession. It is therefore disingenuous for Mantab Marine to suggest at the trial that SWSB ought to have employed a CSD Dredger instead.

More important and in truth however, based on the opinion of SWSB’s expert witness, Vincent Khoo, a Class One Marine Engineer, none of the types of dredgers, namely, TSHD, SSD and CSD would be suitable to dredge the marine sand at the Concession Area. This is because, contrary to Yasir’s Expert Report that the range of the marine sand thickness at the Concession Area was between 2 to 3 meters, the actual thickness of the sand was only about 0.6 meters.

The aforesaid thickness of only 0.6 meters is based on the Expert Report by Ernest Khoo, a licensed land surveyor and hydrographic surveyor, who was called as SWSB expert on the sedimentary profile at the Concession Area. In fact, in the Joint Experts’ Report between Yasir and Ernest Khoo that was agreed for the hot-tubbing, Yasir had agreed to accept Ernest Khoo’s opinion as regards the thickness of the marine sand:

4.0 ISSUES AND FACTS AGREED BY BOTH EXPERTS The following are the facts agreed by the PHS and DHS: i. The penetration of core sample showed that the thickness of the sand layer was up to approximate 0.6m depth. ii. The method of sand suction did not fall under the scope and expertise of the HS.

The aforesaid was once again confirmed by Yasir during his cross examination: DW4: Item 4.0. That's what both of us have agreed lah on our hot tubbing season that the thickness of sand is 0.6 meters lah. But his report showing that's 2 meters. Encik Yasir. Tadi keterangan Encik Yasir, adalah, mengikut kajian Encik Yasir, ketebalan pasir tersebut adalah di antara 2 hingga 3 meter. Tapi dalam joint report ini, Encik Yasir nampaknya setuju bahawa ketebalan pasir cuma 0.6 meter tebal sahaja. PW6: Based on study, Yang Arif. Based on? PW6: Based on dia punya study sahaja lah. Tapi you setuju? PW6: Itu dia punya study [Inaudible: 12:26:15] Itu saya tak nafikan. So, jadi Encik, Encik Yasir setuju bahawa mengikut kajian Encik Ernest Khoo dalam tahun 2023, ketebalan pasir cuma 0.6 meter tapi menurut kajian Encik Yasir di tahun 2018, ketebalannya ialah 2 hingga 3 meter. Alright. Yes. Anything else?

More significantly, based on Marine Engineer Vincent Khoo’s testimony, because the Concession Area contained an abundant of corals and with sediments containing a high amount of fine sand, silt and clay with particle size smaller than 0.2 mm, this means that the fine sand when it reaches the Dredger, simply could not settle down and would eventually be flushed out together with the seawater. As a result, Vincent Khoo opined that it would take a long time for the operator of the Dredger to suck out the marine sand such that it would take 45 minutes to reach only 5 to 6 meter cube of sand rendering it not an economically viable venture at all. WFM: Now Mr. Vincent Khoo, I would like to refer you now to Enclosure 98 in Suit 2, your report. And can you see page 15, page 15 of that report of yours? Page 15.5. I have given an explanation about the vessel and paragraph 3, you did a cross-referencing to the Defendant's expert affidavit. Then you say, it's worth noting there's an abundant of coral in a particular region. At a depth of 0.5m, all sediment samples contain a high amount of fine sand, silt and clay with particle size smaller than 0.2mm. Then you say, this could possibly pose a challenge for a sand suction vessel like Wei Yang 002 to perform her duty accordingly. Can you explain in your own words why this poses a challenge for the sand suction vessel of Wei Yang 002? DW5: Okay. Wei Yang 002 is a sand suction vessel, mainly using the, the principle of vacuum system to suck the sand out from the sea. Okay. However, when there is a high content of the fine sand, the fine sand when it reach the vessel, it cannot settle down. It will be flushed out together with the, the seawater eventually. And that is why it take a long time for the owner or for the operator to suck out so little of sand as per, as per the picture shown on the same page. Under normal circumstances, it will take very fast to complete the vessel. But in this case, it took them 45 minutes to reach only 5 to 6 m3. So it is very less and economically, it's not viable as well.

There is no question that the condition, quality and composition of the sediments at the Concession Area will affect the economic viability of the excavation and dredging operation. Indeed, it was precisely because the depth of the sand was only 0.6 meters and the presence of the high content of fine particles of sand at the Concession Area that led Vincent Khoo to conclude that none of the dredger types that could have been deployed would have been able to perform the extraction, excavation and dredging of the marine sand to meet the specifications as stated in Section 7 of the contract reproduced below: SECTION 7

EXTRACTION, EXCAVATION DREDGING OF MARINE SAND AT THE CONCESSION AREA TRANSPORTING MARINE SAND FROM THE CONCESSON AREA TO THE LOCATION AND ALL EXTRACTED MARINE SAND SHALL MEET THE FOLLOWING SPECIFICATIONS:

MUD CONTENT BELOW 1% OR NOT MORE THAN 1.5%;

MOISTURE LEVEL BELOW 3% OR NOT MORE THAN 5%;

FINENESS MODULUS SHALL RANGE FROM 2 TO 3.

