Mra International Sdn Bhd v Spc Diatech, LLC (WA-23CY-11-03/2017)

This case involves a wide spectrum of issues in view of the combination of causes of action where the Plaintiff’s pleaded claim against the Defendant is premised on defamation, tort of inducement of breach of contract, tort of unlawful interference of business and tort of intentional interference with prospective economic advantage whilst 2 the Defendant has counterclaimed against the Plaintiff for breach of contract, copyright infringement and breach of confidential information.

A glimpse of the dispute between the parties can be seen in the judgment of the High Court in MRA International Sdn Bhd v SPC Diatech, LLC at [2018] MLJU 107 and [2018] 1 LNS 136 in respect of the Plaintiff’s application for an interlocutory injunction and the Defendant’s application to set aside the Ex Parte Interim Injunction Order granted by the Court on 17.3.2017.

This Grounds of Judgment sets out the full reasons for the decision of the Court which was pronounced on 14.8.2020 after careful consideration of the pleadings, witnesses’ evidence, documentary evidence and the comprehensive and extensive written submissions diligently prepared by the team of solicitors who represented the parties led by Ms. Manjit Kaur for the Plaintiff and Ms. Cindy Goh for the Defendant. 3 BACKGROUND FACTS - The Defendant

The Defendant is a company established under the laws of the Russian Federation in October 1997. It is also known as “Limited Liability Company Scientific Production Company Diagnostic Technology for Technosphere”. The Defendant has been a member of the Russian Academy of Natural Sciences since 2001. It is also officially certified and recognised by the international organisation, Russian Maritime Register of Shipping.

The main area of the Defendant’s business is technical diagnostics in the oil, gas, chemical, energy and other industries using innovative technologies and equipment. The technosphere objects which have been inspected or tested by the Defendant for clients such as Repsol (Spain), Sinopec (China), Petrobras (Brazil) and Petronas (Malaysia) include pipelines, tanks, pressure vessels, bridges, furnaces, boilers and oil tunnels. 4

In addition, the Defendant is professionally engaged in research and development of diagnostic technologies and their practical implementation. It has developed a technology involving Phonon Emissive Diagnostic or popularly known as Phonon Diagnostic Technology (‘PDT’) and holds the “Patent of Invention” for “The Method of Phonon Emissive Diagnostic” registered on 5.2.2016 for a term until 29.1.2034 and “Utility Model Patent” for “The System of Phonon Emissive Diagnostic” registered on 9.12.2014 for a term until 29.1.2024. The “Certificate of trademark (service mark)” for “Phonon” was registered on 19.6.2017 for a term until 4.8.2026. Meanwhile, the Defendant’s application for registration of the “Phonon” trademark under the Trade Marks Act 1976 [Act 175] (‘TMA 1976’) (Repealed by the Trademarks Act 2019 [Act 815]) was accepted and advertised under Class 42 on 15.12.2016 vide Federal Gazette dated 7.6.2018.

PDT is a diagnostic method which involves applying energy onto a technical object and causes phonon emissions. These emissions are used to determine the technical conditions, the presence of leaks and defects and the residual life estimation of technical objects within a 5 facility. PDT allows the identification, in real-time, of the quantity, location, size, type and level of defects. As compared to the conventional acoustic method, PDT can be conducted without shutting down or interfering with the production process. Based on the results obtained from PDT, the Defendant will recommend any repair works that is necessary to prevent accidents, technical disasters and environmental damage. - The Plaintiff

Based on the Corporate Information from the SSM Search as at 17.4.2017, the Plaintiff was incorporated on 18.2.2013 and its nature of business is stated as providing diagnostic systems and tools to support oil and gas industry and its related services. The types of diagnostic and inspection services rendered by the Plaintiff include the Hybrid Acoustic Technology System (‘HATs’) allegedly invented by its Managing Director and developed in 2014, visual inspection, ultrasonic 6 thickness test, thermal diagnostic and acoustic and correlation leak study. More will be said about HATs later.

Similar to the Defendant, the Plaintiff boasted its own list of customers namely, Petronas and all of its subsidiary and associate companies such as Petronas Gas Berhad (‘PGB’) and Petronas Carigali Sdn Bhd (‘PCSB’), Vanguard Systems & Services International LLC (‘Vanguard’), Occidental of Oman Inc. (‘Occidental’), Brunei Shell Petroleum Co Sdn Bhd (‘Brunei Shell’), Repsol Oil & Gas Malaysia Limited [‘Repsol’, formely known as Talisman Malaysia Limited (‘Talisman’)], Velosi (M) Sdn Bhd (‘Velosi’), Bisco Integrated Services Corporation, Saudi Arabia (‘Bisco’) and Asean Bintulu Fertilizer Sdn Bhd (‘ABF’).

The Plaintiff has received accreditation under MS ISO 9001:2008 (Quality Management System), OHSAS 18001:2007 (Occupational Health & Safety Management System) and MS ISO 14001:2004 (Environmental Management System). It also obtained the status of Multimedia Super Corridor Malaysia in 2014. 7 - The relationship between the parties

In order to fully understand the history of the relationship between the Plaintiff and the Defendant, it is necessary to go back to the period when PDT was first introduced in Malaysia. In the Plaintiff’s submission, it has divided the timeline of events into three phases, namely Pre-Phase 1 (2009 – 2012), Phase 1 (February 2013 – March 2014) with the then Defendant’s Vice President, Professor Vladimir Shukhostanov (‘Prof. Vladimir’) and Phase 2 (June 2014 – end 2014) with the Defendant’s President, Zelim Khan Dzhaliev (‘Zelim’). It must be made clear at the outset that the Defendant disputes the Plaintiff’s categorisation of these three phases.

During the pre-Phase 1 period, the Plaintiff contended that Skypearl Khosim Bin Othman (‘Khosim’) who later became one of the Plaintiff’s Directors, had promoted PDT in Malaysia. On 25.7.2012, Prof. Vladimir signed the “Exclusive Appointment Letter” to the attention of Khosim, the then President of Calidad Technology (M) Sdn Bhd (‘Calidad’), 8 another company which was set up by Khosim. By virtue of that letter, the Defendant confirmed that Calidad has been appointed as the exclusive agent in the oil and gas market in the territory of Malaysia for the Defendant’s products/ services which include the PDT for a period of 3 years.

Subsequently, Khosim, Datuk Fariz Nazrul Bin Che Noh (‘Datuk Fariz’), the Plaintiff’s Business Development Director and Mohd Hazim Bin Hassan (‘Hazim’), the Plaintiff’s Managing Director, became acquainted and Khosim brought about investment opportunities to Datuk Fariz and Hazim since Skypearl and Calidad were said to be unable to bear the expenses of the business.

This led to discussions with Prof. Vladimir who informed Datuk Fariz and Hazim that he was the proprietor and inventor of the PDT and owner of the Defendant. The Plaintiff was then incorporated on 18.2.2013 to market the Defendant’s services in Malaysia and the following documents were thereafter executed: 9

“Exclusive Agent Appointment Letter” for a period of 5 years from 1.3.2013 was signed by Prof. Vladimir for the Defendant to the attention of Khosim as Technical Director of the Plaintiff;

“MRA International Sdn Bhd Agency Agreement For Malaysia Sector” for a period of 5 years from the date of the Agency Agreement i.e. 31.3.2013 was signed by Prof. Vladimir for the Defendant as the “Principal” and witnessed by Alexander Tsybenov (‘Alex’), and by Khosim for the Plaintiff as the “Agent” and witnessed by Datuk Fariz. Although the contents of the Agency Agreement, especially on page 1, do not expressly state that the Plaintiff was appointed by the Defendant as the exclusive agent to promote and sell the Defendant’s PDT services in Malaysia, this fact is not disputed by the parties. This will be further elaborated in the later part of this judgment;

“Memorandum Of Understanding For Expansion Of Phonon Business Programme In Malaysia” (‘MoU’) signed by the Plaintiff and Prof. Vladimir in his individual capacity on 15.4.2013. 10 According to the MoU, the Plaintiff shall (i) be responsible in securing the phonon energy diagnostic technology for the oil and gas industry in Malaysia, providing sufficient funds for Prof. Vladimir to develop the Phonon Centre Setup within a period of 3 years and arranging a Malaysian Second Home programme for Prof. Vladimir and transport and personal assistance for his family including to facilitate admission to an international school for his child; (ii) transfer 20% shareholding of the Plaintiff to Prof. Vladimir; (iii) register a new intellectual property (‘IP’) company known as “VSK International Sdn Bhd” whereby Prof. Vladimir will have 80% stake of the shareholding and the Plaintiff, a 20% stake of the same. Prof. Vladimir agreed, among others, to grant exclusive right to the Plaintiff to sell PDT for the Malaysian market, to reside and pattern his IP in Malaysia with the establishment of the Phonon Centre and to transfer the skill to perform diagnostic technology under the Phonon Centre Setup. Based on the Plaintiff’s “Financial Statements 31 December 2013”, Prof. Vladimir was appointed as one of the Directors of the Plaintiff with effect from 18.6.2013 and as at 31.12.2013, held 11 80,000 shares in the Plaintiff company. Prof. Valdimir also had a residential address in Malaysia;

“Exclusive Agent Appointment Letter” for a period of 5 years from 2.1.2014 was signed by Prof. Vladimir for the Defendant to the attention of Khosim whereby the Plaintiff was appointed as the exclusive agent in the territory of Brunei, Indonesia and Thailand;

“Exclusive Agent Appointment Letter” for a period of 3 years from 17.6.2014 was signed by Zelim for the Defendant to the attention of Datuk Fariz whereby the Plaintiff was appointed as the exclusive agent in the territory of Turkmenistan;

“Exclusive Agent Appointment Letter” for a period of 3 years from 17.6.2014 was signed by Zelim for the Defendant to the attention of Datuk Fariz whereby the Plaintiff was appointed as the exclusive agent in the territory of the Sultanate of Oman; and 12

“Exclusive Agent Appointment Letter” for a period of 5 years from 17.6.2014 was signed by Zelim for the Defendant to the attention of Datuk Fariz whereby the Plaintiff was appointed as the exclusive agent in the territory of South East Asia. [15] In order to promote and effectively market PDT in Malaysia, Prof. Vladimir had travelled several times to Malaysia in 2013 to conduct presentations on PDT. [16] The Defendant’s alleged that during the validity of the Agency Agreement, apart from some free trials which the Defendant agreed to carry out for the Plaintiff, the Plaintiff had issued merely 7 Purchase Orders (‘PO’) for the period from 25.1.2014 to 13.9.2015 which was received and accepted by the Defendant. [17] The Defendant further claimed that sometime in January 2014, it found out that Alex, who had resigned from the Defendant so as to take up employment with Roscosmos State Corporation for Space Activities, was doing some work for the Plaintiff in Malaysia. Upon further 13 investigations, the Defendant was convinced that the Plaintiff had secretly employed the Defendant’s former employees namely, Alex and Eremina Marina (‘Marina’) to perform purported PDT services to the local oil and gas companies without the Defendant’s knowledge and consent. It is an agreed fact that PDT can only be performed using PDT equipment and PDT software owned and invented by the Defendant and by certified PDT specialist or engineers (‘CS/E’) trained on PDT by the Defendant. [18] The Defendant additionally alleged that the Plaintiff had fabricated references for the Defendant’s ex-employees and certificates for personnel who are strangers to the Defendant so that they may appear to be phonon engineers/ specialists qualified to perform PDT to unknowing customers. [19] On 24.2.2016, Zelim signed the 30 days’ notice to the Plaintiff pursuant to Clause 6.3 of the Agency Agreement dated 31.3.2013 that the said Agreement be terminated. The Defendant sought the Plaintiff’s cooperation to immediately cease from using or promoting PTD and 14 making any reference to PDT in the Plaintiff’s promotional, presentation and/ or marketing materials. The Defendant also asked the Plaintiff to return all property, items or technical literature belonging to the Defendant and/ or destroy all confidential information or trade secret pertaining to PDT. The Plaintiff was reminded that since it was no longer the exclusive agent of the Defendant, the Plaintiff is not authorised to continue to represent to Petronas or any other party in Malaysia that it is the Defendant’s agent. [20] The Plaintiff replied to the Defendant vide a letter dated 14.3.2016 marked “Under Protest” expressing its disappointment that despite its “remarkable performance”, the Agency Agreement has been prematurely terminated for no reason. The Plaintiff denied that it possessed any property, items or technical literature that are patented or proprietary in nature. Further, the Plaintiff stated that it will not utilise PTD and will continue to provide its other services to the existing clients. The Plaintiff warned the Defendant not to interfere in the Plaintiff’s business and to refrain from contacting any of the Plaintiff’s existing and/ or future clients. 15 [21] In an undated letter, the Defendant’s solicitors, Messrs. Adzly & Co. gave a similar 30 day notice to the Plaintiff to terminate the Exclusive Agent Appointment Letters in Oman, Turkmenistan, South East Asia and all other relevant countries/ territories in which the Plaintiff was appointed as agent. The Plaintiff’s current solicitors replied to the Defendant’s solicitors on 19.4.2016 in a tenor akin to the Plaintiff’s letter dated 14.3.2016. - Events post-termination of the Agency Agreement [22] According to the Defendant, sometime in October 2016, Zelim had made a presentation on PDT to Repsol. However, Repsol’s employees informed Zelim that Repsol had issued a Letter of Award (‘LoA’) to the Plaintiff on 22.4.2015 for the provision of PTD services. The Defendant had no knowledge about this agreement and thus embarked on a further investigation which finally revealed that the Plaintiff had entered into a – 16

“Phonon Diagnostic Technology Agency Agreement” dated 10.6.2015 with Bisco whereupon the Plaintiff appointed Bisco as a joint business partner to promote, market and solicit bids, orders or contracts from customers for the provision of phonon diagnostic services in Saudi Arabia;

similar agreement with Berk Hill E.S. (‘Berk Hill’) on 1.6.2015 whereby Berk Hill was appointed as an agent to promote PDT in

“Contract Agreement For Phonon Diagnostic Technology” dated 29.6.2016 with Vanguard; and

“Commercial Proposal – Provision For Reliability Study Utilizing Hybrid Acoustic Technology Services” between Occidental, Vanguard and the Plaintiff dated 22.2.2017 which involves Phonon Diagnostic Technique. 17 The Defendant claimed that it was kept in the dark about all the above mentioned agreements. [23] The Defendant further alleged that its enquiries uncovered that there were other LoA and contracts between the Plaintiff and customers such as PGB, PCSB and Talisman for the provision of PDT as well as power point presentations and reports prepared for various subsidiary companies of Petronas, ABF, Malaysia LNG Group of Companies, Brunei Shell and Sharq Eastern Petrochemical Company (‘Sharq’) purportedly for the provision of HATs but were essentially for PDT. - The Alleged Defamatory Electronic Mail and Letters [24] Consequent to the outcome of the investigations, the Defendant issued letters to Repsol on 15.12.2016 and Occidental on 27.12.2016 (‘said Letters’). The said Letters led to the filing of the instant suit on 9.3.2017 wherein it is the Plaintiff’s pleaded case [see para 23 of the Statement of Claim (‘SoC’)] that in their natural and ordinary meaning, the 18 statements in the said Letters and in the cover e-mail for the letter to Repsol (‘said e-mail’) meant, and were understood to mean, that the Plaintiff – “a) The Plaintiff is an entity which practices fraud and an entity which cheats; b) The management of the Plaintiff manages the entity in a criminal manner and also practices fraud and deceit against its customers; c) The Plaintiff is an entity which cheats and provides other services which disguises as PDS; d) The Plaintiff is an entity which is unethical, incompetent, dishonest and unprofessional and not fit to carry out business in this industry; e) The Plaintiff is an entity which do not possess experts in this industry and practices fraud against its customers; f) The Plaintiff is an entity which abuses its customers trust to further its own selfish interest; 19 g) The Plaintiff is an entity which does not practice safety measures expected by the industry and exposes its customers to serious dangers; h) The Plaintiff is an entity which neglects and does not protect its customers interest; i) The Plaintiff is an entity which seeks to make profit at the expenses of its customers; j) The Plaintiff is an entity which produces false and inaccurate reports; k) The Plaintiff and its management have committed theft and misappropriation of money i.e. a criminal act which is punishable under the Penal Code; l) The Plaintiff is an entity which has infringed the intellectual property rights of the Defendant. m) The Plaintiff’s management is a criminal and will be facing criminal proceedings.”. [25] The reliefs sought by the Plaintiff against the Defendant as set out in para 36 of the SoC are as follows: 20 “a) A declaration that the Defendant wrongfully defamed the Plaintiff; b) A declaration that the Defendant has committed the tort of inducement of breach of contract; c) A declaration that the Defendant has committed the tort of unlawful interference of business and tort of intentional interference of business and tort of intentional interference with prospective economic advantage; d) A permanent injunction prohibiting, preventing and/or restraining the Defendant whether by itself and/or through its directors and/or shareholders and/or management and/or employees and/or agents and/or directors, shareholders, employees, management of its agents and/or nominees and/or directors, shareholders, employees, management of its nominees and/or representatives and/or directors, shareholders, employees, management of its representatives and/or business partners and/or directors, shareholders, employees, management of its business partners whether jointly and/or severally from: 21 Plaintiff and/or the Plaintiffs technologies including and not limited to Hybrid Acoustic Technology (HATs) system and/or any other services provided by the Plaintiff, to the management and/or employees of the Plaintiffs customers as listed in Schedule 1 herein, through all modes of communication, including but not limited to phone calls, private meetings, delivery of messages through sms and/or whatsapp and/or any other kind of electronic communication, delivery of emails and/or delivery of letters by hand and/or post and/or fax and/or e-mail;

(ii) publishing defamatory allegations whether libelous and/or slander pertaining to and/or against the Plaintiffs management and/or directors and/or employees and/or shareholders to the management and/or employee of the Plaintiffs customers as listed in Schedule 1 herein, through all modes of communication, including but not limited to phone calls, private meetings, delivery of messages through sms and/or whatsapp and/or any kind of electronic 22 communication, delivery of e-mails and/or delivery of letters by hand and/or post and/or fax and/or e-mail;

(iii) inducing and/or encouraging breach and/or default and/or infringement and/or termination and/or freezing of agreement and/or contract between the Plaintiff and the Plaintiff customers as listed in Schedule 1 herein and the other customers of the Plaintiff;

(iv) contacting the directors and/or shareholders and/or management and/or agents and/or nominees and/or employees and/or contractors and/or representatives of the Plaintiff's customers as listed in Schedule 1 and other customers of the Plaintiff whether by itself and/or through its directors and/or shareholders and/or employees and/or agents and/or nominees and/or representatives through any mode of communication including phone calls. Private meetings, delivery of messages through sms and/or whatsapp and/or any kind of electronic communication, delivery of e-mails and/or delivery of letters by hand and/or post and/or fax and/or e-mail; 23 Plaintiffs business and/or transactions and/or services rendered by the Plaintiff to the Plaintiffs customers as listed in Schedule 1 and other customers of the Plaintiff;

(vi) contacting and/or finding and/or enticing and/or inducing the Plaintiffs employees to breach and/or terminate their employment with the Plaintiff; e) The Defendant is instructed to provide the Plaintiff all details and documentation including tender documentations, letters, emails, reports, contracts, release orders, purchase orders, work orders, invoices and receipts pertaining to PDT services in Malaysia, Brunei, Indonesia, Thailand, Turkmenistan dan Sultanate of Oman from 24.3.2016 to the date of conclusion of this action; f) General damages and/or exemplary damages and/or aggravated damages to be assessed before the Senior Assistant Registrar and to be paid by the Defendant to the Plaintiff; 24 g) Interest at the rate of 5% from the date of filing of the Writ of Summons until the date of full settlement; h) Costs on a solicitor - client basis to be borne by the Defendant and paid to the Plaintiff forthwith; and i) Any other or further reliefs deemed suitable and expedient by the Court.”. [26] The Defendant counterclaimed for the reliefs as set out below: “A) A declaration that the Plaintiff has breached the Agency Agreement between the Plaintiff and Defendant dated 31.3.2013 (‘Agency Agreement’); B) A declaration that the Plaintiff has committed copyright infringement of the Defendant’s various confidential information and documents pertaining to PDT (‘Information and Documents’); C) A declaration that the Plaintiff has breached the Defendant’s confidential information pertaining to the Information and Documents; 25 D) A perpetual injunction to restrain the Plaintiff whether acting by itself, its directors, officers, servant, representatives, shareholders, and/or agents and/or any of them howsoever from utilizing and/or disclosing and/or in any way dealing with the Information and Documents; E) An order that the Plaintiff, within seven (7) days from the date of this order, whether acting by itself, its directors, officers, servant, representative, shareholders and/or agents and/or any of them howsoever do forthwith deliver up upon oath and surrender to the Defendant or its solicitors, all Information and Documents or any other documents belonging to the Defendant that was copied, removed, extracted by and/or provided to the Plaintiff and all copies or extracts of or from such Information and Documents in its possession or under its control; F) An order that the Defendant be at liberty to use any affidavit, statutory declaration, information, articles, material and document obtained as a result of the order to be made herein for the protection or further protection of the Defendant’s rights or interests the subject of this action whether in Malaysia or elsewhere; 26 G) An inquiry as to damages suffered by the Defendant and/or alternatively, at the Defendant’s option an account of profits due from the Plaintiff’ act of utilizing and/ or disclosing and/ or in any way dealing with the Defendant’s Information and Documents and/ or Plaintiff’s acts of infringement of copyright and/or breach of confidential information; H) Statutory Damages pursuant to the Copyright Act 1987; I) Additional and/or exemplary and/or aggravated damages; J) Pre-judgment interest for such period and at such rate as the Court deems appropriate pursuant to the Civil Law Act 1956; K) Interest at the rate of 5% per annum on all damages and costs awarded by the Court from the date of award until the date of full settlement; L) Costs; and M) Such further or other relief or direction as this Honourable Court may deems fit.”. 27 THE TRIAL & ISSUES TO BE TRIED [27] The trial was conducted for 38 days beginning on 12.11.2018 and ending on 22.1.2020. They are altogether 89 bundles of documents, 256 exhibits and 17 documents marked for identification only. Six witnesses each testified for the Plaintiff and the Defendant and they are identified below: Witness Name Occupation PW1 Khairul Izhar Bin Osman Plaintiff’s Team Leader Inspection Engineer PW2 Muhammad Firdaus Bin Baharudin Plaintiff’s Team Leader Inspection Engineer PW3 Ruzlan Bin Hashim Head of Inspection & Assurance, Sarawak Gas, Petronas Carigali Sdn. Bhd. (‘PCSB’) and formely the Head of Inspection & Assurance, Sarawak Operations, PCSB PW4 Mohd Hazim Bin Hassan Plaintiff’s Managing Director (and shareholder based on the SSM Search as at 19.4.2017) 28 PW5 Datuk Fariz Nazrul Bin Che Noh Plaintiff’s Business Development Director (and shareholder based on the SSM Search as at 19.4.2017) PW6 Praba Karan a/l Karunakaran Freelance Consulting Engineer and formerly Repsol’s Subsea Team Lead for Asset Integrity Department DW1 Mohd Zulfaiz Bin Jasni Inspection Executive, PGB DW2 Ilia Khokhlov Defendant’s Engineer with specialisation in phonon diagnostic services DW3 Ms. Lidiia Nekrasova Defendant’s Director of Human Resource DW4 Muhammad Syafiq Bin Mohamad Khairi Freelance worker and Plaintiff’s former employee DW5 Ms. Sim Ling Fann Senior Integrity Engineer, Repsol DW6 Zelim Khan Dzhaliev [28] DW2, DW3 and DW6 are citizens of Russia and they gave evidence in the Russian language which was ably translated by the interpreter, Ms. Darya Kirienko. [29] The facts which were agreed by the parties during the pre-trial case management are re-produced below: “1. The Defendant is an entity incorporated in Russia and having address at 32 Bolshaya Gruzinskaya Street, Bl. 2, Moscow, 123056, Russia.

The Defendant is the author of the: a) Letter to REPSOL Oil & Gas Limited Malaysia (REPSOL) dated 15.12.2016; b) Letter to Occidental of Oman Inc. (Occidental) dated 27.12.2016; c) E-mail to REPSOL dated 15.12.2016; and d) E-mail to Occidental dated 27.12.2016.

Phonon Diagnostics Technology (PDT) can only be performed using PDT equipment and PDT software owned and invented by the Defendant and by certified 30 PDT specialist or engineers trained on PDT by the Defendant.

The Plaintiff was appointed as an exclusive agent for the Defendant in Malaysia vide appointment letter dated 01.03.2013 for a period of five years.

On 31.03.2013, the Plaintiff and the Defendant executed the Agency Agreement for the Malaysian territory.

The Plaintiff was also appointed as the exclusive agent for the Defendant for the territory of Brunei, Indonesia and Thailand on 02.01.2014 and for the territory of Turkmenistan, Sultanate of Oman and South East Asia on 17.06.2014.

The Defendant provides PDT services.

By way of letter dated 24.02.2016, the Plaintiff’s Exclusive Agency Agreement was terminated.

The Defendant sent the documents mentioned in paragraph 2 above to REPSOL and Occidental.”. 31 [30] At the end of the trial, the Court dismissed the Plaintiff’s claims and allowed the Defendant’s counterclaim. Specifically, the judgment reads as follows: “1. The Plaintiff’s claims are dismissed with costs;

A declaration that the Plaintiff has breached the Agency Agreement between the Plaintiff and Defendant dated 31.3.2013 (‘Agency Agreement’);

A declaration that the Plaintiff has committed copyright infringement against the Defendant in relation to the following:

Defendant’s webpage on Phonon Diagnostic

Defendant’s presentation on PDT; and

PDT technical information in the Presentation slides on PDT as set out in Exhibits P139 and P140; (collectively ‘the Copyrighted Works’); 32

A declaration that the Plaintiff has committed breach of the Defendant’s confidential information in relation to the following:-

The document that describes the PDT procedure entitled ‘Precise Procedure of Instrumental

The PDT mathematical formula; and

The Defendant’s PDT software; (collectively ‘the Confidential Information’); (the Copyrighted Works and the Confidential Information are collectively referred to as ‘the

A perpetual injunction to restrain the Plaintiff whether acting by itself, its directors, officers, servant, representatives, shareholders, and/or any of them howsoever from infringing the copyright of the

A perpetual injunction to restrain the Plaintiff whether acting itself, its directors, officers, servant, 33 representatives, shareholders, and/or agents and/or any of them howsoever from utilizing, disclosing, breaching, misusing and/or in any way dealing with the

An order that the Plaintiff, within twenty one (21) days from the date of this judgment, whether acting by itself, its directors, officers, servant, representative, shareholders and/or agents and/or any of them howsoever do forthwith deliver up upon oath and surrender to the Defendant or its solicitors, all Information and Documents or any other documents belonging to the Defendant that was copied, removed, extracted by and/or provided to the Plaintiff and all copies or extracts of or from such Information and Documents in its possession or under its control and to affirm and affidavit stating that the Plaintiff no longer has any possession or control of the Information and

An inquiry as to damages suffered by the Defendant and/or alternatively, at the Defendant’s option an account of profits due from the Plaintiff’ act of utilizing and/or disclosing and/or in any way dealing with the Defendant’s Information and Documents and/or the 34 Plaintiff’s acts of infringement of the Defendant’s copyright;

Statutory Damages pursuant to s. 37(1)(d) of the Copyright Act 1987 to be determined;

Exemplary and/or aggravated damages to be determined;

Pre-judgment interest and post-judgment interest at the rate of 5% per annum from the date of the filing of the Counterclaim on 2.5.2017 until the date of full settlement; and

Costs to be paid by the Plaintiff to the Defendant and the quantum to be determined at the assessment of damages stage.”. [31] The evaluation of the respective submissions of the parties and the evidence adduced at the trial leading to the findings of fact and law as aforesaid will be dealt with in the ensuing part of this judgment following the sequence of the Common Issues To Be Tried which is as follows: 35 “1. Whether the contents of the e-mail to REPSOL dated 15.12.2016, the letter to REPSOL dated 15.12.2016 and the letter to Occidental dated 27.12.2016 are defamatory of the Plaintiff?

If Question 1 is answered in the affirmative, whether the Defendant could rely on the defence of justification?

If Question 1 is answered in the affirmative, whether the Defendant could rely on the defence of fair comment?

Whether the Defendant has committed the tort of inducement for breach of existing contracts between the Plaintiff and REPSOL and Plaintiff and Occidental?

Whether the Defendant has committed the tort of unlawful interference of business and tort of intentional interference with prospective economic advantage?

Whether the Plaintiff is entitled to the reliefs sought?

Whether the Plaintiff had breached the Agency Agreement between the Plaintiff and the Defendant dated 31.3.2013 (‘Agency Agreement’)? 36

If Question 7 above is answered in the affirmative, whether the Defendant is estopped from alleging that the Agency Agreement was terminated due to breach of the Agency Agreement?

Whether the Plaintiff infringed the copyright of the Defendant? [32] There are three Plaintiff’s Additional Issues To Be Tried which the Defendant could not agree to because it took the position that the three issues had been dealt with under the Common Issues To Be Tried or were not pleaded by the Plaintiff. The additional issues are – “12. Whether the Defendant’s conduct of terminating the Plaintiff’s agency was pre-maturely without any sufficient cause or is wrongful and unlawful? 37 [33] I have considered the submissions by the learned counsels regarding Question 13 and I agree with the Plaintiff that a determination of Questions 8 and 13 involve distinct legal principles on waiver and estoppel. Nevertheless, for purposes of this judgment, both questions will be addressed within the same cluster of issues. [34] As for Question 14, there was no specific reply by the Plaintiff in its submissions. Question 14 is all-embracing and will be given due consideration in the course of dealing with the issues relating to the Counterclaim. 38 [35] With regards to Question 12, the Defendant contended that, as evident from para 36 of the SOC, the Plaintiff has never prayed for any reliefs for the cause of action of wrongful or unlawful termination of the Agency Agreement against the Defendant in the SoC. Relying on the authority of Pedley v Majlis Ugama Islam Pulau Pinang & Anor [1990] 2 MLJ 307, Ms. Cindy submitted that the Court should not be required to answer Question 12 since it is essentially an academic issue and the Plaintiff should not be allowed to suddenly raise this additional cause of action. [36] In rebuttal, the Plaintiff takes the position that the prayer for damages is pleaded in subpara 36(f) of the SoC and this suffices since damages are a consequence of the wrongful and unlawful termination of the Agency Agreement. Material facts giving rise to the cause of action are said to have been pleaded at paras 11 to 13 of the SoC. [37] The Court has scrutinised the pleadings filed by the Plaintiff in this suit and finds that, whilst the Plaintiff had prayed for general, 39 exemplary and/ or aggravated damages to be assessed before the Senior Assistant Registrar in subpara 36(f) of the SoC, however, the fact that the termination of the Agency Agreement is wrongful or unlawful was not pleaded at all by the Plaintiff. The paras highlighted by the Plaintiff, namely 11 to 13 of the SoC merely states that –

the Agency Agreement was terminated prematurely and abruptly;

as a result, it caused hardship, embarrassment and inconvenience to the Plaintiff and tarnished its image; and

the Plaintiff had replied to the Defendant’s notice of termination vide letter dated 24.2.2016 by way of a letter dated 14.3.2016, the contents of which were set out in subparas 13(a) to (f). [38] It is a cardinal rule in civil litigation that the parties must abide by their pleadings to enable the issues to be defined and to inform the parties in advance of the case they have to meet so that the necessary 40 preparations can be made to deal with it. It is not the duty of the Court to solve the parties’ dispute by allowing a cause of action which was not pleaded to be ventilated (see Menah Sulong v Lim Soo & Anor [1983] 1 CLJ 26; Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428; and Gerard Jude Timothy Pereira v Kasi a/l KL Palaniappan [2017] 6 MLJ 54). Nevertheless, for the purposes of this grounds of judgment, Question 12 is discussed in the ensuing part under Issue 12. ANALYSIS & FINDINGS Issue 1: Whether the contents of the e-mail to Repsol dated 15.12.2016, the letter to Repsol dated 15.12.2016 and the letter to Occidental dated 27.12.2016 are defamatory of the Plaintiff? [39] The e-mail dated 15.12.2016 was sent by the Defendant’s employee, Elkina Vera on behalf of Zelim to four Repsol’s employees including PW6 and DW5 (exhibit P104) and it reads: “Dear Sirs, 41 attached to this email DIATECH, LLC forwards an official letter to Repsol Oil & Gas Malaysia Limited to all concerned executives and employees. The letter concerns important information regarding industrial safety of facilities of Repsol Oil & Gas Malaysia Limited, below mentioned persons should be essentially informed: Mr. Praba Karunakaran - Subsea Team Lead, Mr. Hafis Harif - Structural Integrity Engineer, Mr. Shahril Adha Zamhury - Engineering and Inspection Manager, Ms. Sim Ling Fann - Topside Integrity Engineer. We highly appreciate our corporation with Repsol Company. DIATECH has successfully performed works utilizing Phonon Technology for Repsol in Spain. Please find attached reference letter on work made in 2004. We also have carried out the integrity study based on Phonon Diagnostic technology for pipeline in 2016. We have been committed to honesty and transparency in our dealings with Repsol, that’s why it’s very important for us to 42 warn your Company against possible fraudulent actions by the MRA. We sincerely hope that soon this problem will be solved favorably. We are always open to discussions and we are ready to answer all your questions. Any additional information regarding DIATECH and its rights to Phonon technology would be presented to you upon your first request. …”. [40] In para 17 of the SoC, the Plaintiff pleaded that there are 9 defamatory statements in the letter dated 15.12.2016 which was attached to the above e-mail. For present purposes, it would be beneficial for the contents of the whole letter which was signed by Zelim to be re-produced below (with my added emphasis and insertion to indicate each alleged defamatory statement), albeit it is quite lengthy, so as to have a better understanding of the context in which these 9 statements are made. The contents of the letter dated 27.12.2016 to Ms. Mary 43 Kenney of Occidental’s Legal Department are the same as the letter to Repsol and the latter reads as follows: “Dear Sirs, Since 1997, the scientific production company Diagnostic Technologies for Technosphere (SPC DIATECH LLC) has been performing Nondestructive Testing, inspection services and industrial safety expertise of multiple technical infrastructure facilities. Along with different traditional methods of nondestructive testing Diatech uses the unique and the most advanced patented invention and method of its own design – PHONON Diagnostics Technology. Our Clients worldwide include Gazprom, Rosneft, Russnaft, Total, BP, ENI, Repsol, CLH, SEPCA, Petrobras, Petronas, SINOPEC, Hyundal Oilbank, LG Chemical and many others. Unfortunately, a former agent of Diatech in Malaysia, MRA International Sdn Bhd, has recently fraudulently started to use our company’s name and the name of the PHONON method (invented, patented and exclusive to Diatech), misleading customers. [1st Statement] Further, MRA simulated inspections of infrastructure facilities by the PHONON method, although it does not possess the 44 relevant knowledge, necessary PHONON equipment or PHONON trained technical staff. [2nd Statement] Having learned about the illegal actions of our agents, we have terminated our Agency Agreement and closed all business with MRA. [3rd Statement] They no longer represent Diatech or the Phonon method in any way. In response, MRA simply changed the name of the diagnostics method (to “Hybrid Acoustic Technology”) and continued to violate the rights of Diatech as the patent holder and the principal, as well as the rights of its own oil and gas customers. [4th Statement] To date, MRA has signed a number of contracts for inspections of infrastructure purportedly by the PHONON method, during which they crudely simulated performing of diagnostics works by the PHONON method in the performance of their diagnostics works. However, in reality, the PHONON inspection is not made; instead several people employed by MRA in Russia simulate works while another part of the same team draws up reports on the inspection, obviously containing false information. [5th Statement] We know for a fact that MRA deceitfully claimed to their own clients (partners) a relation between HAT and the PHONON method of Diatech. [6th Statement] Moreover, 45 MRA deceives clients (partners) by falsely stating that HAT has equal technical capabilities to the PHONON method. [7th Statement] We believe that by the said actions MRA, and persons hired by them, may be endangering industrial and environmental safety, causing severe financial and reputational damage to customers, and in some cases, to the national security of a number of States. [8th Statement] We also believe that, in the implementation of the above activities, the perpetrators have committed a series of crimes, including forgery of Diatech documents and signature of the company CEO, theft and appropriation of money. With this in mind, we have prepared crime reports for the investigating authorities of several international jurisdictions. [9th Statement] We hope that in the near future the problem will be solved, and until then we ask you to bear in mind that Diatech has no connection to the activities of MRA, and that MRA has no connection to PHONON diagnostics nor to other Diatech technologies, all the rights to which belong solely to Diatech. Diatech is not responsible for any negative consequences of acts or omissions of MRA and / or its affiliates.”. 46 [41] The Plaintiff submitted that it has discharged the burden of proving the three elements of the tort of defamation as laid down in the case of Ayob Saud v. TS Sambanthamurthi [1989] 1 MLJ 315, which was cited with approval by the Federal Court in Raub Australian Gold Mining Sdn Bhd (in creditors’ voluntary liquidation) v Hue Shieh Lee [2019] 3 MLJ 720, namely that the words –

are defamatory;

refer to the Plaintiff; and

are published. [42] The fact that the Defendant is the author of the said Letters and said e-mail and had sent the same to Repsol and Occidental was agreed by the parties prior to the trial. Publication of the words is thus established. The fact that the impugned statements refer to the Plaintiff is crystal clear and incontrovertible. 47 [43] In answering the question as to whether the words in the said Letters and said e-mail are defamatory in nature, Ms. Manjit relied on the evidence given by PW3, PW4, PW6, DW1, DW5 and DW6 and the legal principles as explicated in Gatley on Libel and Slander, 6th (1967) and 11th (2008) editions, Sweet & Maxwell and the case authorities of Syed Husin Ali v Sharikat Penchetakan Utusan Melayu Berhad & Anor [1973] 2 MLJ 56; Chok Foo Choo @ Chok Kee Lian v The China Press Bhd [1999] 1 MLJ 371; Mak Khuin Weng v Melawangi Sdn Bhd [2016] 5 MLJ 314; and Lim Guan Eng & Anor v Ganesan a/l Narayanan [2017] MLJU 1898. [44] Apart from citing the same excerpt from Ayob Saud’s case (supra) and contending that PW3 and PW6’s testimony should not be given weight as their credibility is doubted, the Defendant did not seriously challenge that the three elements of the tort of defamation have not been proven in this case. Instead, emphasis was laid on the defences of justification and fair comment. 48 [45] The determination as to whether the words complained of are capable of bearing a defamatory meaning involves a question of law that turns upon the construction of the words published: per Gopal Sri Ram JCA in Chok Foo Choo (supra, at p 374). Applying the test in determining whether the 9 statements in the said Letters and the said e-mail are defamatory in nature, I find that the words published in their natural and ordinary meaning do impute dishonourable conduct or motives and a lack of integrity on the part of the Plaintiff. The words used would certainly tend to lower the Plaintiff in the estimation of right-thinking members of the society since they plainly attribute the Plaintiff with fraudulent conduct, deceit and cheating by, among others, changing the name of the diagnostic method from PDT to HATs and securing several contracts for the inspection of infrastructures by purportedly utilising the phonon method, which the Defendant is the patent holder, after the Agency Agreement had been terminated. A reasonable reader with ordinary intelligence and of general knowledge and experience would, in my view, be likely to understand the words to bear the meaning as detailed in para 24 above. 49 [46] Therefore, the Court holds that the Plaintiff has established the elements of the tort of defamation and the question posed in Issue 1 is answered in the affirmative. With this finding, the onus now shifts to the Defendant to prove its pleaded defence of justification and fair comment. Issue 2: If Question 1 is answered in the affirmative, whether the Defendant could rely on the defence of justification? - The Plaintiff’s objection to the Defendant’s pleadings [47] The Plaintiff contended that the Defendant’s defence of justification is fraught with ambiguity and lacks the particulars as required under O. 78, r. 3(2) of the Rules of Court 2012 (‘RoC 2012’). Relying on the case authority of DP Vijandran v Karpal Singh & Ors [2000] 3 MLJ 22, the Defendant is said to have failed to plead alternative imputations of the impugned statements that the Defendant intends to justify since the Defendant denied the imputations as pleaded by the Plaintiff. In these circumstances, the Plaintiff argued that the alternative meaning as 50 submitted by the Defendant in its Written Submission must be rejected on the ground that the fact was not pleaded. [48] Ms. Cindy refuted the Plaintiff’s contention by submitting that the Defendant had pleaded sufficient particulars in compliance with the RoC 2012. It was further submitted that even if the Court is minded to hold to the contrary, based on the decision in Chiew Foo Hua v The Publisher Miri Daily News & Anor [2000] MLJU 664, the Plaintiff’s failure to object during the trial amounts to a waiver and the Defendant is justified in relying on all the evidence referred to during the trial. [49] The Defendant asserted that there is no prejudice caused to the Plaintiff by the Defendant relying on the evidence as the Plaintiff was not taken by surprise in any way. According to the Defendant, the Plaintiff was aware and had full knowledge of the Defendant’s case since similar arguments on justification was ventilated during the hearing of the Plaintiff’s ex-parte and inter partes interlocutory injunction applications in 2017. In any event, the Defendant posited 51 that the Plaintiff’s objection can be cured under O. 1A and O. 2, r. RoC 2012. [50] On the point of the Plaintiff’s failure to object during the trial, Ms. Manjit referred to the Notes of Evidence (‘NoE’), Vol. 12 on 16.10.2019 at pp 52 and 57 to refute the Defendant’s submission. I have perused the NoE at pp 51, 52 and 57 and it shows that Ms. Manjit had raised an objection at the time when Ms. Cindy asked Zelim to explain, with regards to his answer to Question 31 in his Witness Statement (‘WS-DW6’), as to why the Defendant alleged that the Plaintiff had committed copyright infringement and breach of confidential information. Ms. Manjit requested that it be placed on record that the Plaintiff will be submitting that the documents and information have not been pleaded in the Statement of Defence and Counterclaim and that this objection on pleadings for confidential information also applies to the pleadings for copyright infringement. [51] Throughout the trial, the Plaintiff had consistently maintained the position that the Defendant has failed to plead the particulars of 52 information and documents as denoted by the words “Information and Documents” which first appear in para 15 in the Statement of Defence and Counterclaim as quoted below: “15. For purpose of enabling the Plaintiff to market the Defendant’s services effectively, the Defendant provided the Plaintiff with various confidential information and documents pertaining to PDT (‘the Information and Documents’) which are exclusive to the Defendant and are not found in public domain during the validity of the Agency Agreement. The Information and Documents are extremely valuable to the Defendant and any unauthorised use by third parties will cause severe consequences and damage to the Defendant.”. [52] O. 78, r. 3(2) in the RoC 2012 provides that: “Obligations to give particulars (O. 78, r. 3)

53 are fair comment on a matter of public interest, or pleads to the like effect, he must give particulars stating which of the words complained of he alleges are statements of fact and of the facts and matters he relies on in support of the allegation that the words are true.”. [53] In para 39 of the Statement of Defence and Counterclaim, the Defendant denied the allegations that it has published defamatory statements againt the Plaintiff by reason that the statements and/ or words in the said Letters and said e-mail are true, justified and/ or fair and were made honestly, without malice and on a matter of public interest. Para 39 begins with the words “By reason of the above”. This means that the Defendant is relying on the facts as pleaded in the paras appearing before para 39 in denying the allegations hurled against it as to the publication of defamatory statements. [54] The Defendant has additionally pleaded the particulars of the Plaintiff’s alleged breach of the Agency Agreement, misuse of confidential information and copyright infringement in its Counterclaim whilst in para 18 of the Reply To Defence To Counterclaim, the confidential information which the Plaintiff is said to have obtained from the 54 Defendant or its representatives include technical information on PDT and PDT’s equipment such as its explanation, diagrams, drawings, methodology and the like. [55] Read in its totality, the Defendant has basically pleaded that the said Letters and said e-mail contain statements of fact which are true and justified. This is to be distinguished with the factual matrix in the case of the third defendant in the DP Vijandran’s case (supra). There, the third defendant had pleaded justification of the defamatory imputation as pleaded by the plaintiff but in its submission, it argued that the impugned words have a different meaning. It is in this context that the learned High Court Judge held at p 50 that a defendant who pleads justification must show in his defence, either as a specific averment or in the particulars relied on, the meaning that he seeks to justify and that by departing radically from the pleaded defence, the plaintiff was taken by surprise. [56] Hence, it is my considered view that the Defendant has pleaded sufficient facts, matters and particulars upon which the defence of 55 justification was raised. Among the facts relied on is that the Defendant is the copyright owner of the “Information and Documents” and possesses confidential information pertaining to PDT. There is no breach of the obligation as set out under O. 78, r. 3(2) RoC 2012. [57] Even if I am wrong in coming to the aforesaid conclusion, I am persuaded by the Defendant’s submission on the case authority of Chiew Foo Hua (supra) wherein the decision of the Court of Appeal in Superintendent of Land and Survey (4th Div) v Hamit bin Matusin [1994] 3 MLJ 47 was referred to, that the fact that the Plaintiff chose to proceed with the trial without asking for further and better particulars showed that it was not in any way prejudiced with the absence of such particulars. As submitted by Ms. Cindy, the Plaintiff is well aware of the Defendant’s defence of justification from the hearing of the applications for an interlocutory injunction in 2017. [58] Moreover, the objection raised by Ms. Manjit during the trial was in respect of the lack of particulars as to the “Information and Documents” 56 rather than as to the meaning of the impugned words which the Defendant seeks to justify or what the facts alleged to be true imputes. - Defence of justification [59] At common law, the impugned statement must be shown to be substantially true in material particular. Section 8 of the Defamation Act 1957 [Act 286] provides that – “In an action for libel or slander in respect of words containing two or more distinct charges against the plaintiff, a defence of justification shall not fail by reason only that the truth of every charge is not proved if the words not proved to be true do not materially injure the plaintiff's reputation having regard to the truth of the remaining charges.”. [60] In interpreting the above quoted provision, a purposive approach is to be taken and it is not necessary to prove the truth of every word in the alleged defamatory statement. The burden of proof is on the Defendant to prove, on a balance of probabilities, that the impugned statement is 57 true or substantially true in material particular. Once the defence of justification is successfully established, it affords a complete defence against a defamation suit by a claimant. The Defendant need not show that there was public interest in the publication and that the Plaintiff had acted maliciously (see Chong Swee Huat & Anor v. Lim Shian Ghee t/a L & G Consultants & Education Services [2009] 3 MLJ 665; Dato Seri Mohammad Nizar bin Jamaluddin v Sistem Televisyen Malaysia Bhd & Anor [2014] 4 MLJ 242; and Dato' Sri Dr Mohamad Salleh Ismail & Anor v. Nurul Izzah Anwar & Anor [2018] 9 CLJ 285). [61] In addressing the issues related to this defence, the learned counsels representing the parties have adopted similar clustering of the 9 statements except for the grouping of Statements 1 to 5. The Defendant has placed Statements 1, 2, 3 and 5 in one group and Statement 4 on its own whilst the Plaintiff prefers to tackle Statements 1, 2, 4 and 5 under one category and has separated Statement 3. For the purposes of this judgment, I shall adopt the Defendant’s clustering of the 9 statements and its choice of headings for each cluster with the 58 exception that Statements 1, 2, 3, 4 and 5 will be addressed collectively. Statements 1, 2, 3 and 5: Using phonon’s name to mislead customers as to the inspections actually performed and simulated inspections by employing Russians Statement 4: Changed the diagnostic method to HATs and continue to violate the Defendant’s rights - The parties’ submissions [62] The Defendant’s counsel has neatly encapsulated the crux of the Defendant’s arguments in para 64 of the Written Submission which is re-produced in part below. It was contended that Statements 1, 2, 3 and 5 are justified because the Plaintiff have misled or given false impression to the customers by, inter alia, the following means: 59 FALSE IMPRESSION HOW THE PLAINTIFF MISLEAD Misrepresented that the inspection carried out is PDT inspection. In actual fact, the inspection carried out cannot qualify as PDT. The Plaintiff was systematically using the name/ term of PDT in their presentation slides, bidding documents, agreements, discussions etc. PDT was mentioned all over the agreements with Repsol/ Talisman, PGB and PCSB, etc. Misrepresented in some projects that the inspection was carried out by the Defendant (the only company in the world qualified to conduct PDT inspection). In actual fact, the inspection was carried out by the Plaintiff itself. The Plaintiff has been referring to the Defendant’s name in agreements as their principal, as well as providing customers with the guarantee letter from the Defendant. The Plaintiff even employed Russians for this purpose. Misrepresented that the Plaintiff has employees who are qualified to carry out PDT. In actual fact, The Plaintiff has referred to its employees as ‘Phonon Specialist’ or ‘Phonon Engineer’ 60 those employees either never received any training from the Defendant or have had their qualification revoked. and has forwarded CV designating its employees as such. Ex-employees of the Defendant were also employed for this purpose. [63] It was further submitted that the Plaintiff had calculated to deceive its customers by providing inspections that cannot qualify as the real PDT inspections as these were done independent of the Defendant and were not carried out by experts certified by the Defendant and nor by using the proper PDT equipment and in accordance with the proper procedures, formula and protocol devised by the Defendant. [64] With regards to Statement 4, the Defendant asserted that the evidence adduced at the trial supports a finding that Talisman wanted PDT to be performed and the technology that the Plaintiff represented to Talisman was PDT. However, the Plaintiff just changed the name of the diagnostic method and used the words “Acoustic” and “HATs” in the reports that it prepared for Talisman after Zelim had confronted 61 Hazim in May and October 2015 on the Plaintiff’s engagement of the Defendant’s ex-employees and the provision of purported PDT for PGB’s projects without the Defendant’s knowledge. [65] At the other end, the Plaintiff submitted that the impugned statements remain unjustified for the following reasons:

It is common practice in the oil and gas industry for blanket contracts to be given to contractors to render various services to customers for a fixed period of time within the scope of the contract. The Plaintiff’s appointment is by way of such blanket contract and the evidence led proves that the contracts produced during the trial are blanket contracts.

The Plaintiff was not privy to the internal management arrangements of the Defendant and merely complied with any request or requirement by Prof. Vladimir and Zelim under Phase 1 and Phase 2, respectively. Any PDT that was provided by the 62 Plaintiff as the Defendant’s agent was performed by teams assigned by Prof. Vladimir and Zelim.

The Plaintiff only provides HATs by utilising acoustic based equipment since it was not in possession of any PDT equipment. The Defendant’s allegation that the Plaintiff had used Alex and Marina to perform PDT contradicts the Defendant’s position that the Plaintiff does not possess PDT equipment and that PDT cannot be done without PDT equipment.

The Defendant failed to call Prof. Vladimir, the inventor of PDT, as a witness. In addition, no expert witness was called to explain what the PDT methodology is as compared to HATs to enable the Court to decide as to whether the Plaintiff had indeed crudely simulated performing diagnostic works by the Phonon method.

The word “phonon” is a generic word and the terms “Phonon Engineer” and “Phonon Specialist” as used in the documents before the Court is not the Defendant’s creation and does not 63 indicate that the particular person is providing PDT or employed by the Defendant.

The Plaintiff did not mislead or made any misrepresentation to its customers. The Plaintiff had created the PDT presentation slides on its own as the Defendant did not provide any information or documents and a comparison of the presentation slides for PDT and HATs show that there is a substantial difference between both. Presentations on PDT and HATs were made to technical people in the oil and gas industry who understood the distinction between phonon and acoustic based technologies. The Plaintiff does not want to be associated with PDT because HATs is a far superior technology compared to PDT and there were many complaints and restrictions on PDT.