In this regard, in coming to my conclusion on the sedimentary profile and the sand composition at the Concession Area, I am more inclined to accept the expert report of Ernest Khoo to that of Yasir. As a start, I agree that Yasir is not totally an independent and impartial party. He had been involved with the application to secure the licence to excavate marine sand from the Concession Area and had played the role throughout the project acting as a liaison between parties and as consultant to the project. He also attended various meetings on operation matters and participated in the meetings on 7.10.2021 and 17.10.201.

An expert’s primary duty is to the Court and not to the party instructing them. If an expert had previously acted as a consultant for the party instructing him, he may have already formed or advocated for a particular position for which he is constrained to maintain. This raises a concern that the expert’s opinion may not be truly independent but shaped by his earlier role. This undermines his credibility as the expert may in fact be merely advocating for the party instead of presenting an impartial view. Put it simply, the expert is ‘a hired gun’ with an interest in the outcome of the case.

Furthermore, in this case, Yasir’ Expert Report was prepared in 2018 and for the specific purpose of supporting the application to secure a licence to extract, excavate and dredge for marine sand at the Concession Area. The report is out-dated as the sedimentary conditions at the Concession Area in 2021 at the time the Works were actually carried out could be very different.

Indeed, the Environmental Impact Assessment Report of which Yasir’s Expert Report formed an integral part, is deemed null and void if the project did not commence within 2 years from the date of approval of the project issued by Jabatan Alam Sekitar Negeri Pahang on 10.10.2018.

Sekiranya projek ini tidak dilaksanakan dalam tempoh dua

tahun dari tarikh surat kelulusan ini dikeluarkan, kelulusan Laporan EIA ini dengan sendirinya terbatal.

In fact, Yasir conceded during cross examination that there is a substantial time gap between the preparation of his Expert Report in 2018 and the commencement of the dispute in 2021. He further acknowledged that the changes in marine or geological conditions over that period could affect the accuracy and reliability of his conclusions regarding the extractability of the marine sand at the Concession Area. WFM: Some questions for the Plaintiff's expert? Okay, Encik Yasir ya. Encik Yasir pagi tadi telah memberitahu Mahkamah bahawa pihak Mantab telah melantik seorang, satu syarikat EIA Consultant [Inaudible: 14:34:07], iaitu Yes Enviro. Yes Enviro adalah main consultant dan Yes Enviro telah melantik syarikat Encik Yasir untuk, sebagai sebahagian daripada pasukan untuk membuat EIA report. Now, kelulusan untuk laporan EIA ini, anda setuju adalah, adalah untuk tempoh 2 tahun sahaja dan untuk soalan itu, saya akan merujuk anda ke satu kelulusan laporan EIA untuk kes ini, di dalam bundle di Enclosure 72 untuk

Suit 3. 72 untuk Suit 3, iaitu Bundle B1 di muka surat Okay? Muka surat 20. perenggan 6 ya. Ini adalah kelulusan untuk laporan EIA yang mengatakan bahawa sekiranya projek ini tidak dilaksanakan dalam tempoh 2 tahun dari tarikh surat kelulusan dikeluarkan, kelulusan laporan EIA dengan sendirinya terbatal, ya? So EncikiYasir setuju, apa- apa laporan yang dibuat hanya sah untuk tempoh 2 tahun? Setuju atau tidak? PW6: Saya setuju dengan... WFM: Setuju? PW6: Setuju sebab sekiranya tiada, tiada aktiviti yang dilaksanakan within 2 years dengan secara, ini bukan terbatal, maksudnya dia akan kita kena redo balik. Dan bilakah Encik Yasir membuat repot Encik Yasir?

Dan bilakah Encik Ernest membuat? PW6: 2022. Jadi perbezaan tempoh tahun tersebut, ada apa-apa impact tak kepada keputusan? PW6: Melalui pengalaman saya, Yang Arif kan, biasanya di Laut China Selatan, dia memang ada perbezaan Sedimentation movement, [Inaudible: 11:58:53] sebab the monsoon season. So pasir come and go. YA: Sama juga? Jadi bagaimana saya, bagaimana boleh kita explain keputusan yang berlainan apart from perbezaan masa. PW6: Perbezaan masa empat tahun. YA: Ya, empat tahun berbeza. Method sama, tempat sama. PW6: Tempat sama. YA: Masa tak sama. PW6: Masa dia tak sama. It yang saya cakari perbezaan dari segi masa dan tempat. Kalau macam Yang Arif kata, kalau kita nak counter check balik benda semua, itu boleh buat apa, kajian sama, kalau nak tahu betul ke tak betul benda itu.