The termination of the Agency Agreement was pursuant to Clause 6.3 rather than Clause 6.2 which is the specific provision for termination on the ground of breach of any obligation under the Agreement. Hence, the termination was not due to any 64 purported illegal conduct by the Plaintiff and/ or breach of the Agency Agreement but was motivated by the Defendant’s intention of replacing the Plaintiff with Gaztech as the new agent to promote and provide PDT. The Defendant is further estopped from relying on the grounds that it sought to justify the termination since it did not take any action against the Plaintiff until the filing of the instant suit by the Plaintiff. - The findings of the Court [66] The Court, having seen and heard the evidence given by 12 witnesses and upon careful scrutiny of the same together with the documentary evidence, pleadings and extensive submissions of the parties, had made the following findings in respect of the multifarious issues. 65 Contract with Repsol [67] Based on the testimony given by the witnesses, particularly Ms. Sim (DW5) and Zelim (DW6), and the contents of the following documents i.e. – • the Plaintiff’s Technical Bid Proposal for the “Provision For Phonon Diagnostic Technology Inspection Services Tender No. KB14-0136” for Talisman with the cover letter dated 29.12.2014 and acknowledged receipt by Talisman on 19.1.2015 (exhibit D246); • Technical Clarifications provided by the Plaintiff to Talisman in relation to the Technical Proposal (exhibit D247); • LoA for the “Provision For Phonon Diagnostic Technology Inspection Services” issued by Talisman to the Plaintiff dated 22.4.2015 (exhibit D186); 66 • Minutes of Meeting held at Talisman’s Meeting Room on 28.4.2015 taken by Hazim (exhibit D248); • Contract No. 150882 (Tender No. KB14-0136) between Talisman and the Plaintiff for “Provision For Phonon Diagnostic Technology Inspection Services” made on 15.7.2015 (exhibit P105) with an effective date of 22.4.2015 being a 3 year contract to perform Phonon Diagnostics on Talisman’s offshore facilities (with particular attention given to “Section IV - Scope of Works / Technical Specifications” which states that the scope of work shall include the provision of equipment and qualified personnel to perform PDT services to Talisman’s facilities and the procedures involving “Pre Phonon Diagnostic Procedure”, “Phonon Diagnostic Procedure” and “Post Phonon Diagnostic & Reports”); • Workpack for “Phonon Diagnostic Technology Pilot Campaign At KNDP-A – Screening Of Structural Bracing Integrity Condition 67 (With Optional Caisson Work)” [exhibits D183 and D249 (approved by Ms. Sim as signified by her initial and chop)]; • Release Order 150882RL002 dated 13.7.2015 for “Phonon Diagnostic Technology Pilot Campaign At KNDP-A – Screening Of Structural Bracing Integrity Condition” which is the document issued by Talisman requiring the provision of the services by the Plaintiff (exhibit D250); and • “Report For Trial Acoustic Diagnostic Technology Pilot Campaign At KNDP-A – Screening Of Structural Bracing For Integrity Assessment” for Work Order Number 150882RL002 dated 19.11.2015 (exhibit P112), the Court is of the view that the Defendant has established that –

the Plaintiff has consistently represented to Talisman that the technology that it was providing was PDT as evident from the 68 presentation, mockup session and discussion conducted by the Plaintiff prior to commencement of the diagnostic work;

the technology that Repsol wanted was PDT. Apart from Ms. Sim’s evidence of this fact, the contemporaneous documents as listed above state that the technology to be provided in all aspects from the equipment, qualified personnel, procedure, reports and training is PDT;

the Plaintiff’s Organisation Chart in Appendix VII – 2.4 in Section VII: Administration Procedures of the Contract has named the Defendant as the “Phonon Specialist” and this fact was admitted by Datuk Fariz (PW5) and Praba (PW6). However, the Plaintiff did not issue a single PO under the Contract with Repsol to the Defendant as required under the Agency Agreement. Instead, the Plaintiff conducted the “PDT work” by using its own employees who were represented as “Phonon Engineers” whilst Talisman/ Repsol was under the impression that the work was 69 carried out by the Defendant’s employees as there were Russians who performed the services;

the Defendant did not know the existence of the Contract between Talisman and the Plaintiff until around October 2016 when Zelim visited Repsol to make a presentation on PDT only to be informed by Ms. Sim and other Repsol’s employees about the LoA and Workpack; and

when Talisman/ Repsol received the Report from the Plaintiff, they immediately looked at the part on “Results” and did not notice – Title and Document Title on the cover page of the Report;

(ii) the statement that Talisman has engaged the Plaintiff to conduct a technology trial “… employing Hybrid Acoustic Technology System (HATS) …” for the screening of the structural bracing under “Introduction”; and 70

(iii) the statement under “Methodology” that HATS “… is an advanced new diagnostic and assessment technique to study reliability of a specific object or asset. It is an integration of acoustic emission technique with phonon analysis and assessment for defect detection. Principally, HATS is an acoustic measurement type of inspection method utilizing the released of energy through deforming defects. … HATS provides real-time data on diagnosed objects irrespective of its state of usage. …” and that the inspection consists of 3 main activities being “Pre Acoustic Inspection”, “Acoustic Inspection” and “Post Acoustic Inspection”. [68] Talisman/ Repsol only realised the usage of the words to signify HATS and “Acoustic Inspection” after Zelim’s visit in October 2016 when it checked the Report again. The Court finds that Ms. Sim is a reliable witness and the so-called contradictions in her evidence as argued by Ms. Manjit are groundless. The non-calling of Hafis Harif, Repsol’s Site Representative and person in charge of the project as a witness (see 71 subpara 131(b) below) is not fatal to the Defendant’s case since the documents speak for themselves. Ms. Sim’s evidence regarding the documents is adequate for the Defendant to discharge the burden of proving its assertions at the trial. Contract with PGB [69] The Court has similarly evaluated the witnesses’ evidence at the trial, and the contents of the LoA dated 12.3.2015 issued by PGB to the Plaintiff for Contract No. SMSO/PGB-GPU/2014/0327 “Price Agreement for Phonon Diagnostic Technology Inspection Services For Gas Processing and Utilities Division, Petronas Gas Berhad” and the Contract for the same on even date (collectively marked as exhibit D167). The findings of the Court are as follows:

The terms in the LoA and the Contract indicate that PGB required PDT Inspection Services to be provided as indicated by the 72 words “Phonon Diagnostics Technology” and “Phonon Diagnostics Inspection” therein.

(b)

the Plaintiff had been awarded “another 200 piping diagnostic using PDT in PGB”;

(ii) the working visa for the “new 4 Russian are almost completed”;

(iii) the Plaintiff shall provide the PO to the Defendant “soon after our people conduct the site visit and calculate the final length of the pipings”; and 73

(iv) the Plaintiff needs the Defendant’s assistance to sign on the parental letter attached to the e-mail as “Petronas request this letter to be signed by Principal of this technology”. Zelim accordingly signed the “Parental/ Principal Guarantee”, which was dated as 15.3.2015, and Prof. Vladimir signed as a witness (exhibit D166).

Subsequently, the Defendant did not receive any PO from the Plaintiff for this project. The Defendant asserted that the projects/ works done by the Plaintiff without the Defendant’s knowledge were “secret jobs” but these were vigorously refuted by the Plaintiff, specifically in respect of the following PO, Reports and works: Final Report for Provision of Integrity Assessment of 74 Pipings at Utility Kertih (UK), Petronas Gas Berhad – Piping Circuit (8 nos.) dated 26.7.2016 (exhibits P127 and P128) and Final Report for Provision of Integrity Assessment of Interplant Pipings at Gas Processing Kerteh (GPK), Petronas Gas Berhad – Piping Circuit (2 nos.) dated 26.10.2016 (exhibit P148) The Court has considered the grounds given by the Plaintiff in submitting that this is not one of the secret jobs as alleged by the Defendant. However, the Court agrees with Ms. Cindy’s argument that this PO was issued by PGB under the LoA and the Contract as aforementioned which are for the provision of PDT. This PO was also issued after the termination of the Agency Agreement and it goes to show that the Plaintiff did not inform PGB that its agency with the Defendant has been terminated. Instead, the Plaintiff took it upon itself to perform the works under the guise of PDT. 75

(ii) PO 097 PGB Piping dated 14.3.2016 (exhibit D241) In his evidence, the subpoena witness Zulfaiz (DW1) said that no services were provided under this PO whist Zelim had agreed that there are no technical reports in respect of this PO. However, the fact that this PO was issued in the first place supports the Defendant’s stance that yet another PO was issued after the termination of the Agency Agreement. It further supports the Defendant’s submission that the Plaintiff’s contention that PGB did not want to use PDT because of numerous complaints against PDT is not true since PGB continued to be interested in PDT.

(iii) Report Studies For Provision Of Reliability Study Utilizing Phonon Diagnostic Technology For PL-221 6”, 0.5KM and PL-218 6”, 1.1KM of Pipeline dated 16.1.2014 (exhibit P144) and the Invoice dated 1.5.2013 (exhibit P214) 76 The Plaintiff contended that this Report was done during Phase 1 with Prof. Vladimir to which Datuk Fariz had testified that Prof. Vladimir and Khosim had asked Hazim and himself not to reveal to Zelim all the previous jobs completed prior to Zelim’s arrival in Malaysia in June 2014. However, as submitted by the Defendant, this Report was not the basis upon which Zelim had written the said Letters since Zelim discovered many more secret transactions that were done by the Plaintiff without the Defendant’s knowledge after the ex-parte injunction was set aside and this Report was one of them. Ms. Cindy had raised a point on pleading during the trial namely, that in the SoC, the Plaintiff did not plead that there were projects in 2013 involving Prof. Vladimir which it did not inform Zelim. In this regard, the Court agrees with the Defendant that the Plaintiff is precluded from attempting to prove this fact and it is nothing more than an afterthought on the Plaintiff’s part. This is evident from Datuk Fariz’s 77 testimony that Zelim arrived in Malaysia in June 2014

(iv) Report Studies For Provision Of Reliability Study Utilizing

Phonon Diagnostic Technology For PL-222R1-R4 6”, 62KM Pipeline (From WLDP-B To WLDP-A) At West Lutong For Petronas Carigali Sdn Bhd dated 16.1.2014 (exhibit P145) and PO dated 25.1.2014 for Provision For Reliability Study Using Phonon Diagnostic Technology For 11 Pipelines (exhibit D179) The Plaintiff submitted that there was a PO for PL-222 issued to the Defendant and hence this cannot be a secret job. However, the Court accepts the Defendant’s contention, which is similar to the Report in subpara (iii) above, that this Report in question are amongst those which Zelim came to find out after the ex-parte injunction was set aside. 79 In any event, the Court is of the considered view that the Defendant has provided compelling reasons to support a conclusion that this Report is a secret job. Firstly, the PO states “Pipelines (PL222)” but the Project Title, Document Title and contents of the Report refer to “PL222RI-R4”. Secondly, the Report is dated 16.1.2014 which is before the issuance of the PO on 25.1.2014. Therefore, this Report could not have been prepared by the Defendant pursuant to the PO dated 25.1.2014 which, according to Zelim he remembers very well because it was the very first PO issued by the Plaintiff to the Defendant for a project in Malaysia. Zelim gave a lengthy explanation as to why he has a vivid recollection of this PO and that the Defendant performed the work for PL222 in June 2014 as hand written on the third page of the PO (refer NoE Vol. 18 on 21.1.2020 at pp 43 and 44). Thirdly, the Report does not have the Defendant’s logo. Instead it has the logo of “PNR Inspection Sdn Bhd” (‘PNR’). Zelim also referred to para 2 of the Report which states that the Plaintiff and PNR shall 80 carry out the work. However, PNR is a company which is unknown to the Defendant and it has never worked with

Report Studies For Provision Of Reliability Study Utilizing Phonon Diagnostic Technology On 2 Units Of Slug Catchers SC-8020 & SC-8040 dated 22.5.2014 (exhibit P146) The Plaintiff’s arguments in respect of this Report are identical as that for the Report in subpara (iii) above and the Defendant’s responses are equally alike. The Defendant offered two other reasons as to why this Report is in fact a secret job. The first PO issued by the Plaintiff to the Defendant dated 25.1.2014 (exhibit D179) was already attention to Zelim. As such, as at the date of this Report i.e.

22.5. 2014, the Plaintiff was already dealing with Zelim and not Prof. Vladimir. Furthermore, there was no PO and/or 81 an invoice for this project. The Court finds there are merits to the Defendant’s contentions.

(vi) Final Report for Provision of Integrity Assessment of Cold Box ASU-1 at Utilities Kerteh (UK), Petronas Gas Berhad dated 4.11.2016 and 9.11.2016 (exhibits P115, P116 and D195) Ms. Manjit submitted that Zelim only made reference to exhibit D195 to support his allegation of a secret project but the Reports in exhibits P115 and P116 show that HATs, and not PDT, was utilised for this project. A comparison of the two latter Reports to exhibit D195 would further show that the words “an enhanced Phonon Diagnostic Technology” was incorporated into the Report in exhibit D195 as per PGB’s request reflected in the Minutes of the “Management Meeting & Project Progress Summary For Price Agreement For Phonon Diagnostic Technology Inspection Services For Gas Processing And Utilities Division, Petronas Gas Berhad” held at PGB, Kerteh, 82 Terengganu on 17.5.2016 which was attended by Hazim (exhibit P201). In addition, the site work for this project was carried out in June 2016 i.e. post-termination of the Agency Agreement and since HATs services were provided, there was no obligation on the Plaintiff to inform the Defendant of this project. I have considered the opposing accounts of events put forth by the parties and in my opinion, there are convincing reasons to accept the Defendant’s version. The provision of the services which is covered by this Report was made under the LoA and Contract between PGB and the Plaintiff, and despite the termination of the Agency Agreement. Zulfaiz testified that it was the Plaintiff who informed PGB that HATs is an enhanced version of PDT. PGB requested for PDT and was under the impression that PDT was being performed for the inspection. When PGB realised that the word HATs were used in the reports, the matter was discussed in the meeting held on 17.5.2016. Based on Item 83 1 in the Discussion Notes of the said meeting which was prepared by the Plaintiff itself (exhibit P201), the issue was stated as “Enhanced Acoustic based technique (HATs) currently being used for diagnostic work” and the action required was: “- MRA agreed to use term PHONON in the report - MRA to revise one (1) report first and submit to PGB for review and approval - Upon approval, MRA to revise all report that contents the terms HATs to PHONON”. A plain reading of the Discussion Notes indicates PGB’s intention in wanting the Plaintiff to revise one report first by substituting the term “HATs” with “PHONON” and once approved by PGB, the Plaintiff was to revise all the other reports in the same manner. Hence, the Defendant correctly submitted that PGB did not request the Plaintiff to state in the report the words “an enhanced Phonon 84 Diagnostic Technology” as alleged by the Plaintiff. PGB’s request is a clear indication that it wanted PDT all along.

Sometime in October 2015, the Defendant discovered that the Plaintiff had in fact conducted the purported “PDT Services” by deploying the Plaintiff’s employees comprising of the Russian “Phonon Specialists” and Malaysian “Phonon Engineers”. Zulfaiz had produced the Daily Progress Reports dated 13.9.2015 and 14.9.2015, which was forwarded to him vide e-mail dated 15.9.2015 by the Plaintiff’s Project Engineer, Izyani Ismail [exhibit D184(a)] stating that the “Phonon Activities for all pipings” have been completed and “only insulation reinstatement work for remaining 3 pipings expected to be finish up by next week”. The Daily Progress Reports were sent to update Zulfaiz on the site progress in relation to the PDT Inspection Services for PGB. In addition, Zulfaiz produced the List of Manpower Details dated 11.10.2015 for PGB’s Cold Box E5-0407, 0408 and 0410 and Cold Box E6-0407, 0408 and 0410 which was forwarded to him via e-mail by the Plaintiff’s Project Coordinator, 85 Ainul Adri bin Basmi [exhibit D184(b)]. Although the Plaintiff claimed that HATs was carried out for these Cold Box, but the List of Manpower Details shows, inter alia, the names of “MRA’s Workforce” consisting of 7 Malaysians, 3 of whom are “Phonon Engineer” and 5 Russian “Phonon Specialist”. 2 of the “Phonon Engineer” were called as PW1 and PW2 and they admitted, under cross-examination, that they are not Phonon Engineers. Zulfaiz had additionally testified that the reason he was under the impression that PDT was performed was because the Plaintiff had informed him that it was so. The Court is of the view that Zulfaiz’s evidence, akin to Ms. Sim’s, is sufficient and trustworthy enough to meet the objectives upon which the Defendant had elected to call him in the first place.

On 14.10.2015, Zelim sent an e-mail to Hazim, Datuk Fariz and Khosim (exhibit P95) to convey that the Defendant has become aware of the illegal/ fraudulent actions of the Plaintiff and the gross violation of the Agency Agreement, specifically that: 86 “… MRA illegally performed and continues to perform exactly Phonon Diagnostics on the objects of Petronas Gas Berhad (Cold Box, Piping and Double Wall Tank according to Contract No SMSO/PGB-GPU/2014/0327) without any awareness and permissions of Diatech, using unoriginal (imitative) Phonon equipment with the involvement of third parties under the guise of Phonon specialist not being part of certified Diatech staff. Thus, the SPC Diatech faced with acts of fraud, deception, breach of copyright and patent rights, as well as falsification of technical reports, licenses and legal documents for Phonon specialists and Phonon equipment by MRA. In addition, MRA illegal involvement of third parties uncertified by Diatech and unlawful use of the equipment of unknown origin for provision of services under the guise of Phonon Diagnostics, first of all, are misleading and violating the rights of Petronas company as the end customer for the inspection of technical state of Petronas industrial facilities to ensure their safe operation. Technical reports presented by MRA under the guise of Phonon Diagnostic reports are not original and more over - do not reflect the actual technical condition of Petronas industrial objects, and, therefore, poses a direct threat of accidents and environmental disasters at 87 industrial facilities of Petronas company with cause of irreparable damage to the environment and ecology of Malaysia. SPC Diatech considers this situation unacceptable and intolerable! For all the above violations and unfair execution of obligations by MRA, SPC Diatech demands the immediate termination of all services provision under the guise of a Phonon Diagnostics, cancellation and annulment of all technical reports and diagnostic results, and urgent written explanation of all the circumstances of this case by October 16th 2015. Special warning to notice to MRA: SPC Diatech is going to officially apply to the parent company of Petronas, Petronas Gas Berhad and other Petronas subsidiaries to officially inform all parties involved about the revealed illegal (fraudulent) actions performed by MRA. …”. Hazim had replied to the above vide an e-mail dated 2.3.2017 (exhibit P96) by basically denying all the Defendant’s allegations. 88 The Plaintiff’s other contentions [70] The Plaintiff gave several reasons in rebutting the Defendant’s allegation that the Plaintiff had claimed to offer PDT services when in reality the Plaintiff did not provide the same and thereby misled the customers. These reasons are dealt with in the succeeding subparas.

Blanket Contract The Plaintiff relied on the evidence given by Hazim and Datuk Fariz in submitting that the appointment of contractors for Asset Integrity Assurance services by way of blanket contracts is a common practice in the oil and gas industry and that the contracts awarded by Repsol (exhibit P105, specifically Article 1.1.17 on the definition of “Release Order” and Article 2.1), PGB (“Price Agreement For Phonon Diagnostic Technology Inspection Services For Gas Processing And Utilities Division, Petronas Gas Berhad” dated 12.3.2015 in exhibit P106, specifically Article 2.1.24 on the definition of “Works” and “Exhibit 89 VI – Administrative Procedures (B) Process Flow For Payment Request” to the contract) and PCSB (“Provision For Phonon Diagnostic Technology Inspection Services For Petronas Carigali Sdn Bhd” dated 17.4.2015 in exhibit P10, specifically Article 2.1.22 on the definition of “Scope of Works” and “Exhibit VI – Administrative Procedures (B) Process Flow For E-Invoicing” to the contract) are blanket contracts which enable the asset owners to order other services as they require and the Plaintiff to render such services for a fixed period of time within the scope of the contracts. In this respect, the title of the contracts do not in any way limit the services to be provided by the Plaintiff to the customers. The Plaintiff claimed that certain aspects in the testimonies given by Ruzlan (PW3), Praba and Ms. Sim have substantiated the existence and usage of blanket contracts in the industry and that the contracts as abovementioned are indeed blanket contracts. Before proceeding further, it is necessary to have a closer look at the provisions in the contracts cited by the Plaintiff and a few 90 other related provisions which, for ease of reference, are quoted below: Articles 1.1.17, 1.1.20 and Article 2.1 in exhibit P105 (the Repsol contract): “1.1 Definitions The following definitions shall be used for the purpose of interpreting the CONTRACT. Further definitions not contained in this Article shall apply to the Section in which they are stated and subsequent Sections: …

1.1.17 “RELEASE ORDER” means a document issued by the COMPANY requiring the provision of the SERVICES by the CONTRACTOR and issued in accordance with Section VII – ADMINISTRATION PROCEDURES. …

1.1.20 “SERVICES” shall mean all services and work (including DELIVERABLES) to be provided by the CONTRACTOR (including provision of EQUIPMENT and 91 other supplies) as described in Section IV – SCOPE OF SEVICES AND TECHNICAL SPECIFICATIONS and all of CONTRACTOR’s activities that are reasonably inferred from the description of such services or work. …

2.1 This CONTRACT does not constitute or imply a commitment by the COMPANY to obtain any specific SERVICES from the CONTRACTOR under this CONTRACT. Commitment for any SERVICES under this CONTRACT shall be made, if at all, through the issuance of specific RELEASE ORDER(s) by the COMPANY at any time and from time to time during the CONTRACT primary period or extended period in accordance with the terms hereof. CONTRACTOR undertakes that it shall carry out the SERVICES specified in any RELEASE ORDER in accordance with the terms and conditions of the CONTRACT.”. 92 Article 2.1.24 in exhibit P106 (the PGB contract): “2.1 The following definitions shall apply to this CONTRACT except where the context otherwise requires: …

2.1.24 “WORKS” means the work to be performed and rendered by the CONTRACTOR or its CONTRACTOR, as expressly set forth in this CONTRACT, which is more particularly described in EXHIBIT I – SCOPE OF WORKS attached herein, and all of CONTRACTOR’s and/or its SUB-CONTRACTOR’s activities that are reasonably inferable from the description of the said SCOPE OF WORKS, including any other activity which is not specified in this CONTRACT but which in the course of the WORKS becomes necessary for completion to be effected.”. 93 Article 2.1.22 in exhibit P10 (the PCSB contract): “2.1 The following definitions shall apply to this CONTRACT except where the context otherwise requires: …

2.1.22 “SCOPE OF WORKS” means all duties to be performed and rendered by the CONTRACTOR or its CONTRACTORs, including the purchase, rent or lease of GOODS, as expressly set forth in this CONTRACT, and all of CONTRACTOR’s and/or the CONTRACTOR’s activities that are reasonably inferable from the description of the SCOPE OF WORKS, including any other activity which is not specified in this CONTRACT but which in the course of the SCOPE OF WORKS, becomes necessary for its completion.”. It is trite law that a contract must be read as a whole in its commercial setting in order to ascertain the true meaning of its clauses and that the words of each clause should be 94 so interpreted as to bring them into harmony with the other provisions of the contract if that interpretation does no violence to the meaning of which they are naturally susceptible (see NE Ry v Hastings [1900] AC 260 at p 269 quoted by the High Court in UDA Holdings Bhd (formerly known as Perbadanan Pembangunan Bandar) v Melewar Leisure Sdn Bhd (formerly known as Harta Bumi Sdn Bhd) [2009] 2 MLJ 408 at p 426). This Court has scrutinised the Repsol, PGB and PCSB contracts and it is unquestionable that the central feature of these contracts is that the inspection technology to be utilised was expressly spelt out in that PDT services were to be performed (see in particular, Section IV - Scope Of Works / Technical Specifications in the Repsol contract; and Exhibit I - Scope Of Works in the PGB and PCSB contracts). As for the PGB contract, the Defendant had even provided the Letter of Guarantee to PGB (exhibit D166) as alluded to earlier in this judgment. 95 To the Defendant, the procedure which entails the issuance of instructions by the customer for services required by way of a PO or Release Order is a non-issue (refer for instance to Clause 8 in Section IV of the Repsol contract). What is the bone of contention, however, is the fact that the Plaintiff did not issue a single PO or Release Order under the Repsol and PGB contracts to the Defendant whilst under the PCSB contract, only one PO was issued. The argument advanced by the Plaintiff that the services are not limited to the services as stated in the Contract Title is correct to the extent that the Articles as above quoted provide that the activities to be performed by the Plaintiff may include any other activity which is not specified in the contract but which, in the course of the works or scope of works, becomes necessary for completion of the same. However, this does not mean that the contracts can be 96 equated as open/ blanket contracts in the sense that the Plaintiff could use any technology when conducting the inspection of the customers’ assets. This would fly in the face of the clear terms in the contracts which provide that the Plaintiff is to perform inspection using PDT. Moreover, Ms. Cindy had cited the case of Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327 at p 336 where the Federal Court had referred to Dr. Geoffrey Chesire’s The Modern Law of Real Property which described an open contract as “If a contract for sale specifies merely the names of the parties, a description of the property and a statement of the price, it is called an open contract. When this form of contract is made, the parties are bound by certain obligations implied by the law.”. This definition is nowhere close to what had been submitted by the Plaintiff to this Court. The Plaintiff’s contention that the contracts are blanket contracts which enables the customers to appoint the Plaintiff “to render any services and not limited to PDT” would, if accepted, place PDT as one of the many 97 types of services that can be rendered as opposed to PDT being a specific diagnostic or inspection method. It defies logic for renowned companies such as Repsol, PGB and PCSB to enter into an open/ blanket contract with the Plaintiff but had, at the same time and in no uncertain terms, specified the particular inspection technology to be utilised. Besides, if the Plaintiff’s position about blanket contracts is true, then the said Letters would not in any way interfere with the contractual relationship between the Plaintiff and its customers but yet, the Plaintiff complained that as a result of the said Letters, the Plaintiff was subjected to clarification and no further jobs were given to it by Repsol and Occidental. The evidence given by Ruzlan and Praba on this matter cannot be regarded as determinative in any way since they were not involved in the negotiations of the contracts with PCSB and Repsol, respectively and would therefore be unable to say what was the intention of the parties at the 98 material time. Praba’s testimony that “Blanket Agreement No. 150882” is stated on the Release Orders in exhibits P107, P108 and P109 merely goes to show that the Release Orders were issued pursuant to Contract No. 150882 in exhibit P105. Praba had said that in gist “… the terms and conditions and what can be carried out is between the contract but issuing the contract itself to MRA does not imply that we have a commitment. Commitment for a specific work only comes through the issuance of Release Order. And that Release Order has to be issued by the company based on specific work that the company will require them to undertake.” (see NoE Vol. 8 on 10.7.2019 at p 25). Seen in its entirety, Ruzlan’s and Praba’s evidence do not undermine the fact that the PCSB and Repsol contracts contain a fundamental term for the provision of PDT inspection services, which is the description that appears in the Release Order in exhibits P107, P108 and P109. 99 When viewed in its totality, the Court is inclined to agree with the Defendant that the Plaintiff introduced the fictitious concept of blanket/ open contract in an attempt to justify the inspection works that the Plaintiff had performed for Repsol, PGB and PCSB.

PDT hardware and software and the Defendant’s expert diagnosticians The Plaintiff relied on the evidence given by Hazim, Datuk Fariz, Ilia (DW2) and Zelim in submitting that:

only the Defendant has PDT hardware and software which it specially invented and manufactured. PDT hardware is the exclusive property of the Defendant and the software is not available in the market. The Defendant is the sole company in the world which has Phonon equipment and technology in industrial diagnostics; 100

(ii) PDT can only be performed using PDT equipment owned by the Defendant and used by certified PDT specialists or engineers trained by the Defendant on PDT;

(iii) the PTD equipment were under the control of the Defendant’s expert diagnosticians at all times and upon the termination of the Agency Agreement, the PTD equipment were taken back by them to Russia;

(iv) the Defendant did not adduce any evidence in court to show that the Plaintiff had returned part of the equipment that was kept in the Plaintiff’s office as alleged by Zelim, in particular the e-mail correspondence between him and Datuk Fariz and the warehouse software or the log which purportedly shows the movement of the PDT equipment;

to provide HATs, the Plaintiff utilises acoustic based equipment that originate from the United States of America and are readily available in the market. The equipment 101 which Alex collected in Russia pursuant to the Letter of Attorney issued by Datuk Fariz on 30.4.2015 (exhibit P210) are acoustic based. PDT cannot be provided with such equipment;

(vi) HATs was performed by the Plaintiff’s employees of various nationalities and not by any of the Defendant’s expert diagnosticians; and

(vii) when a specialist leaves the Defendant, his PDT certificate will be annulled. Hence, any qualification of the Defendant’s former employees including Alex, Marina and Skyrabin are of no advantage and relevance to the Plaintiff. In its Reply Submission, the Defendant explained the alleged use of the Defendant’s hardware and software by the Plaintiff without the Defendant’s consent by reference to the timeline before and after the Defendant’s PDT specialists had come to Malaysia to work on the projects. Much reliance was placed on Zelim’s 102 testimony in rebutting the Plaintiff’s submission that the Defendant did not adduce evidence in the form of the warehouse software or log to show that the Plaintiff had returned part of the diagnostic equipment which was allegedly kept in the Plaintiff’s office. According to Zelim, there is no need to provide such documents to the court because there is sufficient evidence in the form of PDT reports prepared by the Plaintiff to show the use of the PDT software and hardware. In addition, the log contains confidential information of the equipment used for the Defendant’s other clients. Zelim further said that: “… when Professor Shukhostanov came to Malaysia for presentations in 2013, he carried with him PDT equipment. … He kept it at MRA’s office for convenience and storage purposes, not to carry the equipment every time to and from Russia. At the time, there was no possibility or thought that MRA might use this equipment because they did not know how to use it. We did not even consider to be concerned about this. Not to mention that at the time, we had trust in MRA, which was our partner at the time. We had no knowledge that they came to an agreement behind our 103 backs with Alex Tsybanov to carry out PDT work using this equipment. Alex of course knew how to use the PDT equipment, and so he did. That’s why in the report for PL-106, Alexander Tsybanov is mentioned. And this is how our PDT software screenshots got into the report on PL-106.”. Now, lest it be forgotten, the context in which the Phonon equipment was mentioned in the 2nd Statement in the said Letters is that “ … MRA simulated inspections of infrastructure facilities by the PHONON method, although it does not possess the relevant knowledge, necessary PHONON equipment or PHONON trained technical staff.”. The key words are “simulated” which means “to do or make something that looks real but is not real” and “possess” which means “to have or own something” (refer the Cambridge Dictionary at https://dictionary.cambridge.org/dictionary/english/simulate and https://dictionary.cambridge.org/dictionary/english/possess). In other words, what the Defendant alleged in the said Letters is that the Plaintiff had made it look like it was providing PDT to the customers when in reality, the Plaintiff did not have or own the 104 knowledge about PDT and Phonon equipment or trained specialist. From the evidence at the trial and the Plaintiff’s submissions, the Plaintiff does not dispute that it does not have or own the relevant knowledge and that it does not own Phonon equipment. The Plaintiff has gone to great lengths to convince the Court that it did not have PDT equipment at the material time to enable it to simulate inspections by the PTD method. However, Zelim had testified that the PDT equipment were brought to Malaysia in 2013 for purposes of the Defendant’s presentations with the Plaintiff and that the equipment were kept at the Plaintiff’s office. Hence, even if the Defendant’s equipment warehouse data was produced in court, it would show the movement of the equipment from Russia to the Plaintiff’s office in Malaysia but not the logistics of the equipment thereafter. Furthermore, the contents of the Report Studies Provision For Reliability Study Utilizing Phonon Diagnostic Technology For PL 105 106 (From MCOT to SBM-5), 30”, 1.2KM Above Ground Pipeline dated September 2013 (exhibit P4; ‘PL 106 Report’), clearly shows the PDT software screenshots where some of them even have the Cyrillic alphabet. In their Witness Statements, Hazim and Datuk Fariz said that for Phase 1, Prof. Vladimir would send several PDT experts together with PDT hardware and software from the Defendant to be stationed at Miri, Malaysia. The same observations can be made about the Report Studies Provision For Reliability Study Utilizing Phonon Diagnostic Technology On 2 Units Of Slug Catchers SC-8020 & SC-8040 dated 22.5.2014 (exhibit P146; ‘Slug Catchers Report’)) which again shows the PDT software screenshots and some with the Cyrillic alphabet. The site inspection is stated in the Report as having been performed in April 2014. This is the period when Zelim had made his first visit to Malaysia in February 2014 and by Hazim’s and Datuk Fariz’s own narratives, the PDT equipment was kept in a dedicated room at the ground floor of the Plaintiff’s office. Therefore, there is no doubt that at the time when the 106 inspections for PL 106 and the slug catchers were carried out, the Plaintiff did have the PDT equipment. With regards to the Plaintiff’s contention that it did not have the Defendant’s expert diagnosticians, the impugned statement says “PHONON trained technical staff”. The Plaintiff does not dispute that Alex and Marina were former employees of the Defendant. Ilia had given detailed evidence as to how he came to discover the Plaintiff’s act in preparing working visas for Alex and Marina sometime in May 2015. Ilia also found out that the Plaintiff had prepared the Letter of Attorney dated 30.4.2015 authorising Alex to collect equipment from Moscow. Ilia then informed Zelim about these incidents and this led Zelim to send the e-mail dated 18.5.2015 demanding for the Plaintiff’s explanation.

“Phonon” is a generic word The Plaintiff submitted that Hazim had testified that “Phonon” is a generic word. It was contended that the term “Phonon 107 Engineer” and “Phonon Specialist” in the Repsol contract, Workpack and Daily Progress Report (exhibits P105, D181 and D251); PGB Daily Progress Report and List of Manpower [exhibits D184(a) and (b)]; Curriculum Vitae (‘CV’) (exhibits D173 to D175 and D246); and Employment Pass of Alex, Marina and Skryabin (exhibits D168 and D169) were not created by the Defendant and did not indicate that the said individual is providing PDT. The Plaintiff claimed that not a single document that originates from the Defendant uses the said term. Furthermore, the Defendant had pleaded that an employee who has completed the PDT training conducted by the Defendant would be certified as a “Phonon Expert Diagnostician” and this was confirmed by Ilia and Lidiia. Lidiia went on to say that the Defendant was trying to unify the designation to comply with the national classifier of designations and was, at the time of her evidence in court, using the term Engineer of First, Second and Third Category. 108 It seems to me that the Plaintiff’s contentions have missed the mark. It is irrefutable that the Defendant has obtained a trademark registration for the word “Phonon” under the TMA 1976 (exhibit D266). Sub-s 10(1) of the TMA 1976 provides that in order for a trademark other than a certification trade mark to be registrable, it shall contain or consist of at least one of the particulars as stipulated in paras (a) to (e) which includes “any other distinctive mark” where the words “distinctive mark” is defined in sub-s (2A). Applying the provision of sub-s 35(1), the registration of the Defendant as registered proprietor of the trademark “Phonon” in respect of diagnostic services shall give the Defendant exclusive right to the use of the trade mark in relation to those services subject to any conditions, amendments, modifications or limitations entered in the Register. The Defendant also hold a “Certificate of trademark (service mark)” for “Phonon” in Russia. Therefore, the word “Phonon” cannot be said to be a generic word in so far as diagnostic service is concerned. It necessarily follows that the Defendant’s experts who performs PDT would have the word “Phonon” in 109 their designation i.e. “Phonon Expert Diagnostician”, “Phonon Engineer” and/ or “Phonon Specialist”. Furthermore, as submitted by the Defendant, out of several generic terms in physics, it is devoid of logic for the Plaintiff to choose and use the word “Phonon” as a reference for its employees who are said not to perform any phonon diagnostic inspection but only acoustic inspection. Instead of designating them as “Acoustic Engineer” or “Acoustic Specialist”, the word “Phonon” is used even though as Khairul (PW1) and Firdaus (PW2) had admitted during cross-examination, they are not Phonon Engineers. The irresistible conclusion is that the Plaintiff did so with the intention of misleading the customers into believing that PDT services were being provided. 110 Termination of the Agency Agreement [71] It is irrefutable that the part in Statement 3 which states that the Defendant has terminated the Agency Agreement and closed all business with the Plaintiff is true. With regards to the part which states that “Having learned of the illegal actions of the Plaintiff, the Defendant terminated the Agency Agreement”, the Plaintiff submitted that since the reasons for termination were not stated in the termination letter dated 24.2.2016 (exhibit P97), the Defendant thus had failed to justify this statement. [72] In SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464, the Federal Court held, inter alia, that the question of valid termination turns upon whether or not there was in fact a valid reason at the time of termination and not on whether or not the terminating party (subjectively) knew or believed there to be one. The relevant passage from the decision delivered by Zainun Ali FCJ is shown below: 111 “[23] It is trite law that ‘if a party refuses to perform a contract (i.e. wishes to terminate), giving a wrong or inadequate reason or no reason at all, he may yet justify his refusal it there were at the time facts in existence which would have provided a good reason, even if he did not know of them at the time of his refusal’ (see Chitty on Contract (32nd Ed) E Peel (eds) at 24-014). The question of valid termination, therefore, turns upon whether or not there was in fact a valid reason at the time of termination and not on whether or not the terminating party (subjectively) knew or believed there to be one. [24] Curiously, the submissions of learned counsel for the appellant offer little help in establishing, as a matter of principle, that termination by notice requires the communication of particularised reasons from the terminating party to the non-terminating party. Accordingly, no such principle exists in the general law of contract.”. 112 [73] Having held that there is no requirement for particularised reasons to be communicated by the terminating party to the non-terminating party under the general principles of contract law, the Federal Court then considered the issue as to whether particularised reasons were required for a notice of termination in accordance with the contractual provisions in the agreement between the parties in that case. [74] In the instant case, Clause 6 in the Agency Agreement governs the “TERM AND TERMINATION” of the Agreement in the following manner: “6.1 This Agreement shall be in effect for a period of five (5) years from the date of this Agreement.

6.2 Either party is entitled to terminate this Agreement by giving a written notice to the other party in the following events: a. If their party is in breach of any obligation specified hereunder and fails to remedy such breach within fifteen (15) days upon receipt of a written notice specifying the breach and requiring its remedy; or b. If either party becomes insolvent or bankruptcy, has a receiver appointed over the whole or any 113 part of its assets, enters into any compound with creditors, or has an order made or resolution passed for it to be wound up.

6.3 Notwithstanding the provisions stated hereunder, either party is entitled to terminate this Agreement by sending a written notice to the other party at least thirty (30) days in advance.”. [75] The issue as to whether the opening words of Statement 3 referring to the “illegal actions” of the Plaintiff are true or substantially true is dependent on the analysis of the evidence before the Court concerning the other impugned statements. Since this Court has pronounced the decision in the present suit, it can safely be said at this juncture that the Court has concluded that the Defendant has successfully proven its case of illegal actions on the part of the Plaintiff. There is ample evidence to support the Defendant’s position that, prior to the issuance of the termination letter, it had discovered about these illegal actions and hence, there is in fact a valid reason to bring the Agency Agreement to an end. 114 [76] In these circumstances, the Defendant was well within its contractual rights in invoking Clause 6.3 of the Agency Agreement as stated in the termination letter. The words “Notwithstanding the provisions stated hereunder”, given their natural and ordinary meaning, are reflective of the intention of the parties that the right of either party to terminate the Agreement upon 30 days’ notice in advance is preserved despite the provision of Clause 6.2 and any other provision in the Agreement. Statements 6 and 7: The Plaintiff claimed relationship between HATs and PDT and giving the impression that they have equal capabilities – leeching on PDT to promote HATs - The parties’ submissions [77] It is the Defendant’s stance that HATs is a name concocted by the Plaintiff after complaints were made by the Defendant to the Plaintiff and in anticipation of the termination of the Agency Agreement. After the termination of the Agency Agreement, the Plaintiff continued to 115 promote HATs but it still used the same explanation and drawings in relation to PDT so as to promote HATs. [78] The Defendant relied on the following documents in submitting that the Plaintiff intentionally misled customers into believing that HATs is related to PDT in that it is supposedly an enhanced version of PDT and is based on phonon technology or has similar technical capabilities with PDT:

HATs Reports which the Plaintiff had prepared and provided to the customers: • Final Report On Integrity Study Using Hybrid Acoustic Technology System (HATs) For Bottom Tank T-82 At MCOT, Miri dated 24.6.2016 (exhibit P20); • Final Report On Integrity Study Using Hybrid Acoustic Technology System (HATs) For Bottom Tank T-4210 At MCOT, Miri dated 24.6.2016 (exhibit P22); 116 • Final Report for Provision of Integrity Assessment of Pipings at Utility Kertih (UK), Petronas Gas Berhad dated 15.6.2016 and 26.7.2016 (exhibit P128); • Final Report for Provision of Integrity Assessment of Interplant Pipings at Gas Processing Kerteh (GPK), Petronas Gas Berhad dated 26.10.2016 (exhibit P148); and • Final Report for Provision of Integrity Assessment of Cold Box ASU-1 at Utilities Kerteh (UK), Petronas Gas Berhad dated 4.11.2016 (exhibit D195);

the presentations on “Hybrid Acoustic Technology (HAT) Intelligent Screening Tool For Asset Integrity Assessment” by the Plaintiff and Velosi (exhibit D189) and by the Plaintiff (exhibit D64) as compared to the presentation on “Phonon Diagnostic 117 Technology (PDT) Intelligent Screening Tool For Asset Integrity Assessment” by the Plaintiff (exhibit P139);

exhibition materials on HATs in Saudi Arabia;

the Plaintiff’s Technical Proposal on HATs; and

newspaper cutting titled “VSSI focuses on developing niche environmental-friendly processes” marked as ID. D234(a) (in black and white) and ID. D234(b) (in colour). In this regard, the Defendant submitted that the newspaper article ought to be admissible pursuant to sub-s 60(3) of the Evidence Act 1950 [Act 56] (‘EA 1950’) and the legal principle as held in Ho Chien v PP [1936] 1 JLR 114 that evidence other than the object itself, which in this case is the original copy of the article, can be produced to prove the existence of the said object, if it is the best evidence that can be reasonably obtained under the circumstances. 118 [79] For the Plaintiff, Ms. Manjit submitted that HATs and PDT are completely two different technologies utilising two different concepts. The name of the technologies are also distinctly different and do not in any way cause confusion. It was further submitted that the Plaintiff never claimed a relation between HATs and PDT because HATs is far superior compared to PDT and PDT is viewed as a failed technology with many complaints and restrictions on its usage. [80] The Plaintiff’s basis of comparison is the presentation slides on HATs in exhibit P142 as against the slides on PDT in exhibits P139, P140 (the Plaintiff’s presentation on PDT) and D261 (“SPC Diatech LLC Company Presentation”) which the Plaintiff argued would show that the materials used for the HATs presentation is completely different from the materials used for the PDT presentation albeit some hardware used in the course of the inspection may be similar. [81] In so far as the evidence adduced by the Defendant to justify the impugned statements, the Plaintiff contended that the presentations relied upon by Zelim are the PDT presentations whilst Hazim’s 119 testimony made reference to the Plaintiff’s presentation on HATs to PCSB dated 21.3.2016 (exhibit P142) wherein Zelim had admitted did not contain any information on PDT. - The findings of the Court [82] I will first deal with the Plaintiff’s submission on the issue of pleading viz. that it is not the Defendant’s pleaded case that the Plaintiff claimed HATs is an improved version of PDT and so the Defendant must not be allowed to submit on a case which is not pleaded. It is my considered view that the issue of HATs as being an enhanced PDT is to illustrate one of the ways in which the Plaintiff had misrepresented to customers about the diagnostic and inspection to be applied in a particular project and had leeched on the reputation of PDT so as to promote HATs. This same issue had already been raised at the hearing of the application for an interlocutory injunction and therefore, the Plaintiff is not taken by surprise. No objection was raised by the Plaintiff during the trial and I do not think that the Defendant is 120 attempting to improve on its pleaded case such that it should be barred from making submissions on the matter. [83] It cannot be denied that under “Methodology” in exhibits P20, P22 and P128, there is a statement which reads “… (HATs), an enhanced Phonon Diagnostic Technology Inspection method is an advanced diagnostic and assessment technique to study reliability of a specific candidate.” whilst under “Executive Summary” in P148 and D195, it says that “MRA employed … (HATs), an enhanced Phonon Diagnostic Technology.”. [84] Ms. Cindy referred to The Concise Oxford Dictionary of Current English (9th Edition), Clarendon Press, 1995 and this Court had also looked up the online Cambridge Dictionary where “enhance” means “improve” and “better than before”, respectively. Therefore, by stating that HATs is an enhanced PDT, the Plaintiff is claiming that there is a relationship between HATs and PDT in the sense that HATs is an improved or better version of PDT. It is ironical that there is such a connection in the HATs Reports as abovementioned when at the same time, Hazim 121 was trying hard to impress upon the Court that PDT is a failed technology and the Plaintiff does not want HATs to be associated with PDT at all. [85] The Plaintiff’s argument that the testimonies given by Zulfaiz and Zelim prove that the usage of the phrase “HATs, an enhanced PDT” in exhibits P128, P148 and D195 and was done purely at the request of PGB has been dealt with earlier and rejected. The Court takes the view that the contemporaneous documents support the Defendant’s contention that the Plaintiff had intentionally claimed a relationship between PDT and HATs by giving false information to its customers that HATs is an enhanced version of PTD in order to leech upon the goodwill of PDT. [86] As for the Plaintiff’s power point presentation of HATs, the Court has closely examined – 122

the slides for the presentation on HATs by the Plaintiff and Velosi (exhibit D189) and by the Plaintiff (exhibit D64) together with the Plaintiff’s presentation on PDT (exhibit P139); and

the images from the slides as reproduced in Annexure B to the Defendant’s Written Submission, and the irresistible conclusion is that the slides in the presentation on HATs are not only similar to the slides in the presentation on PDT, but some slides are in fact identical. [87] At the trial, Syafiq (DW4) had testified that he was involved in the preparation of the slides on HATs marked as exhibits D64, D65, D192, D193 and D189 by contributing the technical parts. He confirmed that the slides in exhibit D192 (September 2016) were presented to PGB wherein mention is made of the objectives of the presentation which, among others, was to brief PGB on the contract with the Plaintiff (exhibit D167). Under “Project Scope”, the following statement can be seen (with my added emphasis): 123 “To provide professional and satisfactory services using Phonon Diagnostic Inspection to inspect PGB’s static equipment, which includes but not limited to piping, tanks, cold boxes and structures during construction, commissioning, in-service, repair, alteration, rerating, re-commissioning, shutdown and turnaround to conform with statutory requirements, construction and inspection codes, and PETRONAS Technical standards (PTS).”. [88] Syafiq further stated that the slides in exhibit D193 were presented to MTBE Malaysia Sdn Bhd (‘MTBE’) in 2016 by Ir. Jaafar Ahmad and himself to inform the client about the enhancement of the technology from Phonon to HATs. This can be seen in the slide on “Background” as follows: “● A technology presentation and proposal on Phonon Diagnostic was made in August 2015. • Since incorporation, MRA has conducted inspection and assessment for 40 projects. • Based on these experience, we have further develop and enhance the technique called HATS. • MRA has carried out numbers of project employing HATS. 124 • MRA shall be submitting a revise proposal based on HATS.”. [89] Ms. Manjit highlighted the evidence by Hazim and Datuk Fariz that the Defendant, Prof. Validimir and Zelim did not provide any information, document or presentation slides to market and promote PDT. Datuk Fariz had gathered the information from the presentation slides from Skypearl and Calidad (exhibits P136 and P137), the Defendant’s website (exhibit P138) and the webpage of Shanghai Daodun Science & Technology Co. Ltd. (‘Shanghai Daodun’) (exhibit P141) to create the slides to market PDT as per exhibits P139 and P140. To this, I would accept the Defendant’s retort that the source of information which brought about the presentation slides on PDT is immaterial since the issue is not about those slides (which are for purposes of comparison only) but the ones which the Plaintiff had prepared in presenting and explaining HATs to its customers. These slides evidently contain text, diagrams and features which are similar to the slides on PDT. 125 [90] The Plaintiff contented that the HATs presentation slides in exhibit P142 does not contain any information on PDT. However, it is noted that the slide with the heading “Determine Of Location And Size Of Anomaly” at p 3791, B25 in that exhibit has Cyrillic alphabet. In any event, even if the Plaintiff’s contention is true, it does not in any way undermine the evidence which the Defendant has produced in respect of other slides on HATs that do in fact contain such information. [91] The Plaintiff also relied on the e-mail from one Diana Nguyen to Masliyana Mohamad Khosim and copied to Hazim dated 19.12.2016 with the subject “Meeting on Dec. 23” (exhibit P211) which begins as follows: “ …

Pls. advise your skype details. Thanks.

Below is the agenda for the meeting. We appreciate if you sent us the answer for checking prior to the meeting.

2.1 Velosi shall make the presentation for HAT technique. 126

2.2 Velosi shall present for the steps to be implement at side so that CL can have better view for preparation. …” (emphasis added). [92] The Court has read the entire e-mail and finds that it essentially touches on the agenda for the meeting scheduled to take place on 23.12.2016 including the list of questions for the Plaintiff which will be raised by the client. The statement that “Velosi shall make the presentation for HAT technique.” does not in itself conclusively prove that Velosi had prepared the presentation slides in exhibit D189 as alleged by the Plaintiff. It is not uncommon for a person or a few persons to be tasked to prepare slides for purposes of a presentation which would finally be delivered by someone else who was not involved in the preparation at all. Considering the doubts surrounding the credibility of Hazim and Datuk Fariz (see subparas 131(f) and (g) below), it is unsafe for the Court to accept the Plaintiff’s version of events without corroborative evidence from a representative of Velosi. 127 [93] As for the Plaintiff’s submission that exhibit D189 was prepared and presented by Velosi in the capacity as the Plaintiff’s local partner in Vietnam as per the common practice, the Plaintiff’s appointment as the Defendant’s agent in Vietnam was covered by the “Exclusive Agent Appointment Letter” for a period of 5 years from 17.6.2014 for the territory of South East Asia (exhibit P77). The said Appointment Letter does not expressly provide that the Defendant’s prior written consent must be obtained before the Plaintiff can appoint Velosi as its local partner in Vietnam. However, the same reasoning on the need for direct evidence by Velosi to support the Plaintiff’s contentions is applicable in this respect as well. [94] In similar vein, the Court finds that there is insufficient evidence to support the Plaintiff’s submission that, following the presentation to Cuu Long Company in Vietnam, the project was finally awarded to the Defendant. Datuk Fariz merely stated that “… the project was awarded to Diatech PDT … Actually Velosi lost the deal.” without any documentary evidence as proof (refer NoE, Vol. 7 on 9.7.2019 at p 54). Zelim said “… We work with Cuu Long in Vietnam. …” as part of a long 128 answer to Ms. Manjit’s question as to what Zelim meant when he used the phrase “substantial goodwill and reputation” in his Witness Statement (refer NoE, Vol. 13 on 18.10.2019 at p 53). When read in its proper context, Zelim’s evidence cannot amount to a confirmation of Datuk Fariz’s statement in court. [95] The Plaintiff additionally asserted that based on the e-mail dated 27.5.2015 from Zelim to Hazim (exhibit P93), the Defendant was aware that the Plaintiff was promoting other technologies at the material time and so the Plaintiff then introduced HATs to its customers. The relevant part of the email reads: “I would like to emphasize once again, we have never interfered in your relationship and communication with other people and companies. It is your right to develop MRA and its technologies, but without breaking our interests and creating risks and challenges for Diatech. And Mr. Tsybanov and Co. harmed and continue to harm our company, creating threats and risks to our business.”. 129 [96] Zelim had explained in court that examples of “other technologies” that the Plaintiff was allowed to develop are painting and cleaning, and fundamentally anything that would not be in competition with PDT. This, to me, is perfectly logical. It is preposterous of the Plaintiff to suggest that HATs come within the scope of “other technologies” and that the Defendant had no objections to the development of HATs. [97] This leads me to Hazim’s claim as the inventor of HATs. I have considered Hazim’s educational background, working experience and evidence as a whole and I am inclined to conclude that Hazim does not have the requisite ingenuity, knowledge and skills to invent a complex diagnostic technology with his limited exposure in this field of work. As submitted by the Defendant, an invention usually takes years of research and development as well as vigorous tests before a novel product can finally be marketed. However, if Hazim’s testimony is to be believed, he remarkably managed this feat within the span of approximately one year and this purported new technology was easily introduced and accepted by customers in the multibillion oil and gas industry without any trials tests being carried out beforehand by the 130 Plaintiff. Hazim did not produce his journal or notes or any documentary evidence at all to support his claim as being the inventor of HATs. Nor was there any scientific literature on the purported HATs diagnostic technology. [98] In addition, the absence of a Petronas Standardised Work and Equipment Category (‘SWEC’) Code for HATs is also telling. Zelim testified (refer NoE Vol. on 9.1.2020 at p 26) that: “I’m not sure how to explain why something doesn’t exist. I can explain how to prove when something does exist. For example, in Petronas, technologies have codes. … All technologies Petronas applies have a SWEC code. … phonon technology has its SWEC code, and it is here in the bundles. HATs does not have a SWEC code. If it existed, it would have been listed by Petronas. Petronas lists acoustic emission technology. There is no any recognition whatsoever by international organisations of such technology by the name HATs. …”. 131 [99] Yet more pertinent questions arise from the Plaintiff’s “Financial Statements 31 December 2015” (exhibit P207) wherein the “Income statement” shows that the Plaintiff –

had a revenue of RM17,257,059.00 in 2014 and RM30,012,266.00 in 2015 bringing to a total sum of RM47,269,325.00;

received gross profits of RM5,319,637.00 and RM12,344,894.00 for 2014 and 2015, respectively; and

spent RM1,752,519.00 and RM2,264,735.00 for other operating expenses and RM1,670,512.00 and RM3,356,360.00 on staff costs in 2014 and 2015, respectively. The Plaintiff submitted that it had invested significant amount of resources, time, energy and effort to promote PDT in Malaysia where the costs incurred in securing appointments with local companies and international companies are RM11,937,000.00 in 2014 and 132 RM17,000,667.00 in 2015 whilst other operating expenses for presentations and participation in exhibitions are RM1,752,519.00 in 2014 and RM2,264,735.00 in 2015. However, the value of the 7 POs which were issued by the Plaintiff to the Defendant for the period spanning from 25.1.2014 to 13.9.2015 (exhibit D179) is merely USD858,530.40 (equivalent to approximately RM3.5 million). Nonetheless, as an agent, the Plaintiff has somehow been able to amass a total revenue of RM47,269,325 in 2 years! Furthermore, if the Plaintiff had dutifully marketed and promoted PDT, why did the Plaintiff need to provide substantial sum for staffing and even doubled the numbers in 2015? [100] Then there’s the Plaintiff’s claim of having developed HATs in March 2014 and introducing the same to the oil and gas industry at the end of