In addition, Yasir’ Expert Report also failed to apply the JMG Guidelines for marine sand classification which are the authoritative standards for determining the composition, quality and suitability of marine sand for extraction. Instead, Yasir adopted a self-derived or non-standard classification scheme categorising seabed materials into 3 broad groupings as follows:

In contrast, the JMG Guidelines prescribed a detailed and scientific classification system based on measurable and detailed parameters. Sand must meet minimum threshold for coarseness and purity before it can be certified as suitable for extraction and commercial use. The non-application of the JMG Guidelines in Mr Yasir’s Expert Report undermines its usefulness and scientific integrity of the conclusions.

Finally, Yasir himself did not state in his Expert’s Report that the sand specifications stipulated in the contract could be extracted, excavated and dredged from the Concession Area. WFM: Sekarang saya ingin menaikkan soalan tentang klasifikasi pasir dalam laporan Encik Yasir dan saya ingin merujuk kepada Bundle B1 di Suit No. 3, B1 Enclosure 72, di muka surat 68, ya? 68. Dan lihat. Ini adalah klasifikasi atau spesifikasi, spesifikasi pasir yang telah diberikan di dalam satu kontrak di antara Mantab dengan MES. Okay. Boleh lihat di sana? Mud content below 1% or not more than 1.5%. Boleh lihat? Ada? This one, yes. Okay, lihat sana, moisture level below 3% or not more than 5%. Dan finest modulus shall range from 2 to 3. Spesifikasi pasir. Now, saya lihat di sana, spesifikasi pasir dan saya ingin merujuk anda sekarang ke laporan anda, okay. Laporan anda di Bundle C1, okay. Di C1, Enclosure, Lampiran 95 Suit No. 2. Okay. Setuju jika anda lihat laporan anda, okay, laporan anda tidak menunjukkan bahawa spesifikasi pasir di dalam kontrak ini dapat dipenuhi. Setuju? Sebab laporan anda tidak ada butir-butir spesifikasi pasir. PW6: Untuk ini, saya tak terlibat dengan apa, maksijdnya tak involve dengan yang contract, contract. [Inaudible: 14:41:15] saya boleh beritahu,

It is my judgment that the aforesaid put paid to Mantab Marine’s claims premised on the cause of action for Fraudulent Representations. Quite apart from the fact that Mantab Marine has not even discharged their burden of showing any element of fraud in the representations made by Yang and CYL [See: ALW Car Workshop Sdn Bhd v. AXA Affin General Insurance Bhd [2019] 4 MLJ 561; Yeohata Machineries Sdn Bhd & Anor v. Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810], namely, that SWH and SWSB had the requisite experience and competence and that the Vessels used including the SSD Dredger were fit for their purpose, the true reason for the failed venture lies with the fact that there was simply no suitable marine sand to be economically extracted, excavated and dredged from the Concession Area at all.

Mantab Marine was fully appraised of the sampling tests results and never disputed the same at the material times. In fact, Datuk Wira Tom had instructed for the sampling results to be kept confidential to avoid the inflation of the price of the marine sand.

Learned counsel for Mantab Marine contended that SWSB had an implied contractual duty to inspect the Concession Area and to determine that the same contained suitable marine sand for the extraction, excavation and dredging to meet Mantab Marine’s specifications for its purchaser. It was contended that by failing to do so, SWSB had been reckless in making the Representations.

With respect, there is simply no legal basis to impose on SWSB the obligation to conduct its own independent inspection and testing of the soil composition at the Concession Area under the New Contract. Most certainly, there is no provision in the New Contract imposing on SWSB, either expressly and or by implication an obligation to determine the soil condition at the Concession Area, let alone to ensure that the same contained suitable sand for extraction and excavation of the same.

As the dredging operator, SWSB’s expertise lies in mobilising the dredging equipment and executing the extraction, excavation and dredging works. Whilst this would include assessing the workability or suitability of the soil during the dredging operation, that it, whether it’s sand, silt or clay and how the equipment should be adjusted, they are not experts in determining the soil composition which requires special knowledge in granulometry, mineral contents and surveying skills.

The marine engineers and marine geologists are the experts in the aforesaid fields. In the present case, SWSB had never held itself out to have such capability. In fact, Yang had raised with Datuk Wira Tom his concerns about the availability of marine sand at the Concession Area, particularly, the fact that whilst h had dredged marine sand in Malacca and Klang, he was unsure of the soil condition at Rompin.

Notwithstanding the aforesaid, Mantab Marine had proceeded to engage SWSB to conduct and performed the Works under the New Contract. In truth, Mantab Marine had relied on the Hydraulic Report and Yasir’s expert’s opinion on the composition of the soil at the Concession Area when engaging MES to undertake the Works under the Main Contract.

Once this Court determines that SWSB had no contractual duty, express or implied to conduct any independent inspection and or its own determination of the sedimentary profile at the Concession Area, it must necessary follow that Mantab Marine’s claim based on fraudulent representation by reckless disregard for the actual soil composition of the marine sand at the Concession Area must fall. Indeed, this was conceded by learned counsel for Mantab Marine during oral submissions before this Court.