If all the costs expended by the Plaintiff were for PDT alone, this means that it spent nothing at all to purchase acoustic equipment and to develop, promote and market HATs but amazingly HATs was immediately embraced and commended by its customers. The only reasonable inference that can be made from the Plaintiff’s own Income 133 Statement is that it was paying substantial amount of monies to employ the Defendant’s former employees to do diagnostic work and simultaneously leeching on PDT in order to promote HATs. [101] The next material on HATs which resemble the technical information on PDT from the Defendant’s website (exhibit D258 with “©Diatech, 2013”) is the buntings and banners, with the Plaintiff’s and Bisco’s logos, placed at an exhibition in Saudi Arabia. Hazim could not deny being present at this event as a photograph of him was tendered together with the other shots as exhibit D196. When asked in cross-examination as to whether the Plaintiff had provided the information that ended up on the buntings and banners, Hazim was evasive but admitted that information on PDT can be seen. He said: “… They have both presentations for HATs and PDT, we’ve provided some of the information to them. … And then they have prepared their own buntings and catalogues. When I went there, I noticed that since this is a … exhibition for HATs, I noticed that the buntings and banners contained information 134 with regard to PDT materials. So I’ve immediately instructed them actually to remove these buntings and brochures from the exhibition and I believe they have. …”. [102] In my view, Hazim’s answers were feeble attempts to disassociate the Plaintiff from what he himself has admitted as being information on PDT which has found its way on the exhibition material on HATs. This is a clear act of misleading visitors to the exhibition into thinking that HATs is capable of delivering everything that PDT has been offering in the past. [103] The leeching continues with the “Technical Proposal – Provision For reliability Study Utilizing Hybrid Acoustic Technology Inspection Services For Firewater Line” prepared by the Plaintiff for MTBE (exhibit D194). Under “Introduction”, the Plaintiff claimed that HATs is an integration of acoustic emission technique with phonon analysis and assessment for defect detection. Pictures of PDT equipment and software bearing the Defendant’s logo are included in the Technical Proposal. 135 [104] Finally, there is the newspaper article titled “VSSI focuses on developing niche environmental-friendly processes” [ID.D234(a) and

(b)] wherein Vanguard, the Plaintiff’s local agent in Oman, stated that “VSSI takes pride in deploying state of the art technologies and to this end has recently introduced HAT inspection system based on Phonon Technology in Oman.”. As the Plaintiff claimed to be the inventor of HATs, the Defendant submitted that such information must have been obtained by Vanguard from the Plaintiff. [105] The Court has considered and accepts the Defendant’s submission that the newspaper article is admissible on the following grounds:

sub-s 60(3) of the EA 1950 provides that “If oral evidence refers to the existence or condition of any material thing including a document, the court may, if it thinks fit, require the production of that material thing or the document for its inspection.”. When asked when he first saw the word “HATs”, Zelim said that, “ I wouldn’t remember the exact document that I saw first but for 136 instance, I saw it mentioned in the article from Oman local newspaper called Muscat Daily….”. A copy of the article has been produced for the inspection of the Court and to corroborate Zelim’s evidence as to its existence;

in Ho Chien v PP [1936] 1 JLR 114, it was held that “… if it is not reasonably practicable to produce the material thing itself, they should produce a position of it, or a sample of it or a photograph, or a sketch or some other evidence which may supply the court with the best evidence reasonable obtained under the circumstances.”. ID.D234(a) and (b) is the best evidence reasonably obtained under the circumstances because litigation was not contemplated at the time when Zelim first came across the article and the original copy was not reasonably accessible when litigation was initiated as it is only obtainable in Oman; and

although Datuk Fariz could not remember exactly when the photograph that was published with the article was taken, he confirmed that he is one of the persons in the photograph 137 together with Alex and Marina and that it was a dinner event in Oman. [106] Based on the evidence before the Court, there is no doubt whatsoever that the Plaintiff had indeed leeched on, or used, the goodwill and reputation of the Defendant’s PDT to promote HATs. The Defendant is known for using Phonon technology for diagnostic services and by leading the customers into believing that HATs is related to PDT, the Plaintiff wanted to continue to perform diagnostic services for them even after the termination of the Agency Agreement. Statement 8: Endangering industrial and environmental safety - The parties’ submissions [107] The Defendant contended that from the evidence given by Hazim, Praba and Zelim, it was not disputed that any improper inspection and analysis of defects of the facilities within the premises of the oil and gas companies will result in safety risks. By using non-certified phonon 138 specialists and non-phonon equipment to perform diagnostic services for the works, the Plaintiff’s actions would likely cause inaccurate results. This in turn may endanger industrial and environmental safety and lead to financial and reputational damage to customers. [108] Ms Manjit submitted that the Defendant failed to justify the defamatory allegation in Statement 8 for the following reasons:

HATs does not expose the industry/ environment to any risk or danger. It was developed to prevent accidents and technogenic catastrophes. There has never been any accidents or complaints in the history of the Plaintiff’s services as opposed to the Defendant’s.

The Plaintiff practices high standard of health and safety requirements by its customers. To the contrary, the Defendant’s Expert Diagnosticians have been charged and found guilty of contravention of a major offence in the PGB facility. 139

The Defendant and witnesses from PCSB, PGB and Repsol never testified and/ or adduced any documentary evidence on any actual or potential purported industrial and/ or environmental danger caused by the Plaintiff, its employees and/ or HATs.

No evidence was produced by the Defendant of any purported financial and/ or reputational damage and endangerment of national security of a number of States caused by the Plaintiff, its employees and/ or HATs. - The findings of the Court [109] I will first address the Plaintiff’s submission on the “major offence” committed by the Defendant’s Expert Diagnosticians, Artem Kuleshov and Alexander Volchkov in March 2015 at the compound of Gas Processing Santong (‘GPS’), PGB. I have examined the report lodged by one Kpl. Samsu Bahari Bin Mohamad, Security Supervisor IV, and the e-mails and letter between the representatives of the Plaintiff and 140 PGB (exhibit P88) and it is obvious that the offence is for driving in an unsafe manner at the parking lot area of GPS, PGB whereby the vehicle came out of the junction at high speed and without stopping. Whilst the offence is serious, it does not involve the performance of inspection works and analysis of the defects of the facilities at GPS, PGB. The one-off offence which took place cannot be elevated to be within the genus of acts which pose a threat of the nature as envisaged in Statement 8 in the said Letters. [110] The learned Defendants’ counsel submitted that the objective of diagnostics is to determine the technical conditions, the presence of leaks and defects and the residual life estimation of technical objects of a facility. With the results obtained, repair works that are necessary to prevent accidents, technical disasters and environmental damage will be recommended. However, if the results of the diagnostics are inaccurate, the recommendation would also not be correct and thus, there could potentially be accidents and technical disasters. In my view, this is perfectly logical in the high-risk areas where the facilities of oil and gas companies are located. There is no necessity for the 141 Defendant to elicit or adduce evidence to the extent as argued by the Plaintiff as the possibility of jeopardising the industrial and environmental safety of the customers’ assets as indicated by the words “may be” is sufficient to justify the making of Statement 8 in the said Letters. [111] Moreover, since this Court has held that the Plaintiff had used the name of PDT to mislead customers and simulated inspections by secretly employing the Defendant’s former employees and passing them off as HATs, the Plaintiff’s assertions on the so-called development objectives, advantages and/ or track record of HATs must be rejected as being absolutely baseless and a blatant lie. 142 Statement 9: Forgery, theft and appropriation of money - The parties’ submissions [112] It is the Defendant’s position that there has been a fair amount of forgery committed by the Plaintiff in this case involving the following documents:

Reference letter dated 27.1.2015 (‘Reference Letter’) for the Defendant’s employees namely, Mikhail Primachenko, Artem Kuleshov, Hya Khokhlov, Alexander Volchkov, Alex, Marina and Skryabin Vladimir (‘Skryabin’) allegedly signed by Lidiia (DW3) and issued by the Defendant (exhibit D224);

Certificates of Competence dated 25.11.2013 for the Plaintiff’s employees namely, Nizammudin bin Mohammad, Ainul Adri Bin Basmi and Budi Hazrin Bin Ismail allegedly signed by Prof. Vladimir and issued by Diatech (exhibit P135); 143

Invoices for PDT for PCSB-SKO i.e. PL 106 (from MCOT to SBM-5) 30”, 1.2 km of Aboveground Pipeline dated 1.5.2013 (exhibit P213); PL-221 (from WLDP-A to WL-123) 6”, 0.5 km dated 1.5.2013 and PL-218 (extension from WL-123 to WLDP-B) 6”, 1.1 km of Pipeline (exhibit P214); and 1 unit of Double Wall Tank at Export Terminal Plant Operations Division, PGB dated 18.12.2013 (exhibit P215) (hereinafter collectively referred to as the ‘3 Invoices’) purportedly signed by Prof. Vladimir;

“Contract For Services - Phonon Specialist” for the Defendant’s employees namely, Alexander Volchkov, Minigalina Razilya, Primachenko Mikhail, Primachenko Nikolai and Ilia (DW2) which were allegedly signed by them for purposes of visa application (marked as ID202 to ID206); and

HATs Reports for PCSB (Sarawak Operations/ Oil) as the client with the cover pages signed by Ruzlan: • Defect Verification For 10 Nos. Pipings At PC4DP-A Platform Offshore Bintulu dated 3.5.2016 (exhibit P12); 144 • Defect List For 36 Nos. Piping At PC4DP-A Platform Offshore Bintulu dated 27.4.2016 (exhibit P14); • Defect List For 10 Nos. Piping PC4DP-A Platform At Bintulu Offshore dated 14.3.2016 (exhibit P16); • Defect Verification Report For Integrity Study Using Hybrid Acoustic Technology System (HATs) For Bottom Tank T- 82 At MCOT, Miri dated 8.12.2016 (exhibit P18); • Final Report On Integrity Study Using Hybrid Acoustic Technology System (HATs) For Bottom Tank T-82 At MCOT, Miri dated 24.6.2016 (exhibit P20); • Final Report On Integrity Study Using Hybrid Acoustic Technology System (HATs) For Bottom Tank T-4210 At MCOT, Miri dated 24.6.2016 (exhibit P22); • Final Report For Buried Piping (Package C) At Bintulu Crude Oil Terminal dated 25.2.2016 (exhibit P24); • Defects List Report For Slug Catcher (Pressure Vessel) V2600 dated 12.1.2016 (exhibit P26); • Defects List Report For Slug Catcher (Pressure Vessel) V1600 dated 12.1.2016 (exhibit P28); and 145 • Final Report For Buried Piping (Package C) At Bintulu Crude Oil Terminal dated 25.2.2016 (exhibit P30). [113] With regards to the part of Statement 9 where the Defendant claimed that there has been theft and appropriation of money, the Defendant relied on the fact that only 7 POs were issued by the Plaintiff to the Defendant during the period when the Agency Agreement was in force and not a single PO was issued in respect of the 17 POs that were issued by PGB to the Plaintiff pursuant to the LoA and Contract between PGB and the Plaintiff as alluded to earlier. Ms. Cindy submitted that the kind of services offered are very lucrative in the industry and this provides the impetus for the Plaintiff to keep the projects from the Defendant’s knowledge so that the Plaintiff can keep more profits for itself. [114] In response, the Plaintiff asserted that the allegations of forgery and fabrication are raised to the Defendant’s convenience in that any situation or document for which the Defendant has no response is conveniently classified as forged or fabricated. Moreover, the Defendant did not lodge any police report and nor did it offer any 146 explanation for the failure to do so. Hence, with reference to the cases of David Wong Hon Leong v Noorazman Bin Adnan [1995] 4 CLJ 155 and KTL Sdn Bhd v Leong Oow Lai [2014] MLJU 1405, the allegations are said to be an afterthought and completely unsubstantiated. [115] It was additionally submitted that although the allegation of forgery of signature is specific to the forgery of signature of the CEO which is Zelim, the Defendant did not adduce any documents to support this accusation but instead attempted to substantiate forgery by other documents as mentioned in subparas 112(a) to (d) above. [116] Furthermore, no expert evidence or opinion was tendered by Diatech on the allegation of forgery and fabrication and so, on the authority of Letchumanan Chettiar Alagappan @ L Allagappan (sebagai pelaksana wasiat/executor kepada SL Alameloo Achi alias Sona Lena Alamelo Acho, si mati) & Anor v Secure Plantation Sdn Bhd [2017] MLJU 379, the Court should not take upon itself the responsibility of comparing the disputed signatures. 147 - The findings of the Court [117] Firstly, the Court accepts Zelim’s explanation for the non-lodgment of a police report or criminal complaint against the Plaintiff to date. In view of the multi-faceted issues in the dispute between the parties, it is reasonable for the Defendant to wait for the outcome of the Plaintiff’s suit and the Defendant’s counterclaim before deciding on the next course of action. [118] Secondly, the Court agrees with the Plaintiff that the Court should not take on the task of comparing the disputed signatures. However, the absence of evidence by a handwriting expert and the non-production of an expert report are not absolutely fatal to the Defendant’s attempt in justifying Statement 9. In respect of the Reference Letter, Lidiia was firm in her testimony in court that exhibit D224 is a false document and she did not sign the said letter and nor did her superiors asked her to sign the same. The reasons given were that (i) her name was spelt wrongly in the Reference Letter whereby the correct spelling should be ‘Lidiia’ instead of ‘Lidia’; (ii) she could not have signed the Reference 148 Letter because it was in English and she does not know English; and

(iii) as at the date of the Reference Letter, Alex, Marina and Skryabin have left the Defendant and the Defendant would not have prepared the references knowing that the references contained names of three of its ex-employees whilst she herself would not sign a Reference Letter with their names on it as it would be a lie. The “Order (Directive) for termination (cancellation) of the employment contract” for Alex was on 18.6.2013 (exhibit D170), for Marina was on 14.8.2014 (exhibit D171) and for Skryabin was on 24.3.2008 (exhibit D172), all well before the date of the Reference Letter. [119] In its Written Submission, the Plaintiff contended that “Although DW-3 denied issuing the said reference, but when asked her to compare the signature of Professor on the reference at Bundle B50 page 7584 (D224) to her signature on Minigalina R. Ya. leave application form at Bundle B62 page 8663 (D233), she agreed that it looks alike.” (emphasis added). This submission is errorenous because Lidiia’s cross-examination on this matter was premised on the Plaintiff’s position that the signature on exhibits D224 and D233 looks alike and 149 therefore Lidiia must have signed the Reference Letter. In any event, the Plaintiff’s contention is baseless when considered in the light of Lidiia’s unwavering evidence in court that the signature on the Reference Letter is not hers. [120] Moving next to the Certificates of Competence, Zelim in his testimony had given several reasons as to why the Defendant states that the Certificates have been forged and these are that –

the format of the Certificates does not tally with the certificates which are usually issued by the Defendant;

the surname of Prof. Vladimir, who was alleged to have signed the Certificates, was spelled wrongly in the Certificates where the correct spelling is “Shukhostanov” with the alphabet “h” in “Suk”;

the Malaysians named in the Certificates were not employees of the Defendant, have never been trained in PDT in Russia and 150 never been involved in any PDT inspections by the Defendant; and

at the bottom left of the Certificates, the word “Diatech” is stated whereas the company name is usually written as “SPC Diatech”. [121] The Plaintiff contended that the Certificates were issued by Prof. Vladimir during the Phase 1 period to which Zelim has no knowledge about. Since the Defendant failed to call Prof. Vladimir as a witness, the Plaintiff urged the Court to draw an adverse inference against the Defendant. However, Ms. Manjit is well aware that Ms. Cindy had, on several occasions throughout the trial, informed the Court that there was no certainty that Prof. Vladimir could travel to Malaysia for the trial due to his health condition and the possibility of his evidence being given via video conferencing was even discussed with the counsels. [122] On 22.1.2020, the Defendant tendered the Medical Record dated 24.12.2019 for Prof. Vladimir issued by The Federal State-Funded Budgetary Institution “Clinical Hospital” (exhibit D270) which confirms that the 77-year-old Prof. is facing serious health issues, among 151 others, chronic cerebral ischemia; stage 3 cerebrovascular disease; systemic axatia; pseudobulbar syndrome; vascular parkinsonism syndrome with oligokinesia and hypertonic-hypokinetic syndrome; and hypertension stage 3 of high risk. Based on the Medical Record, Prof. Vladimir is medically unfit to attend court in person or to give his evidence by remote communications technology. Ms. Cindy submitted the case authorities of Lau Song Seng & Ors v Public Prosecutor [1998] 1 SLR 663 for the proposition that an adverse inference is not mandatory but discretionary, having regard to the relevancy and materiality of a particular witness, and Welds (by his mother and litigation friend) v Yorkshire Ambulance Service NHS Trust and another 155 BMLR 101 and Re Coroin Ltd (No 2); McKillen v Misland (Cyprus) Investments Ltd and others [2013] 2 BCLC 583 that an adverse inference should not be drawn when there is a reasonable and credible explanation for a witness’s non-attendance at the trial. [123] I agree that no adverse inference should be drawn against the Defendant, nevertheless, as a matter of evidence, considering the fact that the Certificates of Competence were purportedly signed by Prof. 152 Vladimir and issued by the Defendant on 25.11.2013, which coincides with the period when Prof. Vladimir was the Director and shareholder of the Plaintiff and that, even if the Court accepts Zelim’s evidence that the reference to “CEO” in the said Letters means senior executives or senior management of the Defendant and includes Prof. Vladimir as the Vice President, the Court is not inclined to conclude that the Defendant has proven, on a balance of probabilities, that the Certificates were forged by the Plaintiff without hearing Prof. Vladimir’s narrative of the events surrounding the issuance of exhibit P135. [124] The Court holds the same view in respect of the 3 Invoices which were similarly issued during the Phase 1 period. The Plaintiff’s version is that Prof. Vladimir requested for payments to be made in cash and that Lidiia had testified that Prof. Vladimir’s designation is Vice President for Science and Technology and “STC Diatech” is the abbreviation for “Scientific Training Centre” (not “Scientific Testing Centre” as in the Plaintiff’s Written Submission) where Prof. Vladimir is also the Vice President. Since no evidence can be procured from Prof. Vladimir as to the issuance of the 3 Invoices, I am not prepared to hold that these 153 are forged documents of the Defendant. It has not escaped the Court’s attention that the Defendant’s submission is that “… the 3 Invoices were fabricated by the Plaintiff for purpose of the court proceedings.” [refer para 165.6, p 109 of the Defendant’s Written Submission (Vol. 1: Opposing Plaintiff’s Main Claim)]. However, the defence of justification must relate to Statement 9 i.e. that at the time when Zelim wrote the said Letters on 15.12.2016, the Defendant held the belief that “… in the implementation …” of the activities as stated in the said Letters, the Plaintiff had committed forgery etc. The court proceedings commenced only on 9.3.2017. [125] The same reasoning applies to the HATs Reports since the Defendant’s contention was that the cover pages to the Reports in exhibits P12, P14, P16, P18, P20, P22, P24, P26, P28 and P30 were signed by Ruzlan, backdated, and produced just one month before the trial started. [126] Turning now to the “Contract For Services – Phonon Specialist”, these were marked for identification only i.e. ID202 to ID206 following 154 the objection raised by Ms. Cindy. The Court would similarly not embark on an exercise of comparing the disputed signatures except where the person who had purportedly signed the document concerned is present in court as a witness. In this case, Ilia testified that he did not sign the “Contract For Services” ID206 and that the signature on that document is not his signature. Just like Lidiia, Ilia was also unshaken during cross-examination and maintained his testimony. It is observed that at the end of ID206, Ilia’s name is spelt as “Khoklov” instead of “Khokhlov”. Although Ms. Manjit applied for ID206 to be converted into the Plaintiff’s exhibit, Ms. Cindy objection on the ground that Ilia’s evidence confirms that the document is not authentic was allowed. Hence, at least one “Contract For Services”, which was signed by Hazim, was indeed forged by the Plaintiff. The fact that stamp duty was purportedly paid for ID206 does not change its status as a forged document. [127] Lastly, as to the section of Statement 9 which mentions “appropriation of money”, the Court is inclined to agree with the Defendant that it has adduced sufficient evidence to support a finding that the Plaintiff has 155 misappropriated monies from projects which the Plaintiff was contractually obligated to issue POs to the Defendant. [128] Clause 3 of the Agency Agreement governs the “Sale And Purchase Of The Products” in the following terms (with my added emphasis): “3.1 Principal shall quote prices of Products to Agent from time to time and subject to change of freight and production costs on the date of the relevant purchase order.

3.2 Agent shall issue a purchase order for Products to Principal from time to time (“P.O”). The volume, price, type and specification of Products, date of delivery and other details (if any) for Products shall be detailed in the P.O. Agent shall send P.O. to Principal by facsimile and send original P.O by courier service within three (3) days after the date of P.O.

3.2 Each P.O shall be subject to acceptance or rejection of Principal. The P.O shall be binding upon Principal after Principal accepts such P.O by sending performa invoice for such P.O to Agent within seven (7) days after receipt of relevant P.O (“Performa Invoice”). 156

3.3 The P.O accepted by Principal and Performa Invoice shall become a part of this Agreement. In case of any inconsistency between the terms of this Agreement, accepted P.O and Performa Invoice, Performa Invoice shall prevail to the extent of the inconsistency.

3.4 Products shall be delivered to Agent in accordance with terms and conditions specified in Performa Invoice.

3.5 The prices of Products to be sold in Malaysia shall be subject to mutual agreement of the parties in order to promote the sale and distribution of the Products in Malaysia.

3.6 Agent shall make payment to Principal for each Performa Invoice by means of Letter of Credit (LC) 100% upon Issuance Performa Invoice and before final shipment.

3.7 All expenses incurred in respect to LC, including bank charges shall be borne and paid by Agent.”. [129] Zulfaiz had produced a list containing information of 17 POs issued by PGB to the Plaintiff for the inspection services (exhibit D240) pursuant 157 to the LoA and Contract between PGB and the Plaintiff with a total value of RM23,189,403.02 and the amount claimed is RM20,635,706.90. During cross-examination, Datuk Fariz agreed that the Plaintiff did not give any PO under the contract for PGB to the Defendant. As for PCSB, Hazim also admitted that out of 7 POs before the Court where PCSB had given to the Plaintiff, the Plaintiff only gave 1 PO to the Defendant. As alluded to earlier, the Plaintiff’s “Financial Statements 31 December 2015” (exhibit P207) shows that the Plaintiff had a revenue of RM17,257,059.00 in 2014 and RM30,012,266.00 in

When confronted with these figures, Datuk Fariz admitted that the Plaintiff as the agent was earning much more than the Defendant as the principal for PDT projects in Malaysia. [130] The Defendant need not prove the truth of every word in Statement 9 and it suffices for the Defendant to prove, on a balance of probabilities, that Statement 9 is substantially true in material particular. In my opinion, the Defendant has discharged this burden in respect of the forgery of the Defendant’s document being the Reference Letter and Ilia’s Contract For Services and the appropriation of money. 158 Non-calling and credibility of witnesses [131] Before proceeding to discuss Issue 3, this would be an opportune time to briefly address the comprehensive submissions by each party on the non-calling of certain witness by the other party and the credibility of the witnesses who did testify in court.

Non-calling of Khosim In their evidence, Hazim and Datuk Fariz attempted to convince the Court that a certain arrangement or state of affairs existed during the period when Prof. Vladimir and Khosim had business dealings. Since Khosim was not included in the Plaintiff’s List of Witnesses, the Defendant had issued a subpoena but could not serve it on Khosim. In view of the Court’s assessment on the credibility of Hazim and Datuk Fariz as addressed below, it is incumbent on the Plaintiff to have secured Khosim’s attendance 159 as a witness at the trial. The presumption of adverse inference under s 114 illustration (g) of the EA 1950 for the failure to call Khosim to testify in court is invoked against the Plaintiff.

Non-calling of Nik Faiz, Khaled Bin Hamdan and Zaidi Md. Dom from PGB and Hafis Harif from Repsol Nik Faiz is the company representative in the PGB contract; Khaled is the person who is said to have requested the incorporation of the term “phonon” in the HATs report; and Zaidi is PGB’s staff engineer. Hafis was mentioned in para 68 above. The names of Nik Faiz, Khaled and Hafis were brought up by the Plaintiff during cross-examination in the context of the issue on Blanket Contract. The Court agrees with the Defendant that, in order to prove that the Plaintiff’s contentions are right, Nik Faiz, Khaled and Hafis are the persons who are material to the Plaintiff’s case and not the Defendant’s. If any adverse inference is to be drawn, it would thus be against the Plaintiff. 160 As for Zaidi, the Court was informed in the course of the trial that he would be present to give his evidence, however this did not turn out to be the case. Ms. Manjit said that Zaidi was involved in a turnaround exercise and could not leave the facility. Learned counsel did not attempt to persuade the Court on the importance of securing the attendance of Zaidi for the trial and to seek a postponement until he was able to come to court. The choice to close the Plaintiff’s case without Zaidi’s testimony was entirely the Plaintiff’s and/ or its counsel’s. Zaidi’s evidence would have shed light as to why the reports were stated as HATs instead of PDT. In addition, the Defendant’s lead counsel had skillfully extracted evidence from Ruzlan that the cover pages to the alleged HATs reports for PCSB were backdated and produced just one month before the trial started. In this regard, Zaidi who had signed the purported HATs reports for PGB, could have confirmed whether those reports were actually signed by him at the material time or otherwise. Since the Plaintiff did not call Zaidi to testify, an adverse inference is drawn against the Plaintiff. 161

Non-calling of Rizwan the lawyer and the private investigator From Zelim’s account of the facts, it can be gathered that Rizwan’s and the private investigator’s roles were basically to carry out investigations and gather evidence. The Plaintiff’s complaint against the Defendant for not calling them as witnesses was merely about the source of the Defendant’s documentary evidence. However, by the end of the trial, most of the documents were marked as exhibits. Therefore, the authenticity of the Defendant’s evidence is not an issue. Furthermore, any instructions received, and course of action taken, by Rizwan in his capacity as the Defendant’s solicitors would be subject to legal professional privilege. The Court holds that no adverse inference is drawn against the Defendant.

Non-calling of Alex, Marina and Skryabin It is apparent that the Court would be very much enlightened as to the events surrounding, among others, the Plaintiff’s 162 engagement of these phonon specialists at the material times; the issuance of the Employment Certificates, Curriculum Vitae and reference letters; the work that was performed for the Plaintiff’s customers without the Defendant’s knowledge; and the equipment that was collected from Moscow if these three Russian nationals had testified at the trial. The Plaintiff did not offer any explanation as to why they were not called as witnesses. Ms. Cindy cited the cases of Khaw Cheng Bok & Ors v Khaw Cheng Poon & Ors [1998] 3 MLJ 457; Jaafar bin Shaari & Anor (suing as administrator of the estate of Shofiah bte Ahmad, deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693; and AB Latef & Associates (M) Sdn Bhd v Govindasamy a/l Suppiah [2016] 5 MLJ 508 to support the proposition that these individuals are crucial to the Plaintiff’s narrative of the facts and by closing its case without having their evidence recorded, an adverse inference ought to be made against the Plaintiff who was in a position to adduce better evidence but deliberately abstained from doing so. The Court finds that there is merit in the Defendant’s submission and accordingly invokes the 163 presumption of adverse inference for the failure to call these three individuals to testify in court.

Credibility of Ruzlan Reference has been made earlier to the HATs Reports for PCSB (Sarawak Operations/ Oil) with the cover pages signed by Ruzlan (exhibits P12, P14, P16, P18, P20, P22, P24, P26, P28 and P30). The Defendant takes the position that there is ample evidence to support a finding that Ruzlan could not have signed these Reports and had given contradictory testimony for the following reasons:

In some of the Reports, the name of the authorised person stated is Pankyes Micheal Hirse but yet Ruzlan claimed that he signed the reports.

(ii) Ruzlan had explained that before 2016, the whole operations in Sarawak was under one company called 164 Sarawak Operations and thereafter, the said company was split into Sarawak Oil or Miri Crude Oil Terminal (‘MCOT’) and Sarawak Gas or Bintulu Crude Oil Terminal (‘BCOT’). At the material time, Ruzlan was overseeing BCOT only and he admitted that he could not be the authorised person to sign the reports for MCOT. However, the Reports in exhibits P18 and P22 which were signed by Ruzlan on 15.12.2016 and 5.7.2016, respectively are for MCOT. When confronted with this fact during cross-examination, Ruzlan then testified that, “It could be. The job originated from me when I was there [Sarawak Operations] and then it is in progress and then I moved to Bintulu and then after I moved, it could be like that. But I’m not sure lah because sometimes if they come bundles to me, I just sign.” (see NoE, Vol. 2 on 15.11.2018 at p 24).

(iii) Ruzlan admitted that he could not have signed the Reports exhibits P16, P24, P26 dan P30 in January and March 165 2016 and the PL 106 Report (exhibit P4) in September 2013 since BCOT was established only in April 2016.

(iv) In the e-mail from the Plaintiff to Ruzlan dated 16.12.2016 (exhibit D63), it was shown that the Plaintiff’s staff forwarded the Report (exhibit P18) to him on 16.12.2016 but Ruzlan signed the Report on 15.12.2016. Ruzlan agreed that it is illogical for him to have approved and signed the report one day earlier than the e-mail. When the Defendant’s counsel suggested that the Reports which use the term “HATs” and signed by him are forged documents, Ruzlan answered “I don’t know.” (see NoE, Vol. 2 on 15.11.2018 at p 28).

Ruzlan attempted to cover the discrepancies in his evidence by claiming that the Plaintiff would present its findings in PowerPoint format and after Ruzlan agrees, the Plaintiff will proceed to prepare the draft or final reports. 166 However, no such presentation slides were produced before the Court.

(vi) Ruzlan agreed that the services that were performed by the Plaintiff in 2016 were actually PDT.

(vii) Ruzlan admitted that he signed the Reports at the Plaintiff’s request and when it was suggested that he did so and backdated the Reports for the purpose of the court proceedings, he said, “I don’t know because it has been signed as when it is, I was asked to.”. Having heard and seen Ruzlan in court and in view of the matters as outlined above, it is my finding that his credibility has been shattered and he is not a truthful witness. 167

Credibility of Hazim The Defendant challenged Hazim’s credibility on the grounds, inter alia, that he had given contradictory evidence as to the first time that he met Zelim; the working visas for Alex and Marina; the methodology of PDT; alleged invention of HATs; the Double Wall Tank work (exhibit D184); and the complaints from Brunei Shell about the defects list in the PDT Report for Pipeline PID0324 (exhibit D3). Hazim was in the witness box for many days and to my observation, he was evasive and had a tendency of giving long-winded answers, which at times, were nonsensical and reached the stage where the Court had to remind him several times to answer the questions during cross-examination as asked. It was common for Hazim to say, “I don’t know”, “I can’t remember”, “I don’t recognize …” but when confronted with the documents, he was forced to admit the propositions that were put to him by the Defendant’s counsel, sometimes looking rather sheepishly. The 168 Defendant pointedly mentioned in the Written Reply Submission (Reply To Vol. 1: Preliminaries) at pp 13 - 14 about Hazim starting to stutter and mutter when responding to questions by Ms. Cindy regarding the purported complaints on PDT by customers. Overall, Hazim did not leave a good impression and as someone who has so much at stake in this suit, it is hardly surprising that his answers in court were suited to secure a verdict in favor of the Plaintiff. However, there were moments when his demeanor showed flashes of someone who bears the guilt of the past wrongdoings. His attempt to interfere with Syafiq (DW4; see subpara 258(b)(viii) below) puts a further stain on his credibility.

Credibility of Datuk Fariz The Defendant similarly highlighted several aspects of Datuk Fariz’s testimony that displayed discrepancies and his evasiveness (see the same Written Reply Submission at pp 55 - 169 62). Unlike Hazim who would more readily admit to the facts as suggested by the Defendant’s counsel when shown the documents, Datuk Fariz would maintain a confident composure even though some answers were just illogical and an attempt to cover the truth. As a whole, Datuk Fariz’s credibility is very much doubted.

Credibility of Praba It must be stressed at the outset that the Court has exercised caution in dealing with the evidence given by Praba since he was dismissed by Repsol following an audit and internal inquiry which led to the issuance of three charges against Praba in the show cause letter, one of which pertains to the contract between Talisman/ Repsol and the Plaintiff. During cross-examination, it was put to Praba that he had intentionally concealed the fact that the Agency Agreement had been terminated by the Defendant from the management of Repsol and he had continued to give work to the Plaintiff to perform purported PDT services. Praba 170 disagreed to this suggestion but he agreed that the unlawful dismissal suit which he had filed against Repsol was settled with payment by Repsol to him on the basis of there being no admission as to liability. Praba testified, among others, that he was surprised when he read the Defendant’s letter dated 15.12.2016 with the impugned statements because Repsol does not have any contractual relationship with the Defendant and the contents are strongly worded. Praba then checked with Repsol’s engineers as to whether they were any phonon related activity on their platforms and he also spoke to Hazim. However, the internal inquiry that was conducted into the Defendant’s complaints was carried out by the supply chain group since they received the complaint from Repsol’s headquarters in Spain. This part of Praba’s testimony is proven to be a lie since Hazim’s letter dated 15.3.2016 was addressed to Praba’s attention and conveyed that the Plaintiff would no longer be representing the Defendant and will not be offering PDT to Repsol (exhibit P38A). This clearly shows that 171 Praba is aware of the Defendant’s existence. Furthermore, there is a “Contractor’s Organisation Chart” in Appendix VII – 2.4 in the contract between Talisman and the Plaintiff (exhibit P105) where the words “Phonon Specialist Diatech Personnel” are written. The Defendant has included other examples where Praba’s testimony contradicts with that of the other Plaintiff’s witnesses and the frequent change in his evidence (see the Written Reply Submission at pp 48 - 50).

Credibility of Zelim The Plaintiff’s counsel had prepared a detailed analysis of the alleged inconsistencies in the evidence given by all the Defendant’s witnesses [refer Appendix 7(A) – (F) in the Executive Summary (Volume 2)] and cited the decisions in Eastern & Oriental Hotel (1951) Sdn Bhd V Ellarious George Fernandez & Anor [1989] 1 MLJ 35; Tenaga Nasional Bhd v Guan Heng Plastic Industries Sdn Bhd [2013] 7 MLJ 888; Abu 172 Bakar bin Pangis & Ors v Tung Cheong Sawmill Sdn Bhd & Ors [2014] 5 MLJ 384; Glove Kendall Limited & Anor v Maple Challenge Sdn Bhd & Ors and other suits [2016] MLJU 1452; Simpson Wong v Vas Car Auto Parts Sdn Bhd & Ors and another case [2017] MLJU 355; Mohd Shukri bin Mat (sebagai pentadbir harta pusaka Wan Mek binti Wan Abdullah@Wan Eshah bin Wan Abdullah) v Wan Rahmah binti Wan Abdullah (sebagai pentadbir harta pusaka Wan Abdullah bin Wan Ahmad) [2017] MLJU 2026; and Public Prosecutor v Hassan Jafarpour [2019] 5 MLJ 350 in urging the Court to reject their evidence. In so far as Zelim’s testimony is concerned, Ms. Manjit strongly argued that he is a self-serving witness and his evidence should be treated with great caution, if not disregarded altogether, since it was full of contradictions with contemporaneous documents; his own evidence throughout the trial; the evidence by Ilia and Lidiia; averments in the affidavits filed in court; and the conduct of the parties. 173 Contradictions in the evidence of a witness are not uncommon. It is unrealistic to expect any witness, who is after all mere mortal, to recall all events in the past with absolute clarity and precision and be able to describe these in an immaculate manner on each day that he or she is in the witness box. The fact that there are discrepancies in a witness’ testimony does not straight away make him an unreliable witness and render the whole of his evidence unacceptable (see Wan Yahya J (as he then was) in Pie Bin Chin v Public Prosecutor [1985] 1 MLJ 234 and quoted in Dato’ Seri Anwar bin Ibrahim v Public Prosecutor & another appeal [2004] 3 MLJ 405). In this case, the Court finds that despite the vigorous cross-examination, overall, the credibility of the Defendant’s witnesses remains intact and their account of the facts is supported by the documents which were marked as exhibits during the trial. Zelim was largely an enthusiastic witness; he was visibly keen to tell his side of the story and he strikes me as a sincere witness. 174 Whatever discrepancies in his evidence were sufficiently explained or clarified during the re-examination. Conclusion [132] As the diagnostic work for Talisman/ Repsol was not performed by the Defendant, it is irrefutable that the Plaintiff had used the Defendant’s name and the name of “PDT” to mislead Talisman/ Repsol into thinking that PDT services were provided, which is the statement in the said Letters. By not using the Defendant’s phonon specialists to perform diagnostic work, it is true that the Plaintiff has simulated inspections of infrastructure facilities using the PDT name although the Plaintiff does not possess the relevant knowledge or PDT trained technical staff. Furthermore, in an attempt to cover its tracks, the Plaintiff deviously changed the name of the diagnostic method from PTD to HATs. [133] With respect to the diagnostic work for PGB, there is ample evidence which proves that the Plaintiff had entered into the agreement with 175 PGB secretly and performed the so-called PDT services by hiring the former employees of the Defendant. The Plaintiff conducted itself in a manner to mislead PGB into believing that the inspection works were indeed performed by the Defendant. [134] For all the aforesaid reasons, the Court concludes that the Defendant has proven, on a balance of probabilities, that the impugned statements are true or substantially true in material particular. Issue 3: If Question 1 is answered in the affirmative, whether the Defendant could rely on the defence of fair comment? - The Plaintiff’s objection to the Defendant’s pleadings [135] The Plaintiff raised a similar objection in respect of the Defendant’s defence of fair comment in that the Defendant has failed to plead and particularise which are facts and which are comments as required under O. 78, r. 3(2) RoC 2012. 176 [136] Section 9 of the Defamation Act 1957 provides that: “In an action for libel or slander in respect of words consisting partly of allegations of fact and partly of expression of opinion, a defence of fair comment shall not fail by reason only that the truth of every allegation of fact is not proved if the expression of opinion is fair comment having regard to such of the facts alleged or referred to in the words complained of as are proved.”. [137] In Dato’ Dr Tan Chee Khuan v Chin Choong Seng @ Victor Chin [2011] 8 MLJ 608 at p 623 the High Court held that: “[27] … Whether pursuant to s 9 of the Defamation Act 1957 or the common law, to constitute fair comment, a distinction must first be drawn between an expression of opinion which if given fairly or constructively, comes within the ambit of fair comment and an assertion of facts which the defendant must prove or establish sufficiently to substantiate his comment basing on them to render it to be fair comment. For that matter, O 78 r 3(2) of the Rules of the High Court 1980 (RHC) requires the defendant to plead clearly the expression of opinion as distinct from the statement of facts that he relies on and they must be particularised. …”. 177 [138] I have earlier alluded to the gist of para 39 in the Statement of Defence and Counterclaim (refer para 53 above) wherein the Defendant had pleaded that the statements and/ or words in the said e-mail and said Letters are made, among others, on a matter of public interest. This is borne out from para 37 of the same pleading where the Defendant stated that the intention of the said Letters is to warn Repsol and Occidental as the Plaintiff’s conduct in, inter alia, using non-certified phonon specialists has caused or will cause a serious threat to industrial safety and very likely lead to incorrect data on the status of hazardous facilities. In para 38, the Defendant further pleaded that the said e-mail and said Letters were sent with the intention of preventing the Plaintiff from continuing to create a threat and risks of accidents, man-made disasters, industrial safety of industrial facilities which were allegedly diagnosed by phonon diagnostics as well as environmental threats to the regions where these industrial facilities are located. [139] Although the aspect of public interest has, to my mind, been sufficiently pleaded, the Defendant did not indicate which words in the impugned 178 statements in the said Letters consist of expressions of opinion. However, the Court accepts the Defendant’s submissions that the Plaintiff’s failure to object during the trial amounts to a waiver and that no prejudice is caused to the Plaintiff as there is no element of surprise in the light of the interlocutory injunction proceedings. - Elements of the defence of fair comment [140] The Defendant relied on the Privy Council decision in Joshua Benjamin Jeyaretnam v Goh Chok Tong [1989] 3 MLJ 1 in submitting that there are four elements to the defence, namely –

the words complained of are comment, though it may consist of or include inference of facts;

the comment is on a matter of public interest;

the comment is based on facts; and 179

the comment is one which a fair-minded person can honestly make on the facts proved. Each of these elements and the Plaintiff’s contentions will now be examined. The words complained of are comment and/ or inference of facts [141] It is settled law that a comment is a statement of opinion on facts truly stated: see the Court of Appeal decision in BRE Sdn Bhd & Ors v Tun Datuk Patinggi Hj Abdul Rahman Ya' Kub [2005] 3 MLJ 485. [142] In Joshua Benjamin Jeyaretnam v Goh Chok Tong [1989] 3 MLJ 1, Lord Ackner, in delivering the judgment of the Privy Council, referred to para 697 in Gatley on Libel and Slander (8th Ed) in the following passage at p 3 (emphasis is mine): 180 “… Comment is a statement of opinion on facts. It is comment to say that a certain act which a man has done is disgraceful or dishonourable; it is an allegation of fact to say he did the act so criticized … while a comment is usually a statement of opinion as to merits or demerits of conduct, an inference of fact may also be a comment. There are, in the cases, no clear definitions of what is comment. If a statement appears to be one of opinion or conclusion, it is capable of being comment. Of course, if a statement is capable of being comment, whether or not it is a comment or a statement of fact, must be a matter … for the judge, properly directing himself, to decide. … In their Lordships' judgment it was clearly open to the judge to take the view that the observations following the statement of facts were expressions of opinion or conclusions or inferences drawn from those facts and therefore capable of being comment. This being so, he was fully entitled to decide that these observations were ‘a comment and not a bare or naked statement of facts. It 181 contained the defendant's belief for his conclusions based on or drawn from certain facts’.”. [143] More recently, the Court of Appeal in Dato’ Seri Mohammad Nizar bin Jamaluddin (supra, at p 258) held that: “[50] The law on the defence of fair comment is that if a defendant can prove that the defamatory statement is an expression of opinion on a matter of public interest and not a statement of fact, he or she can rely on the defence of fair comment. The courts have said that whenever a matter is such as to affect people at large, so that they may be legitimately interested in, or concerned at, what is going on or what may happen to them or to others, then it is a matter of public interest on which everyone is entitled to make fair comment. [51] The comment must be based on true facts which are either contained in the publication or are sufficiently referred to. It is for the defendant to prove that the underlying facts are true. If he or she is unable to do so, then the defence will fail. As with justification, the defendant does not to have to prove the truth of every fact provided the comment was fair in relation to 182 those facts which are proved. However, fair in this context, does not mean reasonable, but rather, it signifies the absence of malice. The views expressed can be exaggerated, obstinate or prejudiced, provided they are honestly held. If the claimant can show that the publication was made maliciously, the defence of fair comment will not succeed.” (emphasis added). [144] Ms. Manjit argued that the defamatory statements in the said Letters are factual allegations made in the form of statements and not comments. The Defendant is also said to have failed to justify the allegations made in the said Letters. [145] However, the Court is persuaded by the Defendant’s submission that the words “We believe …” at the start of the 8th Statement and 9th Statement reflect the Defendant's expressions of opinion or belief for its conclusions drawn from the facts as set out in the earlier part of the said Letter. Having read the entire said Letters several times, the Court has no hesitation in concluding that the Defendant was making comments or inferences that the Plaintiff had committed forgery of the 183 Defendant’s documents and appropriation of money which may endanger industrial safety and that this fact, as discussed in the earlier section of this judgment, has been proven by the Defendant. [146] The first element of the defence of fair comment has thus been satisfied. The comment is on a matter of public interest [147] The Plaintiff contended that the defence of fair comment is bound to fail because the said Letters were not sent in the public interest but purely in the Defendant’s interest in order to secure business for itself and to divert the Plaintiff’s business and income to the Defendant. This was admitted by Zelim. Moreover, he had sent the said Letters only to Repsol and Occidental, and not to PCSB and PGB where the bulk of the Plaintiff’s services are rendered. Zelim’s excuse that he did not do so because the Plaintiff has good connections with Petronas, which 184 must be in reference to the fact that Hazim was once employed by Petronas, is testament that the Plaintiff is correct in its stance. [148] On the other hand, the Defendant asserted that the issue as to whether a matter is of public interest does not depend on who the Defendant chose to send the said Letters to, but rather on the subject matter of the comment itself. To the Defendant, the gist of the said Letters is intended to inform Repsol and Occidental about the use of the Defendant’s name and PDT by the Plaintiff, its former exclusive agent, to mislead clients. PDT is used mainly in the field of oil and gas where industrial safety is paramount and will be threatened if diagnostic works are not executed properly and not performed by certified specialists to identify the defects. [149] In my opinion, the evidence supports a finding that whilst the Defendant had its own interests at heart when the said e-mail and said Letters were sent, nevertheless, the Defendant was concurrently equally concerned with the risks posed to the assets of the oil and gas companies as a consequent of the Plaintiff’s acts. In quoting Zelim’s 185 answer to Question 27 in his Witness Statement as regards the issuance of the said Letters to Repsol and Occidental, viz “… I wanted to put on record to them what MRA had done and I do not want Diatech to be blamed if there is anything that happened in their projects as a result of MRA’s work. This issue is serious as it concerns industrial safety and ecology.”, the Plaintiff’s counsel omitted to place emphasis on the last sentence which represents the public interest element. [150] Even the slightest threat to industrial and environmental safety is of public interest. It is an agreed fact that PDT can only be performed using PDT equipment and PDT software owned and invented by the Defendant and by certified PDT specialist or engineers trained on PDT by the Defendant. In the foregoing analysis, this Court has set out the reasons for the conclusion that the Defendant has, on a balance of probabilities, proven the defence of justification in respect of the nine impugned statements in the said Letters, including the 4th Statement to 7th Statement. In the circumstances, there is no doubt in my mind that the comment is on a matter of public interest. 186 The comment is based on facts [151] To the Plaintiff, the Defendant has made baseless accusations in the said Letters which remained unproven at the end of the trial. For the Defendant, Ms. Cindy again cited the case of Joshua Benjamin Jeyaretnam (supra), this time relying on the following excerpt from p 3 of the report: “(iii) Was the comment based upon facts which the respondent established to be true? It is of course well established that a writer may not suggest or invent facts and then comment upon them, on the assumption that they are true. If the facts upon which the comment purports to be made do not exist, the defence of fair comment must fail. The commentator must get his basic facts right. The basic facts are those which go the pith and substance of the matter: see Cunningham-Howie v Dimbleby [1951] 1 KB 360, 364. They are the facts on which the comments are based or from which the inferences are drawn – as distinct 187 from the comments or inferences themselves. The commentator need not set out in his original article all the basic facts: see Kemsley v Foot [1952] AC 345 but he must get them right and be ready to prove them to be true; (per Lord Denning MR in London Artists Ltd v Littler.)”. [152] Following from the findings of the Court in respect of the defence of justification where the Defendant has proven the central facts to be true, it naturally follows that the comments made by the Defendant in the said Letters are based on facts. The comment is one which a fair-minded person can honestly make on the facts proved [153] In Joshua Benjamin Jeyaretnam (supra, at p 4), the esteemed panel referred to the test as adumbrated by Diplock J in Silkin v Beaverbrook Newspapers Ltd [1958] 1 WLR 743 in these words: 188 “… Could a fair-minded man, holding a strong view, holding perhaps an obstinate view, holding perhaps a prejudiced view – could a fair-minded man have been capable of writing this? ...”. [154] The Plaintiff obviously says, “No” on the ground that there is no proof that the diagnostic works performed by the Plaintiff was not performed correctly and/ or using non-certified phonon specialist and/ or non-phonon equipment. The Plaintiff’s consistent position is that it has never provided PDT without the Defendant’s involvement and it provided HATs. The Plaintiff claimed that there is no evidence that HATs exposes a threat to industrial safety. [155] Likewise, with the verdict on the defence of justification, among others that Hazim could not have invented HATs and that HATs is a term that was coined by the Plaintiff to enable it to continue to deceive the customers into believing that they were obtaining a phonon based diagnostic technology, the Plaintiff’s contentions as outlined above ring hollow indeed. 189 [156] In contrast, there is no valid reason for the Court to reject Zelim’s evidence, who in my observation is genuinely concerned on the need to ensure and maintain industrial safety at all times, that –

PDT is a diagnostic method used on pipelines, tanks, pressure vessels, furnaces, boilers and other industrial objects to determine technical conditions such as the presence of leaks and defects, and the remaining lifespan of a technical objects so that any necessary repair work can be recommended to prevent technical disasters;

a proper diagnostic method would provide reliable information and data to determine further operation conditions of a facility and thereby guaranteeing industrial safety; and

he wrote the said Letters to Repsol and Occidental since the Plaintiff was carrying out PDT without the Defendant’s involvement or knowledge whereby using the services of non-qualified and non-certified specialists or secretly employing the 190 Defendant’s former employees who were no longer certified as CS/E, using inappropriate and non-certified equipment and providing false and inaccurate reporting would jeopardise industrial safety at these companies. [157] Based on the facts as proven by the Defendant on a balance of probabilities, a fair-minded person would be capable of writing the said Letters in the manner as it was written by Zelim. Malicious intent [158] The Plaintiff vehemently argued that the said Letters were sent maliciously with a clear motive to injure its trading reputation and to pave the way for the Defendant to take over the Plaintiff’s business. The indicia of malice are said to be as follows: 191

Datuk Fariz merely requested for a document that the Plaintiff is no longer the Defendant’s agent but instead the Defendant issued the said Letters;

the said Letters were not sent in public interest but for the Defendant’s own commercial interests as admitted by Zelim;

Zelim purposely abstained from enquiring into the facts and from availing himself of the means to verify the information from the Plaintiff itself;

the absence of any police report or crime report prepared for investigation by the authorities as alleged in the said Letters; and

the Defendant did not take any legal action against the Plaintiff and merely filed a counterclaim in this suit. [159] Grounds (b) and (d) above have been dealt with earlier. As for ground