As regards Mantab Marine’s claims based on the cause of action for conspiracy to injure, I would refer first to the case of Chen Khai Voon v. Lim Beng Guan & Ors [2020] MLRHU 2099 where I had held as follows: “[69] The aforesaid particulars are necessary because a claim of alleged conspiracy between a company and its directors raises considerations which are different from a claim of conspiracy between natural persons. The former frequently requires clarity and involves the interplay between the following common law principles with the essential ingredients for conspiracy, namely:

where the company whose 'mind' is said to be that of its controlling director, whether it is possible for the two to have 'combined' or 'agreed' to conspire. Whilst it has been held that it is conceptually possible for a company to conspire with a director who is its 'controlling and directing mind', the primary facts relied on to support the same must be pleaded [See: Nagese Singapore Pte Ltd v. Ching Kai Huat [2007] 3 SLR 265; [2008] 1 SLR 80 and Lim Leong Huat v. Chip Hup Hup Kee Construction Pte Ltd [2009] 2 SLR 318];

The presumptive rule that a director who authorises a company's breach of contract does not thereby incur tortious liabilities for the breach unless he has conducted himself otherwise than as the company's agent. This is established in Said v. Butt [1920] 2 KB

Hence, the facts relied on to justify a departure from this presumptive rule must also be pleaded. [70] The current trend where only a general statement alluding to 'the company and its directors combining together to reach an agreement to injure' with the view to casting personal liability on the directors under a conspiracy claim, without more, can no longer be countenanced as this is nothing more than a device to lift the corporate veil to hold directors personally liable when in most cases these individuals were merely acting bona fide in discharge of their duties and acting within the scope of their authority. [71] The Singapore Court of Appeal in PT Sandipala Arthaputra & Ors v. ST Microelectronics Asia Pacific Pte Ltd & Ors [2018] 1 SLR 81 held that the Said v. Butt principle was also applicable in considering the liability of a director in a lawful means conspiracy. Said v. Butt principle was interpreted to exempt directors from personal liability from the contractual breaches of their company (whether through the tort of inducement of breach of contract or conspiracy) if their acts, in their capacity as directors, are not in themselves in breach of any fiduciary or other personal legal duties owed to the company. Reference was also made to the academic writing by Associate Professor Lee Pey Woan entitled "The company and its directors as co-conspirators" [2009] SAcLJ

… [89] In the Singapore High Court case of Otech Pakistan Pvt Ltd v. Clough Engineering Ltd [2005] SGHC 98 at [35], Kan Ting Chiu J held: 'Where the allegation is that the defendant had conspired to and had induced the breach qua director, that without more, must imply that the defendant had been acting bone fide and within the scope of his office. 'Bona fide' here is to be taken to mean that the defendant was acting in good faith in the discharge of his office, and not that he was acting in good faith in the action complained of; a director may believe that it is for the good of the company to breach a contract intentionally. In such a situation, the principle [in Said v. Butt] would operate to defeat the claim against the defendant as a matter of law.' [90] It is therefore necessary that facts suggesting that the directors have themselves been guilty of some unlawful act or had acted in breach of their duty to the company be pleaded if the action is to include them as coconspirators with the company.”

The said principle in Said v. Butt [1920] 3 KB 497 was also applied in the High Court case of Q2 Engineering Sdn Bhd v. PJI-LFGC (Vietnam) Ltd & Ors (No. 2) [2013] MLRHU 388 where it was held that: “[99] … in Said's case (supra) the alleged inducer was the managing director of the contracting party alleged to be in breach (the theatre), and in Imperial Oil's case (supra) the alleged inducers were the directors and shareholders of the contracting party in breach. In both cases the pleas were rejected, as the parties charged to be inducers were not 'strangers', both being the decision-makers, or in other words the controlling minds or alter egos, of the contracting parties alleged to have been in breach. [100] So too here, where the Plaintiff's case is that the 3rd Defendant is the controlling mind of the 1st Defendant. I cannot agree more with Mr Conrad that this plea is simply unsustainable in law, for like was said in Said's case (supra) if one were to accept the Plaintiff's case in this regard, then in every case of a breach of contract by a company the alleged defaulting company's directors, shareholders, parent/holding company and subsidiaries will all automatically be liable and be enjoined as parties, and that simply cannot be, and is not the law!”

Thus, applying the cases of Chen Khai Voon (supra) and Q2 Engineering Sdn Bhd (supra), it is the judgment of this Court that it is not demonstrated that there is any overt act at all on the part of Yang and CYL acting in their personal capacity otherwise as the directors of SWH and SWSB to support a claim for conspiracy. The aforesaid is quite apart from the fact that the particulars of conspiracy to injure were also not sufficiently pleaded [See: Renault SA v Inokom Corp Sdn Bhd & Anors [2010] 5 MLJ 394]. No particulars were pleaded on the factual elements of when, where and how the agreement to injure took place. Neither were there any reference to the distinct overt act of a common intent to injure.

In fact, Mantab Marine had no contractual relationship with SWH, Yang and CYL at all. There is absolutely no evidence to show the existence of any collateral contract with them. Indeed, no evidence was led to even attempt to establish the existence of the same. As alluded to above, the actions by Yang and CYL were conducted in their capacity as directors of SWH and SWSB and not in their personal capacity at all.

In any case, the illegal means conspiracy is based on the alleged Fraudulent Representations which this Court has found to be without any merits. This means that the cause of action for conspiracy to injure, if at all, is by lawful means which requires the existence of a dominant intent to injure. This has also not been demonstrated at all.

For the reasons above, Mantab Marine’s claims against SWH, SWSB, Yang and CYL have not been established on the balance of probabilities and for the reasons above, the claims are dismissed with costs.

As regards the claims based on contract by Dato’ Tan against SWSB, it was contended that under the New Contract, all that SWSB was required to do was to extract and excavate marine sand without the need to meet the specifications stated in the Main Contract with MES.

With respect, this is an disingenuous contention. It is neither Dato’ Tan nor Datuk Wira Tom’s testimonies that under the terms of the New Contract, there was no need for SWSB to meet the marine sand specifications under the Main Contract. In fact, the Recital 1(c) of the New Contract expressly referred to ‘… the extraction and or excavation and or dredging of marine sand from the Concession Site and transporting the extracted marine sand to the designated ship-to-ship (STS) points and loading the marine sand onto the chartered mother vessel …”.

Quite clearly, the marine sand to be extracted, excavated and dredged was to meet Mantab Marine’s obligations to its purchaser and the type of marine sand that SWSB was engaged to extract, excavate and dredge was to meet the specifications stated in the Main Contract as reproduced below:

Accordingly, the claims by Dato’ Tan based on contract are also unsustainable and are dismissed with costs as well.

SWSB has counterclaimed against Dato’ Tan for the following: a) the sum of RM 517,333.2 being the sum for the Works rendered for 8 days from 28.10.2021 to 4.11.2021

SWH, Yang and CYL have also counterclaimed against Mantab Marine and Dato’ Tan for malicious prosecution and for abuse of process in pursuing their present claims against them.

In respect of SWSB’s Counterclaim, the evidence disclosed during trial shows that: a) Dato’ Tan had agreed to assume the obligation to pay for the 1st Monthly Fee, albeit discounted, that MES had failed to pay under its Sub-Contract with SWH; b) on 14.10.2021, Dato’ Tan and SWSB had entered into the New Contract where for the period between 28.10.2021 and 27.11.2021, in the event SWSB had rendered the Works for more than 15 days, namely, up to 12.11.2021 or beyond, Dato’ Tan shall make a payment of RM 1,940,000.00 to SWSB and in the event the Works are being rendered and completed on or by 11.11.2021, the amount payable by Dato’ Tan to SWSB shall be paid on daily basis subject to the total number of days when the Works were rendered by SWSB; c) SWSB had performed the Works for 8 days from 28.10.2021 where the Vessels were commissioned from 28.11.2021 to 4.11.2021 in accordance with the directives received under the New Contract and on instructions from Datuk Wira Tom as the representative of Mantab Marine by way of the WhatsApp conversation between Datuk Wira Tom and Yang; d) Notwithstanding the Works rendered, no payment was made by Dato’ Tan which prompted SWSB to issue a letter on 2.11.2021 demanding for the sum of RM 387,999.96 being the Works rendered from 28.10.2021 to 2.11.2021. The figure claimed of RM 517,333.20 is for Works rendered until 4.11.2021; e) 0n 5.11.2021, the Vessels departed from Rompin following the failure by Dato’ Tan to make any payment as agreed.

The sum of RM 517,333.28 represents the sum for the Works rendered for 8 days from 28.10.2021 to 4.11.2021. The fact that SWSB had deployed their Vessels to perform the Works under the New Contract was not disputed. Whilst it is true that no marine sand was extracted and dredged, the aforesaid was not due to any fault and or neglect on the part of SWSB at all. It was never SWSB’s responsibility to guarantee the existence of suitable marine sand at the Concession Area.

Accordingly, the Counterclaim in respect of the sum of RM517,333.28 for the Works rendered under Clause 3(b) (ii) is also allowed.

As regards the claim for RM 500,000.00 being the mobilization fee for the five (5) vessels pursuant to clause 3(b)(iii) of the New Contract, it was contended that: a) Clause 3(b)(ii) of the New Contract expressly provided that Dato’ Tan is obliged to pay SWSB the sum of RM 500,000.00 upon the commencement of the monsoon period; b) the determination of the start of the monsoon season is governed by official declarations issued by the Jabatan Laut Malaysia. In this regard, the Jabatan Laut Malaysia had by a media announcement made on 1.11.2021 that the monsoon would start on 3.11.2021 until March 2022. c) Although it was suggested during cross-examination that Mantab Marine had submitted a request to Jabatan Laut Malaysia to continue operations beyond the start of the monsoon period specifically, up to 31.10.2021 and that an approval was issued on 2.11.2021 allowing operations to continue from 2.11.2021 to 16.11.2021, it is undisputed that (i) this approval letter was never communicated to SWSB at any material time (ii) SWSB was not copied in correspondence between Mantab Marine and Jabatan Laut Malaysia at all and (iii) SWSB had no knowledge of this extension at the time services were rendered.

Therefore, based on the clear terms of the New Contract, the reliance on the monsoon announcement from Jabatan Laut Malaysia and the fact that SWSB was never informed of any extension by Jabatan Laut Malaysia, Dato’ Tan’s obligation to pay the mobilisation fees remained unsatisfied and by reasons thereof, SWSB contended that the claims for mobilisation fee ought to be allowed.

The Mobilisation Fee is provided under Clause 3(b)(iii) of the New Contract. It stipulates that a sum of RM 100,000.00 per vessel (up to a maximum of 5 vessels) shall be made payable by Mantab Marine as mobilisation fee for the vessels during the commencement of the monsoon period as the vessels would have to be moved to a different location to be arranged by

Quite clearly in the present case, there was no moving of the Vessels from the Concession Area at all notwithstanding the media announcement made on 1.11.2021 by the Jabatan Laut Malaysia that the monsoon would start on 3.11.2021 until March 2022.

In fact, when the Vessels left the Concession Area on 5.11.2021, it was because of the non-payment by Mantab Marine of the 1st Monthly Fee and not because of any mobilisation caused by the monsoon. Hence, for these reasons, the claims for Mobilisation Fee have not been made out and are therefore rejected.

However, as regards the Counterclaim for malicious prosecution and abuse of process, these claims have not been established at all and are therefore dismissed. More specifically, it has not been shown that when the claims were made, Mantab Marine had no honest belief, based on reasonable grounds that the proceedings were justified. There is also no evidence to demonstrate that the actions were taken with improper motive and or with malice. It has also not been shown that the court process was used for any improper or collateral purpose at all.

I shall now turn to the parties’ respective claims in Suit 2.

At the outset it must be said that at the Meeting dated 7.10.2021, MES had in fact agreed that the main reason why SWH had not performed the Works under the Sub-Contract was due to its failure to meet MES’ own payment obligations as stipulated in the Sub-Contract. It was because of MES’s financial inability to pay that had prompted Mantab Marine to step in to offer pay SWH on MES’s behalf and when subsequently MES did not accept the offer, the New Contract was entered into between Dato’ Tan and SWSB.

It is the judgment of this Court that with the New Contract, the respective future obligations of MES and SWH under the Sub-Contract would have been discharged. The parties may however claim for any antecedent accrued breaches prior to the Sub-Contract being discharged. Indeed, learned counsel for MES conceded that with the New Contract, MES had ‘walked away’ from the Sub-Contract until SWH took the step to make demand for payment of the 1st Monthly Fee, notwithstanding that SWH had already forfeited the Deposit prior to the New Contract.

It was in response to the said demand by SWH that MES raised the claims that SWH had breached the terms of the Sub-Contract which entitled MES to terminate the same and to claim for its losses including the refund of the Deposit forfeited.

MES claimed that SWH was wrong to demand payment of the 1st Monthly Fee because it had failed to perform the Works under the Sub-Contract. However, this contention is inconsistent with the clear contractual provisions stipulating that MES was obliged to pay SWH upon 7 working days from the Vessels arriving at the designated place at the Concession Area. The payment of the 1st Monthly Fee was not subject to the performance of the entire Sub-Contract at all. In this regard, the Vessels had arrived at the Concession Area by 20.9.2021.

MES also claimed that SWH had not obtained the requisite licenses. This is again without any merits. On 27.9.2021, SWH had provided MES with the necessary certificates and licenses for the Vessels. Jo Khalid himself conceded that he did not raise issues at all with the certificates that were forwarded to him.

Under Clauses 12 and 13 of the Sub-Contract, SWH was only obliged to procure the Domestic Shipping Licence (“DSL”) and not the Port State Control as asserted by MES. In any case, at the initial stage of the Sub-Contract which was confined to sampling tests, the PSC approval was required only for 2 vessels which was a matter that the parties had agreed upon. The Marine Risk Assessment (“MRA”) approval for the dredging operation was only granted to Datuk Wira Tom on 26.10.2021. This means that actual dredging activities could only commenced from 26.10.2021 whereupon PSC for the other vessels would be needed.

Accordingly, quite clearly the issue of PSC approval was not a hindrance at all to the performance of the sampling tests at the material times. This is the reason why the failure to procure the PSC approvals for the remaining vessels was never raised by MES in its solicitors’ reply to SWH’s letter of demand dated 11.10.2021.

As regards the claim that the Vessels had not proceeded to the correct coordinates at the Concession Area, this is clearly an afterthought. At the trial, Jo Khalid admitted that he had never raised the issue that the Vessels were at the wrong coordinates with SWH. On the contrary, Jo Khalid had in fact inspected the Vessels at their coordinates upon arrival at the Concession Area and he did not raise the coordinates of the Vessels as an issue.

Finally, on the issue of the work permits and insurances for the crew members, there is simply no documentary evidence to support MES’s contention that the crew members had no valid work permits at all. In any case, the process of arranging work permits for SWSB’s crew members was complicated by the Covid-19 pandemic due to the stringent immigration restrictions imposed by the Malaysian government at the time. This was the reason why the Schedule to the Sub-Contract had provided for the following: “13. Malaysia MCO Issue The Malaysian Immigration department does not allow workers to enter Malaysia within the MCO period. The Provided is not responsible for delayed operations caused by lack of workers due to the company delay of workers entering

Jo Khalid had acknowledged that the purpose of the aforesaid Schedule was to alleviate SWH’s concern on procuring work permits during the Covid-19 period and that SWH would not be responsible due to any delay in procuring the same. In truth, SWH had raised the issue of shortage of foreign crews due to the restrictions imposed pursuant to the MCO even prior to the execution of the Sub-Contract. To address this, Jo Khalid had represented that MES would be able to assist SWH to resolve such issues.

In any case, it is the judgment of this Court that there was no breach or failure by SWH in procuring the work permit and insurances as the work permits for the 21 crew members were issued during the period from 6.9.2021 to 30.12.2021 and the Vessels were duly mobilised and arrived at the Concession Area on 20.9.2021.

In the premises, the is simply no merits in the claims by MES that SWH had breached the terms of the Sub-Contract as alleged and by reason of the same, MES’s claim is dismissed with costs.

As regards the claims for the refund of the Deposit that was forfeited, MES’s contention was that SWH had failed to give a 30-days’ notice period to terminate the Sub-Contract under Clause 20.1 therein.

During oral submission, learned counsel for MES conceded that clause 20.1 in fact had no application at all. However, he relied on para 11 of the First Schedule to the Sub-Contract instead which is reproduced below: Manner of Payment The First (1st) Monthly Sum shall be paid by the Company to the Provider upon seven (7) working days from the Vessel arriving at the designated place (the Concession Site). The next Monthly Sum shall be paid in advance thirty (30) working days from the date of the First (1st) Monthly Sum payment and thereafter subsequent Monthly Sum shall be made on such date as the earlier Monthly Sum payment failing which interest at the rate of then per cent (10%) per annum shall be chargeable on such unpaid sum. The Provider have to stop the operation of the Vessel and recall the Vessel immediately without reference to the Company if the Monthly Sum not paid within twenty (20) days from the due date, and the Deposit is to be forfeited.

Based on the aforesaid para 11, it was contended that SWH was only entitled to forfeit the Deposit after the expiry of 20 days from the date the 1st Monthly Fee becomes payable which in this case was 7 working days from 20.9.2021, namely, 27.9.2021. in other words, SWH could only forfeit the Deposit at the earliest on 17.10.2021. Instead, the Deposit was forfeited sometime on 14.10.2021.

However, MES’s pleaded case for the refund of the Deposit is premised upon its purported termination of the Sub-Contract for alleged repudiatory breaches by SWH. It was never its pleaded case that the Deposit was to be refunded because it was forfeited prematurely at all. In fact, there is no evidence that MES had ever disputed SWH’s right to forfeit the Deposit. As I have alluded to above, MES was quite contended to just walk away from the Sub-Contract after Mantab Marine had entered into the New Contract with SWSB.

It is trite that a party is bound by his pleadings and his case is confined to the issues raised on the pleadings unless and until they are amended [See: Narayanan v Kannamah [1993] 3 MLJ 730; Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428].

In this case, since it was never MES’s pleaded case that the Deposit is to be refunded because it was prematurely forfeited, it would not be right for this Court to entertain this contention which is raised only at the oral submissions stage after trial and without any application to amend the pleadings. This is because SWH had been deprived of the opportunity to establish its case that it was entitled to forfeit the Deposit notwithstanding the fact that the 20-day period in para 11 of the First Schedule had not expired. Evidence could have been adduced to show that MES could never had satisfied the payment of the 1st Monthly Fee in any event and or that MES had in fact waived the strict time period stipulated. The aforesaid are not entirely purely speculative given that as stated, MES had already walked away from the Sub-Contract after the New Contract was entered into.

Accordingly, for the reasons above, the claim for the refund of the Deposit is also dismissed. Fraud and Conspiracy to injure

MES also made a claim for fraudulent representations against SWH, Yang, CYL, LCY and Jinfu. Sumilarly, this cause of action simply has not been made out at all. The same is also true for the claim premised on conspiracy to injure.

Jo Khalid himself admitted during cross examination that none of the documents or correspondences exchanged between the parties contains any representations that can be considered as false. Indeed, the issue of misrepresentation was never raised in any of the correspondence between MES and SWH.

In fact, if it is MES’s claim that the Sub-Contract was induced by fraudulent representation, the same can be set aside. A contract entered into based on fraudulent representation is voidable and is valid unless set aside. In this case, MES did not rescind the Sub-Contract but instead chose to affirm the same when MES claimed that SWH had breached the same.

Notwithstanding aforesaid, MES has totally failed to show any evidence of a common intention between SWH, Yang, CYL, LCY and Jinfu to injure it. Further, the principles in the cases of Chen Khai Voon (supra) and Q2 Engineering Sdn Bhd (supra) also apply and it is the judgment of this Court that it is not demonstrated that there is any overt act at all on the part of Yang, CYL, LCY and Jinfu acting in their capacity otherwise as the directors and or officers of SWH to support a claim for conspiracy.

Accordingly, MES’s claims based on fraudulent misrepresentations and conspiracy to injure are also dismissed with costs.

SWH is seeking the sum of RM 1,940,000.00 being the 1st Monthly Fee and RM 500,000.00 being the Mobilisation Fee for the monsoon period as provided for under the terms of the Sub-Contract.

However, the obligation to pay the 1st Monthly Fee have been assumed by Mantab Marine and Dato’ Tan under the New Contract. To my mind, by entering into the New Contract, SWH had effectively discharged MES from its obligations to make this payment. In fact, SWSB had already received the sum of RM 1,164,000.00 from Dato’ Tan as the agreed discounted 1st Monthly Fee due under the Sub-Contract.

As regards the Mobilisation Fee for the monsoon period, this has not merit at all. Quite apart from the fact that the parties’ respective obligations under the Sub-Contract had been discharged with the New Contract entered into between SWSB and Dato’ Tan, I have also determined that there was no actual mobilisation for the monsoon in Suit 3 above.

As regards the claims for abuse of process and or malicious prosecution, it has not been demonstrated to this Court that MES had no honest belief, based on reasonable grounds that the proceedings were justified. There is also no evidence to demonstrate that the actions were taken with improper motive and or with malice. It has also not been shown that the court process was used for any improper or collateral purpose at all. It is simply not enough to just submit that the claims against LCY and Jinfu have no merits because there was no evidence to show their involvement and or knowledge at all of the subject matter of the disputes.

Just because a claim is hopeless or weak and is bound to fail is not by itself enough to prove malicious prosecution or abuse of process. Whilst hopelessness can be evidence of absence of reasonable and probable cause, it is still necessary to show evidence of malice for malicious prosecution or collateral purpose for abuse of process. None was shown in this case.

In the premises, it is the judgment of this Court that in respect of Suit 3, Mantab Marine and Dato’ Tan’s claims against SWH, SWSB, Yang and CYL are dismissed and SWSB’s Counterclaim against Dato’ Tan for the sum of RM517,333.28 under the New Contract is allowed. Interest at the rate of 5% per annum of the said sum of RM517,333.28 is to be paid from the date of this Judgment until full realisation. Both Mantab Marine and Dato’ Tan are to pay costs fixed at RM 120,000.00 subject to allocator.

In respect of Suit 2, both the claims and the Counterclaims are dismissed with each party bearing their own costs. Dated the 12th day of August 2025 ONG CHEE KWAN JUDGE OF THE HIGH COURT HIGH COURT (COMMERCIAL DIVISION NCC2 & ADMIRALTY) HIGH COURT OF KUALA LUMPUR Counsel for Plaintiffs: Mr. Mohd Saiful Hadi bin Dowlad Rahuman together with Ms. Azreen binti Abdul Latif and Ms. Faradilla Jehan Kadar (Messrs. Ainul Azam & Co) (In suit WA-27NCC-2-01/2022) Mr. New Sin Yew together with Ms. Nur Izni Syazwani binti Ahmad (Messrs. Amerbon) (In suit WA-27NCC-3-01/2022) Counsel for Defendants: Mr. Wong Fook Meng together with Mr. Aniz Ahmad Amirudin, Ms. Tee Vun Xin, Ms. Lee Sin Yee, Ms. Nur Syahmina binti Zainal Abiddin, Ms. Nur Fathin Farrisya binti Md. Noor, Ms. Lee Xiang Yen and Mr. Rakesh Sharma (PDK) (Messrs. Chee Siah Le Kee & Partners)

ALW Car Workshop Sdn Bhd v. AXA Affin General Insurance Bhd [2019] 4 MLJ 561 2. Yeohata Machineries Sdn Bhd & Anor v. Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810 3. Chen Khai Voon v. Lim Beng Guan & Ors [2020] MLRHU 2099 4. Q2 Engineering Sdn Bhd v. PJI-LFGC (Vietnam) Ltd & Ors (No. 2) [2013] MLRHU 388 5. Renault SA v Inokom Corp Sdn Bhd & Anors [2010] 5 MLJ 394 6. Narayanan v Kannamah [1993] 3 MLJ 730 7. Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428