(a), Datuk Fariz had testified that Winner Inspection brought the 192 Defendant for the presentation on PDT and after the presentation, she told the Defendant that Repsol already had a contract with the Plaintiff for Phonon. When the Defendant informed her that the Plaintiff was no longer the Defendant’s agent, she checked the report and found “HATs” being mentioned. She then requested that the Defendant “… send me the black and white to show that MRA is no longer their agent so that I can bring this case to the Supply Chain Management and Legal. …”. Whilst it is true that the content of the said Letters was not limited to the matter as requested by Datuk Fariz, the Defendant’s inclusion of the other statements therein is defensible so as to provide an account of the Defendant’s Phonon method and the Plaintiff’s reprehensible conduct and its consequences. [160] Moving on to ground (c), that Zelim did not verify the information obtained from the lawyer Rizwan, which in turn was obtained from a private investigator, in re-examination Zelim explained that information was in fact received from various sources such as DW5, Ali Rasulov and Mr. Khotari in Oman. Zelim then compared all the information and 193 he came to the conclusion that there was a trend or pattern in the Plaintiff’s actions. [161] In so far as ground (e) is concerned, the said Letters to Repsol and Occidental are dated 15.12.2016 and 27.12.2016, respectively. The Plaintiff did not waste any time and had filed this suit by 9.3.2017. The Defendant responded by not only defending the suit but also filing its counterclaim comprising of assertions which it could have made by initiating its own suit if the Plaintiff had not already begun the court proceedings. It is well recognised that a counterclaim is a separate and independent action by the Defendant, which the law allows to be joined to the Plaintiff’s action in order to avoid multiplicity or circuitry of suits: see O. 15, r. 2 RoC 2012. The Plaintiff’s contention is thus plainly flawed. [162] It must be added that the facts in this case is distinguishable from the facts in Tjanting Handicraft Sdn Bhd & Anor v. Utusan Melayu (Malaysia) Sdn Bhd & Ors [2001] 3 CLJ 571, being one of the case authorities cited by Ms. Manjit. In that case, the High Court held, inter 194 alia, that the defendants’ choice of words was inspired by malice because they far exceeded the realm of fair and just criticism. The language used was so extreme that no fair-minded person however obstinate and prejudiced his views were would have honestly used them. Furthermore, the defendants published the criticism with reckless indifference as to whether they were true or not, which is certainly not the finding of the Court in the instant case. The Defendant had conducted its own investigations and gathered whatever information and documents that it could and once satisfied with the truth of the matter as reflected in the impugned statements, it then sent the said e-mail and said Letters to Repsol and Occidental. [163] In sum, although the said Letters contain serious allegations but as discussed in the preceding paras, the Defendant is justified in doing so. The Court agrees with the Defendant that the said Letters were not sent with malice, but instead to provide a concise narration of the Plaintiff’s wrongdoings in order to protect the Defendant’s name and reputation as well as to warn the customers of the risks posed to them as a result of the Plaintiff’s dishonorable conduct. 195 Issue 4: Whether the Defendant has committed the tort of inducement of breach of existing contracts between the Plaintiff and Repsol and Plaintiff and Occidental? Issue 5: Whether the Defendant has committed the tort of unlawful interference of business and tort of intentional interference with prospective economic advantage? [164] At the outset, it is observed that in its Written Submission, the Plaintiff had addressed both these issues together and even though the elements in respect of each cause of action were set out with reference to case law, the subsequent analysis of the evidence and arguments were skewed towards the tort of unlawful interference with trade or business. - Tort of inducing a breach of contract [165] In Loh Holdings Sdn Bhd v Peglin Development Sdn Bhd & Anor [1984] 2 MLJ 105, the Federal Court referred to a passage in Greig v Insole 196 [1978] 1 WLR 302 which summarises the elements of this tort as follows: “At common law it constitutes a tort for a third person deliberately to interfere in the execution of a valid contract which has been concluded between two or more other parties, if five conditions are fulfilled: First. there must be (a) "direct" interference or (b) "indirect" interference coupled with the use of unlawful means; see per Lord Denning M.R. in Torquay Hotel Company Ltd. V. Cousins [1969] 2 Ch. 106, 138. As to the meaning of "interference" this is not confined to the actual procurement or inducement of a breach of contract: it can cover a case where the third person prevents or hinders one party from performing his duties even though this be not a breach. Secondly, the defendant must be shown to have knowledge of the relevant contract. Thirdly, he must be shown to have had the intent to interfere with it. 197 Fourthly, in bringing an action, other than a quia timet action the plaintiff must show that he has suffered special damage, that is more than nominal damage; see Rookes v Barnard [1964] A.C. 1129, 1212, per Lord Devlin. In any quia timet action, the plaintiff must show the likelihood of damage to him resulting if the act of interference is successful; Emerald Construction Company Limited v. Lowthian [1966] 1 W.L.R. 691, 703, per Diplock L.J. Fifthly, so far as it is necessary the plaintiff must successfully rebut any defence based on justification which the defendant may put forward.”. (see too, the High Court decision in Lionex (M) Sdn Bhd v Allen Lim Lai Wah & Ors [2016] MLJU 967 as cited by the Defendant’s counsel). [166] The Plaintiff referred to Hazim’s and Praba’s evidence in submitting that the Defendant induced Repsol to breach its contract with the Plaintiff by not giving any further job orders to the Plaintiff after the said e-mail and said Letters were sent. At the material time, the project value performed by the Plaintiff was RM6,812,626.60 out of the total 198 approved contract value of RM10 million, hence leaving a balance contract value of RM3,187,373.40, which the Plaintiff claims is its financial loss. [167] Relying on Loh Holdings (supra), Ms. Manjit submitted that the Plaintiff need not prove special damages in a quia timet action and instead, proof of the likelihood of damage to the Plaintiff is sufficient. [168] The Court has deliberated on the matter and is in agreement with the Defendant that the Plaintiff’s case falls short of the legal requirements due to the following reasons:

actual breach of contract is the “gist of the action” for inducement for breach of contract (see Allen v Flood [1898] AC 1). However, the Plaintiff did not adduce any evidence to show that Repsol and/ or Occidental had breached the contract with the Plaintiff. Datuk Fariz himself admitted that it is the prerogative of these companies to decide what work to give to the Plaintiff through the PO or Release Order despite the contract that the Plaintiff has 199 with them [see Article 2 on “Release Order” in the Contract between Talisman and the Plaintiff (exhibit P105)]). Datuk Fariz had illustrated this point in the following manner: “… even though we have a contract, let’s say tomorrow I win a contract, 200 million let’s say, we have contract for three years. It’s not compulsory for Petronas to complete 200 million. In three years maybe they complete 60 million. That is 60 million. It’s yours, that is for you. Even though you were given the name numbers 200 million, let’s say. But they will give you only 60 million for three years. You cannot complain why didn’t get 200 million, you cannot.... So this is what the common practice happen in oil and gas industry.”. Ms. Cindy went further by calculating the percentage of unutilised allocation based on the above excerpt in submitting that it is not uncommon for there to be over 70% unutilised allocation. As such, the unutilised allocation for Repsol would be a mere 30% and the Plaintiff has not shown that Repsol has deviated from the common practice. In any event, the Plaintiff’s contention that the Contract with Talisman/ Repsol belongs to the Plaintiff and is for 200 the Plaintiff’s benefit is unfounded. This will be further elaborated in respect of the issues under the other tortious action; and

the Plaintiff did not plead that it has suffered any special damages from the alleged breach. It is trite law that special damages must be specifically pleaded (see Shen & Sons Sdn Bhd v Jutawarna Development Sdn Bhd & Ors [2016] 7 MLJ 183) and failure to do so is fatal to the Plaintiff’s claim. - Tort of unlawful interference with trade or business [169] The High Court in Megnaway Enterprise Sdn Bhd v Soon Lian Hock (sole proprietor of the firm Performance Audio & Car Accessories Enterprise) [2009] 3 MLJ 525 at pp 537 - 538, had conveniently set out the following elements in respect of this tort:

interference with the plaintiff’s trade or business;

unlawful means; 201

intention to injure the plaintiff; and

the plaintiff is injured thereby. (see too, the High Court decision in H & R Johnson (Malaysia) Bhd v H & R Johnson Tiles Limited & Anor [1995] 2 AMR 1390 and Worldwide Rota Dies Sdn Bhd v Ronald Ong Cheow Joon [2010] 8 MLJ 297]. [170] Upon consideration of the pleadings filed, evidence presented and submissions made by the parties, the Court finds that the Plaintiff has not discharged the burden of proving the elements of this tort, on a balance of probabilities, for the following reasons:

Interference with the Plaintiff’s trade or business Apart from the said Letters, the Plaintiff relied on the contents of the said e-mail (exhibit P104, see para 39 above) in contending that, when read as a whole, the said e-mail shows the Defendant’s intention to interfere with the Plaintiff’s existing three year contract with Repsol so that Repsol cancels the existing 202 contract with the Plaintiff and ceases to use the Plaintiff’s services and the Defendant can divert and take over the contracts and projects from the Plaintiff and subsequently gain profits. The words “We sincerely hope that soon this problem will be solved favorably.” coupled with the Defendant’s request for an opportunity to present PDT are said to show the Defendant’s intention for the purported problem to be resolved in a manner which will monetarily benefit the Defendant. There is an obvious flaw to the Plaintiff’s stance, and it is this: there can be no interference with the Plaintiff’s trade or business when its contracts with Repsol and Occidental are not even the Plaintiff’s contracts in the first place. The contract with Repsol was entered on 15.7.2015 (exhibit P105) which was during the Plaintiff’s tenure as the Defendant’s agent. The relevant excerpts from the Exclusive Agency Agreement between the parties dated 31.3.2013 are shown below: “… 203

APPOINTMENT OF AGENCY 204

1.1 Principal agrees to appoint Agent for selling the Services in Malaysia, and Agent accepts such appointment.

1.2 The rights and obligations of Agent will be subject to the terms and conditions specified hereunder.

2.

PARTIES 1 Agent shall use its best efforts to continuously promote and expand sale of Services in Malaysia, and enhance reputation and goodwill of Products in Malaysia.

2.2 Agent agrees to sell only the Services only to the customers in Malaysia.

2.3 Agent shall be responsible for any permit or license necessary for sale and distribution of the Products and Services in Malaysia.

2.4 Agent shall indemnify and hold Principal harmless against any claims, compensation, damages, losses and whatsoever incurred in connection with the permit or license required under the laws of Malaysia as well as the sale and distribution of the Products and Services in Malaysia. 205 …”. It is crystal clear that under the Agency Agreement, the Plaintiff is obliged to promote and sell only PDT to customers in Malaysia. The Plaintiff’s contract with Repsol was therefore executed pursuant to the Plaintiff’s obligation under, inter alia, Clauses 2.1 and 2.2 of the Agency Agreement to expand the customer base of PDT and was entered into on behalf of the Defendant and Repsol. Acceptance of the Plaintiff’s submissions would be at odds with the fundamental legal principles that, as the Defendant’s agent (i) the Plaintiff cannot claim the contract with Repsol as its own; and (ii) the Plaintiff owes a fiduciary duty to the Defendant as its principal and this includes a strict duty not to usurp the benefit of the contract with Repsol to profit itself and not to put itself in a position where its profit and its duty are in conflict (see R v Hopkins And Another [1915] 20 C.L.R. 464; Guy Neale and others v Nine Squares Pty Ltd [2014] SGCA 64; The Board of Trustees of the Sabah Foundation & Ors v Datuk Syed Kechik bin Syed Mohamed & Anor [1999] 6 MLJ 497; Gurbachan 206 Singh Bagawan Singh & Ors v. Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719; and Lee Hark Lam & Ors v Kebun Rimau Sdn Bhd & Anor [2016] 6 MLJ 751). The response by Repsol’s personnel upon being informed of the termination of the Agency Agreement speaks volumes of how the company placed great consideration to the fact that the Defendant is the Plaintiff’s principal in the provision of PDT services. Ms. Sim’s reaction has been discussed earlier. Another relevant piece of evidence is the fact that its headquarters in Madrid proceeded to carry out an audit on the contract with the Plaintiff in 2017 and commissioned its security team from Madrid to interview the relevant personnel and evaluate the evidence. This eventually led to the issuance of show cause letters to Praba and his dismissal. A pertinent point was also raised by the Defendant as to the Plaintiff’s approach to its case where it is plainly obvious that the Plaintiff was cherry-picking as to when it claims to be the agent of the Defendant or otherwise. When it is not in its favor, the 207 Plaintiff seeks to treat itself not as an agent and thus entitling it to claim any contract with the customer as its own and depriving the Defendant of the benefit of the same. On the other hand, when it is in its favor, the Plaintiff treats itself as an agent and invokes s 158 of the Contracts Act 1950 [Act 136] (‘CA 1950’) against the Defendant and cries termination of agency without sufficient cause. It seems to me that the Plaintiff’s disgraceful conduct has spilled into the trial. It is therefore without any hesitation, I hold that the Plaintiff has not proven the first element of this tort.

Unlawful means The Plaintiff claimed that the Defendant is not at liberty to contact, and make false representations to, the Plaintiff’s customers; defame the Plaintiff; and thereafter offer to make presentations on PDT technology. 208 The short answer to the above allegations is that, with the defence of justification and fair comment having been successfully proven, the issuance of the said Letters, in particular to Repsol, cannot amount to unlawful means since it is not defamation. As regards Ms. Manjit’s submission that an actual breach of contract need not be shown as laid down in the judgment by Lord Denning MR in Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106 and cited in H & R Johnson (supra) viz.: “If one person deliberately interferes with the trade or business of another, and does so by unlawful means, that is, by an act which he is not at liberty to commit, then he is acting unlawfully, even though he does not procure or induce any actual breach of contract.”, Ms. Cindy has correctly pointed out that it is no longer good law. The House of Lords in OBG Ltd v Allan [2008] 1 AC 1 discussed 209 the “unified theory” of the economic torts of intentionally inducing a breach of contract and inflicting harm by unlawful means as propounded by their predecessors and concluded that the two torts are essentially different and that the distinction should be maintained. In other words, the “unified theory” was rejected. Lord Nicholls of Birkenhead extrapolated that: “172 Thus understood, the rationale and the ingredients of the “inducement” tort differ from those of the “unlawful interference” tort. With the inducement tort the defendant is responsible for the third party’s breach of contract which he procured. In that circumstance this tort provides a claimant with an additional cause of action. The third party who breached his contract is liable for breach of contract. The person who persuaded him to break his contract is also liable, in his case in tort. Hence this tort is an example of civil liability which is secondary in the sense that it is secondary, or supplemental, to that of the third party who committed a breach of his contract. It is a form of accessory liability. 173 This form of liability is to be contrasted with the tort of unlawful interference. This is a "stand-alone" tort of wide scope, imposing primary liability on a defendant 210 for his own conduct, irrespective of whether on the facts anyone else may also be liable, either in contract or in tort. On this I agree with Philip Sales and Daniel Stilitz in their stimulating article “Intentional Infliction of Harm by Unlawful Means” (1999) 115 LQR 411, 433.”, while Lord Hoffmann reasoned as follows: “44 Finally, what counts as a breach of contract? In Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106, 138 Lord Denning said that there could be liability for preventing or hindering performance of the contract on the same principle as liability for procuring a breach. This dictum was approved by Lord Diplock in Merkur Island Shipping Corpn v Laughton [1983] 2 AC 570, 607-608. One could therefore have liability for interference with contractual relations even though the contracting party committed no breach. But these remarks were made in the context of the unifed theory which treated procuring a breach as part of the same tort as causing loss by unlawful means. If the torts are to be separated, then I think that one cannot be liable for inducing a breach unless there has been a breach. No secondary liability without primary liability. Cases in which interference with contractual relations has been treated as coming within 211 the Lumley v Gye tort (like Dimbleby & Sons Ltd v National Union of Journalists [1984] 1 WLR 67 and [1984] 1 WLR 427) are really cases of causing loss by unlawful means.” (emphasis added). OBG’s case was referred by the High Court in Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v Intrared Sdn Bhd & Anor [2013] 7 MLJ 437 for the explication on the element of the defendant’s intention to harm the plaintiff.

Intention to injure the Plaintiff The Plaintiff maintained that the said e-mail and said Letters were sent by the Defendant with an intention to injure the Plaintiff. The views of the Court as expressed in relation to the issues as to whether the comment is on a matter of public interest and whether there is malicious intent under the defence of fair comment are applicable here. Basically, the Defendant wanted to disassociate itself from the Plaintiff and to warn Repsol of the 212 possibility that the Plaintiff’s actions may have jeopardised industrial and environmental safety. It must also be highlighted that the Plaintiff’s contention that the said e-mail (exhibit P104) contains a request by the Defendant “for an opportunity to present PTD” is inaccurate because Ms. Sim and Zelim had testified that Zelim had presented on PTD to Repsol in October 2016 which is before the said e-mail and said Letters were sent. In fact, that was how Zelim came to know about the contract between the Plaintiff and Repsol. What Zelim stated in exhibit P104 was that additional information regarding the Defendant and its rights to PTD would be made available to Repsol if so requested. The Court holds that this mental ingredient for the tort was not fulfilled. 213

Injury to the Plaintiff As mentioned earlier, the Plaintiff submitted that Hazim’s and Zelim’s evidence in court supports a finding that the Plaintiff was injuriously affected to the tune of RM3,187,373.40 which is the balance of the amount allocated by Repsol to the contract but was not utilised when Repsol ceased to give any more work to the Plaintiff. However, the Court remains unconvinced by the Plaintiff’s arguments for the same reasons as before. Moreover, Ms. Cindy referred to Lexis Nexis Words, Phrases & Maxims which gave this explanation for “Damage And Loss”: “A synonym of ‘damage’ when applied to a person sustaining an injury, is ‘loss’. Loss is the generic term. Damage is a species of loss. ‘Damage’ signifies the thing taken away - the lost thing which a party is entitled to have restored to him, so that he may be made the whole again.”. 214 As aptly described by learned counsel for the Defendant, “Since the Plaintiff did not possess the entitlement or right to the whole of the allocation sum to begin with, the Plaintiff cannot be heard to say that it has suffered damage by reason of the 30% unutilised allocation. … In short, the Defendant cannot take away from the Plaintiff what the Plaintiff did not possess in the first place; and the Plaintiff cannot claim to have lost something that never belonged to itself.”. Lest it be forgotten, no injury was pleaded by the Plaintiff at all. [171] In view of all the aforesaid considerations, the Plaintiff’s causes of action premised on the tort of inducement of breach of contract and tort of unlawful interference with trade or business are unmeritorious. 215 Issue 6: Whether the Plaintiff is entitled to the reliefs sought? [172] Based on the foregoing discussion of the issues, the Court has found that the Plaintiff has failed to prove its causes of action. Hence, the answer to the question posed above must be in the negative. Issue 7: Whether the Plaintiff had breached the Agency Agreement? - Oral evidence to prove the terms of the Appointment Letters [173] The Plaintiff’s appointment as the Defendant’s exclusive agent in Malaysia, Brunei, Indonesia, Thailand, Turkmenistan, Sultanate of Oman and South East Asia (exhibits P72 to P77) is one of the agreed facts. According to the Defendant, the terms in exhibit P73 governing the Malaysia sector apply to the Appointment Letters in exhibits P74 to P77 as well because these Letters are very brief and were not intended to express the entire agreement between the parties. In these circumstances, it was submitted with reference to the case of Quality Concrete Holdings Bhd v Classic Gypsum Manufacturing Sdn Bhd & Ors [2012] 2 MLJ 521 that extrinsic evidence in the form of oral 216 evidence by Zelim is admissible to prove the other terms which had been agreed upon. The Defendant urged the Court to read the Appointment Letters in conjunction with the Agency Agreement. [174] The Plaintiff disagreed with the Defendant’s propositions on the grounds that –

the Appointment Letters for other jurisdictions do not make any reference at all to the Agency Agreement;

the evidence being relied upon by the Defendant arose during the re-examination of Zelim and was not put to any of the Plaintiff’s witnesses and was not mentioned by any other Defendant’s witnesses;

any oral evidence to be admitted should have been adduced through Prof. Vladimir who had signed the Agency Agreement; 217

sections 91 and 92 of the EA 1950 excludes admission of oral evidence to modify a written contract for the purpose of adding to the terms of a written agreement; and

the Court should only be concerned to discover what the instrument means and has no power to improve upon the Appointment Letters and nor can it introduce terms to make them fairer or more reasonable (Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 which cited with approval the case of Attorney General of Belize v Belize Telecom Limited [2009] UKPC 11 referred). [175] Upon scrutiny of the NoE, I find that Zelim’s evidence as quoted by Ms. Cindy (and underlined in the excerpt below) came about in the course of re-examination where learned counsel for the Defendant sought an explanation from Zelim as to his answers during cross-examination when he said that “We have agency agreement for Malaysia which is the main base document.” and “All the Appointment Letters are 218 secondary to the Agency Agreement. The Letters of Appointment have to be in line with Agency Agreement.”. Zelim clarified (see NoE, Vol. 18 on 21.1.2020 at pp 69 - 70) that: “Agency Agreement for Malaysia is a complete document and it was the first document we signed with MRA … All other agreements or appointments as an exclusive agent were done in a form of letter of appointment. … these letters are short. They have much less information. So … when we put these letters together we still refer to the Agency Agreement for Malaysia being a complete and detailed document. … Because there are also agent appointments. So there's also exclusivity clause there. Agency Agreement for Malaysia gives a very detailed explanation of all the terms, when it comes to exclusive agency agreement. And other letters of appointment are also referring to exclusive agent appointment. So, since the appointment letters do not give enough information, we refer back to Agency Agreement to understand what is meant by exclusivity.”. [176] Section 91 of the EA 1950 stipulates that when the terms of a contract have been reduced to the form of a document, no evidence shall be 219 given in proof of the terms of the contract, except the document itself. Section 92 provides that when the terms of any such contract have been proved according to section 91, no evidence of any oral agreement shall be admitted as between the parties to any such instrument for the purpose of, inter alia, varying or adding to, its terms except that the existence of any separate oral agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and the court shall have regard to the degree of formality of the document [refer proviso (b)]. [177] The Defendant submitted that the Appointment Letters do not contain the entire agreement and embodies only bare minimum statements as to the Plaintiff’s appointment and yet, the transactions secured by virtue of the Appointment Letters may give rise to transactions worth millions of Ringgit. Whilst it is obvious that the Appointment Letters contain brief terms, the Defendant’s attempt to prove that the entire terms of the Agency Agreement are applicable to the Appointment Letters by relying solely on Zelim’s evidence during re-examination cannot be allowed when the matter was not put to Hazim and Zelim so 220 that they may give their version of the conventional basis on which they had conducted their affairs. [178] However, in my opinion, a plain reading of the contents of the Appointment Letters in exhibits P74 to P77 show that the appointment of the Plaintiff as the Defendant’s “exclusive agent” entails the obligation on the part of the Plaintiff to promote the Defendant’s product namely, PDT to the exclusion of all other products in the territories as stipulated in the Letters. The Appointment Letters begin with a standard sentence stating that “We, Diatech hereby confirm that your company, MRA … has been appointed as our EXCLUSIVE AGENT in the territory of … for our product as follows:”. The product is PDT and the 28 items of diagnostics, inspection, services and surveys provided are then listed. Hence, it can be implied that, as the Defendant’s agent, the Plaintiff is not allowed to sell diagnostic service which is in competition with PDT. This is consonant with the fiduciary duty owed by the Plaintiff to the Defendant as its principal including the “no conflict rule” as indicated earlier. 221 - Breach of the Agency Agreement [179] Clause 2.2 of the Agency Agreement expressly provides that the Plaintiff agrees to sell only the PDT services to the customers in Malaysia. Hazim testified that HATs and PDT are both diagnostic and inspection technologies having relatively similar functions i.e. to determine the technical conditions of, and the presence of leaks and defects in, industrial assets. Datuk Fariz admitted that the Plaintiff is fully aware that it should not be promoting another technology in competition with PDT. So, while it is true that the Plaintiff can provide other diagnostic services than PDT as submitted by Ms. Manjit, it is certainly not permissible for the Plaintiff to promote HATs as an “enhanced version” of PDT capable of performing the same function. By selling and promoting HATs, the Court has no hesitation in concluding that the Plaintiff has breached the Agency Agreement. [180] Further, by way of Clause 7.3 of the Agency Agreement, the Plaintiff shall not assign any, and all, of its rights or obligations under the 222 Agreement to any third party without prior written consent from the Defendant. The Defendant submitted that the evidence has established that the Plaintiff had appointed the following third parties as agent for the following countries:

BISCO for Saudi Arabia pursuant to the “Phonon Diagnostic Technology Agency Agreement” dated 10.6.2015 (exhibit P220);

Berk Hill for Turkmenistan pursuant to the “Phonon Diagnostic Technology Agency Agreement” dated 1.6.2015 (exhibit P221);

Velosi for Vietnam; and

Vanguard for Oman pursuant to the “Contract Agreement for Phonon Diagnostic Technology” between the Plaintiff and Vanguard dated 29.6.2016 (exhibit D187). [181] On the other hand, the Plaintiff contended that it appointed the above-mentioned parties as joint business partners to promote PTD in the 223 respective countries. There was no assignment of the Plaintiff’s rights or obligations under the Agency Agreement and thus, there is no breach of the same, so goes the argument. The Plaintiff additionally posited that the Defendant’s denial of any knowledge on the aforesaid appointments is unbelievable for the following reasons:

Ilia’s evidence that he prepared the “Report Studies For Provision Of Reliability Study Utilizing Phonon Diagnostic Technology For Pipeline PID0089” for Brunei Shell (exhibit P82) where BEST Integrated Engineer Solution & Supplies Sdn Bhd (‘BEST’) is the local agent;

the PO dated 10.9.2014 issued by Datuk Fariz to Zelim for PDT services for Petronas Turkmenistan (exhibit D179);

Zelim’s evidence that the Defendant had done two projects for Sharq in Saudi Arabia and the corresponding technical reports dated 31.12.2014 (exhibits P85 and P86) which show Bisco’s involvement in the said projects; and 224

the purported private investigator somehow knew where to obtain the agreements in exhibits P220, P221 and D187. [182] The ground relating to Ilia’s testimony can be dealt with swiftly. I have perused the NoE, Vol. 9 and I find that although Ilia admitted to being involved in the project for Brunei Shell including the preparation of the report, he also said that the front page to exhibit P82 has been replaced and some information therein has been amended or replaced. Ilia was unshaken in his evidence and appears to me to be a truthful witness. Zelim had also testified that BEST has no business relationship with the Defendant and that the Defendant would not put BEST’s logo on the report. Moreover, there are no signatures or initials of the Defendant’s employees on the cover of the report. It can thus be safely concluded that exhibit P82 is not the final version of the report which was prepared by the Defendant. [183] As for the second ground, the Plaintiff has failed to show the nexus between the issuance of the PO for PDT services for Petronas 225 Turkmenistan with the alleged knowledge by the Defendant of the Plaintiff’s agreement with Berk Hill. [184] Moving to the third ground, when re-examined, Zelim testified that the Defendant had carried out PDT works for one complimentary project for Sharq involving two objects, a tank and a column. Being a complimentary project, no PO was issued. However, Zelim denied that exhibits P85 and P86 are the reports prepared by the Defendant for the project because these are not signed or initialed by its employees. The Plaintiff has similarly failed to show the linkage between these reports with the alleged knowledge by the Defendant of the Plaintiff’s agreement with Bisco. [185] The final ground which questioned the private investigator’s ability in discovering the agreements is purely speculative and not founded on any credible evidence. [186] In view of all of the above, the Defendant has correctly submitted that not a shred of evidence was produced by the Plaintiff to support its 226 contention that the Defendant had knowledge about the appointment of local partners in other jurisdictions to promote PDT and had agreed to the same. If the Plaintiff had indeed informed the Defendant of this matter and obtained the Defendant’s consent, there would surely have been some correspondence to that effect. However, none was ever produced during the trial. [187] By virtue of Clause 1.1 in the PDT Agency Agreements entered into by the Plaintiff with Bisco (exhibit P220) and Berk Hill (exhibit P221), the Plaintiff had appointed Bisco and Berk Hill, respectively, as a joint business partner to promote, market and solicit bids, orders or contracts from customers for the provision of PDT services by the Plaintiff and Bisco/ Berk Hill as agent in the Kingdom of Saudi Arabia/ Turkmenistan. The duration of both agreements is for 60 months. The Plaintiff asserted that it needed to appoint the local partners as a means of securing projects from the oil and gas companies. However, as highlighted by the Defendant, there is no provision in the Agency Agreement which allows the Plaintiff to enter into such agreements on its own. In so far as Saudi Arabia, the Plaintiff was not even appointed 227 as an agent there by the Defendant and so the Plaintiff has no valid reason to be dealing with Bisco in Saudi Arabia in the manner that it did. The Court is satisfied that the Defendant has proven, on a balance of probabilities, that the Plaintiff has breached the Agency Agreement by entering into agreements in respect of the Defendant’s PDT with other parties without the consent of the Defendant. - Is Clause 7.2 of the Agency Agreement void? [188] The Plaintiff submitted that pursuant to Clause 7.2 of the Agency Agreement, both parties agreed not to claim for any damages arising from the breach of Agency Agreement. The entire Clause 7.2 reads: “In no event shall either party be liable to the other party for indirect, special or consequential damages or for loss of anticipated profits on any claims of any kind resulting from any performance, non-performance, or breach of this Agreement.”. 228 [189] The Defendant takes the position that Clause 7.2 is void pursuant to s 29 CA 1950 which provides that: “Agreements in restraint of legal proceedings void

Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent.”. [190] In CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1, the issue before the apex court was whether clause 12 of the loan agreement which was executed by the parties offends s 29 CA 1950. The said clause 12 reads: “Liability Notwithstanding anything to the contrary, in no event will the measure of damages payable by the Bank to the Borrower for any loss or damage incurred by the Borrower include, nor will the Bank be liable for, any amounts for loss of income or profit or savings, or any indirect, incidental consequential 229 exemplary punitive or special damages of the Borrower, even if the Bank had been advised of the possibility of such loss or damages in advance, and all such loss and damages are expressly disclaimed.”. [191] Balia Yusof FCJ in delivering the judgment of the Court held that: “[37] We agree with the Court of Appeal when it opined that it is not right to think that a right can be dissociated from remedy and as can be clearly demonstrated by the instant appeal, where despite the finding that there is a breach by the bank, if cl 12 of the loan agreement is allowed, it would be an exercise in futility for the plaintiffs to file any suit against it. The plaintiffs are precluded from claiming the remedies against the bank. Clause 12 of the loan agreement negates the rights of the plaintiffs to a suit for damages, and the kind of damages as spelt out in the said clause encompasses and covers all forms of damages under a suit for breach of contract or negligence. There is an absolute restriction. Section 29 of the Contracts Act 1950 prohibits such restriction.” (emphasis added). 230 [192] Based on the above authority, this Court holds that Clause 7.1 of the Agency Agreement, which stipulates that “In no event shall either party be liable …”, has the effect of precluding the Defendant from claiming remedies against the Plaintiff and is therefore void and prohibited by s 29 CA 1950. The natural consequence is that the Plaintiff can be, and is, liable for any damages or losses resulting from breach of the Agency Agreement. Issue 8: If Question 7 above is answered in the affirmative, whether the Defendant is estopped from alleging that the Agency Agreement was terminated due to breach of the Agency Agreement? Issue 13: If Question 7 above is answered in the affirmative, whether the Defendant has waived its rights from alleging that the Agency Agreement was terminated due to breach of the Agency Agreement? [193] The Plaintiff asserted that the Defendant is estopped from alleging the Plaintiff’s breach of contract because the Defendant did not rely on 231 Clause 6.2(a) of the Agency Agreement to terminate the same and giving the Plaintiff 15 days’ notice to rectify the breaches. [194] The Plaintiff also argued that the Defendant has waived its rights from alleging that the Agency Agreement was terminated due to purported breaches or illegal conduct by the Plaintiff since in the notice of termination, the Defendant had chosen not to give any reasons at all for the termination and the Defendant did not take any action against the Plaintiff until the present suit was filed by the Plaintiff. [195] The Defendant retorted that the mere non-reliance on Clause 6.2(a) of the Agency Agreement is no basis for the Plaintiff’s claim of estoppel or waiver. In the case of Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v Intrared Sdn Bhd & Anor [2013] 7 MLJ 437, Nallini Pathmanathan J (now FCJ) rejected the defendant’s estoppel and waiver claim even though the plaintiff in that case did not rely on a clause in the agreement which would have given the defendant 14 day to rectify its breach of payment. 232 [196] I agree with the Defendant that just because it chose, based on acceptable grounds, to terminate the Agency Agreement based on Clause 6.3, as expressly provided for under the Agreement, it is not estopped from making a case that the Plaintiff is in breach of the Agreement. This is clearly a separate cause of action that is available to the Defendant. [197] Furthermore, the Plaintiff has committed breaches of the Agency Agreement and other unlawful conduct. The Plaintiff did not come to court with clean hands and is therefore not entitled to rely on the equitable doctrine of estoppel against the Defendant (see Cheng Chuan Development Sdn Bhd v Ng Ah Hock [1982] 2 MLJ 222, Ho Weng Leong v Ng Kee Chin [1996] 5 MLJ 139 and Boo Are Ngor (P) v Chua Mee Liang (P) (sued as public officer of Kim Leng Tze Temple) [2009] 6 MLJ 145 whereby Ms. Manjit’s attempts to distinguish these cases and the case of SPM Membrane Switch (supra) as cited by Ms. Cindy are, to my mind, not on valid grounds). 233 [198] As for the so-called delay of 15 months between the date of the notice of termination and the filing of the Defendant’s counterclaim, the Defendant did raise the issues of some of the alleged breaches which had been committed by the Plaintiff in the e-mails dated 18.5.2015,

21.5.2015, 27.52015 and 14.10.2015 (exhibits P89, P91, P93 and P95) to the Plaintiff. Besides, Clause 7.1 of the Agency Agreement states that “Any failure to enforce any of provisions of this Agreement shall not be construed as waiver by such party of its right concerning such provision.”. The Federal Court in Kumpulan Darul Ehsan Bhd v Mastika Lagenda Sdn Bhd [2017] 4 MLJ 561 had occasion to consider a clause which is similar to Clause 7.1 and found that there was no basis to call upon equity in aid to the case of the defendant and that laches and unreasonable delay do not arise. In addition, the Defendant is well within the limitation period of 6 years for a claim based on breach of contract (see s 6 of the Limitation Act 1953 [Act 254]). 234 Issue 12: Whether the Defendant’s conduct of terminating the Plaintiff’s agency was pre-maturely without any sufficient cause or is wrongful and unlawful? [199] The Plaintiff submitted that Clause 6.1 of the Agency Agreement clearly provides that the Agreement shall be in effect for a period of 5 years from 31.3.2013. However, the Defendant terminated the same prematurely vide a notice dated 24.2.2016 (exhibit P97) and without sufficient cause because no reasons at all were stated in the notice. The Plaintiff claimed that pursuant to s 158 CA 1950, it is entitled to compensation. The said provision reads: “Compensation for revocation by principal or renunciation by agent

Where there is an express or implied contract that the agency should be continued for any period of time, the principal must make compensation to the agent, or the agent to the principal, as the case may be, for any previous revocation or renunciation of the agency without sufficient cause.”. 235 [200] Ms. Manjit cited the decisions of the Court of Appeal in American International Assurance Co Ltd v Koh Yen Bee (F) [2002] 4 MLJ 301 and Merbok Hilir Bhd v Sheikh Khaled Jassem bin Mohammad Jassem Al-Thani (t/a Petroserv General Trading Establishment) and other appeals [2013] 5 MLJ 407 for the propositions that s 158 CA 1950 does not apply to all contracts of agency but only to the contracts of agency for a fixed period of time and that a fixed term agency cannot be terminated without sufficient cause, consistent with ss 157 and 158 CA 1950, respectively. [201] She further referred to the evidence given by Hazim and Datuk Fariz on the hardship allegedly suffered by the Plaintiff as a result of the abrupt termination of the Agency Agreement. Learned counsel urged the Court to allow the Plaintiff’s claim for compensation for the unlawful, wrongful and premature termination of the same. [202] The Plaintiff, however, did not response to the fundamental issue that it did not plead this cause of action and nor did it seek the relief as what was suddenly raised at the stage of submission. This failure to plead 236 is sufficient to dispose of Issue 12 altogether but for the sake of completeness, my views on the Plaintiff’s contentions have been partly articulated in paras 71 - 76 above. [203] In furtherance of those views –

the Defendant has provided a cogent reason as to why Clause 6.3 was chosen instead of Clause 6.2(a) namely, because it did not want the Plaintiff to delay the termination of the Agency Agreement. This is how Zelim describes it: “In our correspondence with MRA in May 2015 and October 2015 we clearly named the issues we have with MRA and we also list the reasons for eventual termination of the agency agreement. Since MRA denied all our accusations of any unlawful activities, we realized that if we followed the process of 6.2, we will simply delay the process of termination of the agency agreement. MRA was interested in buying time to make sure agency agreement stays valid as long as possible. Not willing to give them this opportunity, we chose to terminate the agreement based on 6.3 because we felt 237 we have already expressed all our claims clearly enough in our emails.”; and

although the Plaintiff in its letter dated 14.3.2016 (exhibit P98) stated that “… the fixed term agency agreement has been prematurely terminated by DIATECH for no reason whatsoever.”, the evidence before this Court proves, on a balance of probabilities, that the Plaintiff has committed breach of contract, misrepresentation, misappropriation of the business opportunity belonging to the Defendant as its principal, copyright infringement and breach of confidential information (the latter two causes of action will be discussed in the ensuing paras). There is, therefore, more than sufficient cause for termination and there is no room for the application of s 158 CA 1950 in this case. [204] Before moving on to the evaluation of Issues 9, 10 and 11, it should be made clear that in the course of determining these three Issues, the Court has borne in mind the overarching additional Issue 14 which was framed by the Defendant i.e. “Whether the Plaintiff has a defence to the Defendant’s counterclaim?”. 238 Issue 9: Whether the Plaintiff infringed the copyright of the Defendant? - The Defendant’s pleaded case [205] Before proceeding to deal with the issue as to whether the Defendant has fulfilled the legal requirements to establish its cause of action for infringement of copyright, I shall first need to address the Plaintiff’s submission on the point regarding pleadings. [206] Ms. Manjit referred to paras 17, 50 and 53 of the Statement of Defence And Counterclaim which state as follows: “17. The Defendant further states that the Defendant is the rightful copyright owner of the Information and Documents. The copyright is subsisting in the literary work of the Information and Documents as the Defendant has expended much skill and effort to create the Information and Documents. …

The Defendant states that there is reproduction of the Defendant’s material in relation to the PDT Technology 239 by the Plaintiff. A perusal of the Plaintiff’s presentation materials for HAT would disclose that the Plaintiff has copied substantially from the Defendant’s presentation material. …

A simple comparison between the Technical Report and/or presentations of HAT and PDT would disclose that the Technical Report and/or presentations for HAT was copied entirely from PDT, save for the details in Russian language in the diagram which was removed by the Plaintiff.”, and argued that the Defendant’s claim on copyright infringement ought to fail on point of pleadings. This is because –

the Defendant has failed to plead the particulars of copyright infringement and the purported “confidential information and documents pertaining to PDT”. In para 49 of the Statement of Defence and Counterclaim, the Defendant stated that it is “… unable until discovery to give particulars of all the acts of breach of confidential information and copyright infringement committed by the Plaintiff, but will at the trial of this action seek to recover in 240 respect of all such acts. The following are the particulars that the Defendant can give until after discovery.”. Ms. Manjit argued that this statement shows that the Defendant is aware of the requirement for it to plead the particulars of all acts of breach but no application for the discovery of documents and amendment of pleadings were made by the Defendant; and

the Defendant is not entitled to rely on the evidence given by Zelim on the comparisons between –

the Defendant’s presentation on the company and PDT at p 500, C4 (exhibit D261) and the Plaintiff’s presentation on HATs at p 471, C4 (exhibit D64) showing the “Scientific Principals Of Phonon Testing Technology” and “Hybrid Acoustic Technology (HAT) Fundamental”, respectively, with the same drawing and mathematical concept of E + M → PhE (where “E” = Energy, “M” = Material and “PhE” = Phonon Emission) and physics on the “occurring of stress”; 241

(ii) the Defendant’s webpages at p 3807, B25 (exhibit P138) and p 8127, B54 (exhibit D258), and the Plaintiff’s HATs marketing materials/ bunting at the exhibition with Bisco at pp 8133 and 8135 (exhibit D196) showing similar screenshots of “Phonon diagnostics of tank structures: Interconnection diagrams” and the “Real-time defect processing and identification” as against the Plaintiff’s “Engineering & Material Management Asset Integrity Safety Management Assessment” (“Lower Semisphere”, “Upper Semisphere” and “Phonon Diagnostics ‘Flat’ Scheme”);

(iii) the Defendant’s presentation on the company and PDT at p 500, C4 (exhibit D261) and the Plaintiff’s HATs marketing materials/ bunting at the exhibition with Bisco at pp 8132 (exhibit D196) showing the “Scientific Principals Of Phonon Testing Technology” and “HATs Fundamental”, respectively, with the same drawing and mathematical concept of E + M → PhE (where “E” = Energy, “M” = 242 Material and “PhE” = Phonon Emission) and physics on the “occurring of stress”; and

(iv) the Defendant’s presentation on the company and PDT at p 509, C4 (exhibit D261) and the Defendant’s webpage at p 3807, B25 (exhibit P138), and the Plaintiff’s HATs marketing materials/ bunting at the exhibition with Bisco at pp 8134 (exhibit D196) showing a similar drawing of the “3D-Model Of Tank With Defective Areas” and the “Grade Of Defective Areas” (insignificant, significant and critical defects at the Upper, Middle and Lower Levels) as against the Plaintiff’s services, respectively, for the reason that the subsistence of copyright in the Defendant’s work as set out above is in the form of artistic works pursuant to para 7(1)(c) of the Copyright Act 1987 (‘CA 1987’) but para 17 of the Statement of Defence and Counterclaim mentions literary work and not artistic work. 243 [207] I have examined the Defendant’s pleadings and it is my considered opinion that the Defendant has pleaded sufficient particulars of the alleged copyright infringement and the information and documents pertaining to PDT as evident in paras 50 and 53 of the Statement of Defence And Counterclaim. In para 50, the Defendant had expressly pleaded that the works infringed consist of the Defendant’s presentation material in relation to PDT while the infringing works consist of the Plaintiff’s presentation materials for HATs. In para 53, the Defendant had pleaded that a simple comparison between the Technical Report and/ or presentations on PDT and HATs would disclose that the Technical Report and/ or presentations on HATs was copied from PDT. [208] Additionally, in para 52, the Defendant had averred that in the course of marketing PDT to its customers, the Defendant had provided the Plaintiff with technical information for them to prepare the presentation slides for PDT to its customers. This is because the Plaintiff does not possess any technical knowledge on PDT as the Plaintiff was never authorised to perform services using PDT for its customers. 244 [209] Moreover, the trite legal principles that a party must plead material facts and not evidence (see Sukatno v Lee Seng Kee [2009] 3 MLJ 306; Iftikar Ahmed Khan (as a representative for the estate of Sardar Mohd Roshan Khan, deceased) v Perwira Affin Bank Bhd (previously known as Perwira Habib Bank Malaysia Bhd) [2017] MLJU 1765; and Tony Pua Kiam Wee v Government of Malaysia and another appeal [2019] 12 MLJ 1) and evidence given at the trial can overcome defects in the pleadings, if any, where the net result of such evidence is to prevent the other side from being taken by surprise, stand in the Defendant’s favor. In the instant case, the Plaintiff was not prejudiced or taken by surprise by any aspect of the Defendant’s pleadings on copyright infringement since the material facts have been pleaded such as to enable the Plaintiff to respond and prepare its case in a comprehensive manner as seen from the detailed questioning of the witnesses during the trial and extensive written submissions filed (see the series of decisions by the apex court in Playing Cards (Malaysia) Sdn Bhd v China Mutual Navigation Co Ltd [1980] 2 MLJ 182; Siti Aisha binti Ibrahim v Goh Cheng Hwai [1982] 2 MLJ 124; Ang Koon Kau & 245 Anor v Lau Piang Ngong [1984] 2 MLJ 277; and Kondisi Utama Sdn Bhd v Baltic Agencies Pte Ltd and another appeal [2019] 1 MLJ 181). [210] It is undeniable that the Defendant had pleaded “literary work” as opposed to “artistic work” (see para 17 in the Statement of Defence and Counterclaim). According to sub-s 7(1) CA 1987, both these works are eligible for copyright. The definition of “artistic work” under limb (a) in s 3 CA 1987 includes a graphic work, photograph, sculpture or collage irrespective of artistic quality whilst the definition of “graphic work”, also in limb (a) of the same section, includes any painting, drawing, diagram, map, chart or plan. [211] There are eight limbs to the definition of “literary work” in s 3 CA 1987 but Ms. Cindy has chosen to highlight the following limbs: “(a) novels, stories, books, pamphlets, manuscripts, poetical works and other writings; …

letters, reports and memoranda; … 246

tables or compilations, whether or not expressed in words, figures or symbols and whether or not in a visible form; …”. [212] The copyrighted work which learned counsel submitted belongs to the Defendant and was infringed are as follows:

the Defendant’s webpages on PDT at pp 3803 - 3813, B25 (exhibit P138) and pp 8121 - 8129, B54 (exhibit D258);

the Defendant’s presentation on the company and PDT at pp 494 - 525, C4 (exhibit D261);

the Defendant’s technical information in the presentation slides on PDT at pp 4322 - 4347, B29 (exhibit P139); and

the Defendant’s technical information in the presentation slides on PDT at pp 4396 – 4427, B29 (exhibit P140) 247 (hereinafter collectively referred to as the ‘Copyrighted Works’). [213] The Defendant alleged that the Copyrighted Works were infringed by the Plaintiff through the following:

the Plaintiff’s Presentation on HATs at pp 464 - 493, C4 (exhibit D64); pp 527 - 565, C5 (exhibit D65); pp 436 - 463, C4 (exhibit D189); and pp 566 - 617, C5 (exhibit D192);

the Plaintiff’s Presentation on HATs to MTBE dated 15.1.2016 at pp 618 - 652, C5 (exhibit D193); and

the Technical Proposal on HATs to MTBE at pp 4348 - 4374, B29 (exhibit D194) (hereinafter collectively referred to as the ‘Infringing Works’). 248 [214] Ms. Cindy further submitted that the Copyrighted Works are literary and/ or artistic works which are eligible for copyright for the following reasons:

the Copyrighted Works comprise of expressions in writing and based on the definition of “literary work” in s 3 CA 1987, the Copyrighted Works are “literary work”, which is eligible for copyright. In this regard, although the Defendant’s presentation in exhibit D261 also contains photographs and drawings, as a whole it can still be considered as “literary work” pursuant to s 3

the Copyrighted Works contained photographs/ screenshots of PDT software and diagrams and charts in relation to PDT. The diagrams and charts fall within the definition of “graphic works” in s 3 CA 1987 whilst the graphic works and photographs fall within the definition of “artistic works” which is eligible for copyright. 249 [215] I have scrutinised the Copyrighted Works in exhibits P138, P139, P140, D258 and D261 and I find that these contain writings, diagrams, drawings, photographs and screenshots. Based on the Plaintiff’s submission, it accepts that the pages from the Copyrighted Works as set out in paras 37, 38 and 48 of the Defendant’s Written Submission (Vo. 2: Defendant’s Counterclaim) (encl. 304) fall within the description of artistic work namely, diagrams, drawings and photographs. However, the Plaintiff’s complaint is that the Defendant’s pleaded copyright protection is predicated on (i) literary work and not artistic work; and (ii) presentation materials and not web pages. [216] The Defendant responded by relying on O. 1A, RoC 2012 and the decisions of the appellate courts in Playing Cards (Malaysia) (supra); Karuppannan v Elizabeth [2010] 1 MLJ 156; and Malayan Banking Bhd v KM Music Lines Sdn Bhd [2015] 5 MLJ 533 in submitting that the purpose of the rules of pleadings is to enable the other party to know the precise case that it has to answer and these should not be applied to shut out a party from making its case. Further relevant facts or issues of fact may emerge before a case is concluded, and if both parties were 250 able to deal with such facts or issues, then just because the facts were not pleaded should not become a tool to shut out justice on the merits which require that the substantive issue between the parties be considered. [217] In my view, the Defendant’s submission is compelling in the circumstances of this case. The failure to plead that the copyright subsists in the artistic work and that the copyrighted works include the Defendant’s web pages did not catch the Plaintiff by surprise or prejudice it in any way since the key witnesses were shown the Copyrighted Works in exhibits P138, P139, P140, D258 and D261 and their attention was drawn to the relevant pages where they were asked to make comparisons. Since these comparisons involve diagrams, drawings and photographs, the Plaintiff knew that the case presented by the Defendant encompasses artistic work and the Defendant’s web pages. The Plaintiff was not prejudiced, surprised or misled as Ms. Manjit was clearly prepared throughout the trial and ably conducted grueling questioning of the witnesses and had every opportunity of presenting the Plaintiff’s case. 251 [218] Besides, the issue of whether the Copyrighted Work is “artistic work” or “literary work” within the meaning of s 3 CA 1987 is a question of law. In the upshot, this is an apt case for the Court to hold that the technicality of pleadings ought not to be made an instrument of the Plaintiff to prevent a determination of the substantive issues between the parties. [219] If I am found to be in error on this issue regarding pleadings –

the Defendant is still able to rely on the Copyrighted Works in exhibits P139, P140 and D262 which do not comprise the web pages;

the word “includes” in the definition of “literary work” in s 3 CA 1987 denotes that the works enumerated are illustrative and not exclusive or exhaustive. The term “literary work” covers a wide range of works regardless of literary merit or quality and circuit diagrams have been held to be protected as literary work (see 252 Khaw On Copyright Law In Malaysia, Fourth Edition, Lexis Nexis, 2017 by Khaw Lake Tee and Tay Pek San at pp 86 - 87 and footnote 15 where the cases of Anacon Corporation Ltd & Anor v Environmental Research Technology Ltd & Anor [1994] FSR 659 and Real Electronics Industries Singapore (Pte) Ltd v Nimrod Engineering Pte Ltd (T Vimalanathan, third party) [1996] 1 SLR 336 are referred). The width of coverage is reflected by the words “other writings” in limb (a) of the definition. The fact that the Copyrighted Works in exhibits P139, P140 and D261 contain information in writing which can be read by a person or persons is incontrovertible; and

limb (g) of the definition of “literary work” in s 3 CA 1987 covers “tables or compilations, whether or not expressed in words, figures or symbols and whether or not in a visible form”. The Copyrighted Works in exhibits P139, P140 and D261 are compilations expressed in words, figures or symbols apart from diagrams, drawings, photographs and screenshots and thus, would fall under the said limb. 253 - Ownership of copyright [220] The action that can be brought by an owner of copyright and the reliefs available are provided under sub-s 37(1) CA 1987 which reads: “37. (1) Infringements of copyrights and the prohibited acts under sections 36A and 36B shall be actionable at the suit of the owner of the copyright and, in any action for such an infringement or prohibited act, the court may grant the following types of relief:

an order for injunction;

damages;

an account of profits;

statutory damages of not more than twenty-five thousand ringgit for each work, but not more than five hundred thousand ringgit in the aggregate; or

any other order as the court deems fit.”. [221] For the purpose of s 37 CA 1987, “owner of the copyright” means the first owner or an assignee of the relevant part of the copyright (see sub-s 37(11) CA 1987). 254 [222] The Plaintiff contended that based on the above provision, only an owner can launch a suit for copyright infringement and since the Defendant is not the owner of the presentation slides, the Defendant cannot claim copyright in respect of the same and bring this suit to the court. [223] The issue as to whether the Defendant is the owner of the copyright has to be analysed in relation to the following:

The Defendant’s webpages and presentation on the company and PDT (exhibits P138, D258 and D261) Hazim and Datuk Fariz had mentioned the Defendant’s webpages during their evidence. Zelim had testified that exhibits P138 and D258 show the Defendant’s website (see NoE, Vol. on 9.1.2020 at p 16). Exhibit P138 is the section titled “Phonon Diagnostics” and it seeks to explain about PDT in writings, diagrams, drawings, photographs and screenshots on the materials particularly, the alternate diagrams of phonon pipeline 255 system diagnostics, phonon diagnostics in linear location mode for submerged pipelines; and phonon diagnostics of pipeline systems, submerged crossing, tanks, tank structures, spherical tanks, pressure vessels, wellhead equipment, PK-14 boiler, RZ-H-07 reformer, chimney stacks and railway transport rolling stock. Exhibit D258 is also about “Phonon Diagnostics” and the materials. The fact that the Defendant is the owner of the copyright in these webpages was not disputed by the Plaintiff since its bone of contention is that the information therein is easily available. During the cross-examination by Ms. Manjit, Zelim had testified that all the pages of the presentation in exhibit D261 belongs to the Defendant and this was accepted by learned counsel (see NoE, Vol. 14 on 18.11.2019 at pp 34 - 35). The Defendant’s name and logo can clearly be seen on all three exhibits where in exhibit D261, these are found at the bottom of each slide (see pp 495 - 504, 506 - 509, 512 - 514, 516 - 523 and 256 525, C4 including the cover page at p 494 which states that all the slides are “SPC Diatech LLC Company Presentation”). Based on the oral and documentary evidence, the Court is satisfied that the Defendant has established that it is the author and owner of the copyright in these exhibits.

The Defendant’s technical information in the presentation slides (exhibits P139 and P140) Zelim had given evidence that all information on PDT in the presentation slides marked as exhibits P139 and P140 (‘said Slides’) originated from the Defendant (see NoE, Vol. 12 on 17.10.2019 at p 95). The Defendant asserted that as a result of the Plaintiff’s obligation to promote PDT under the Agency Agreement, the Defendant had provided the Plaintiff with information regarding PDT to enable the Plaintiff to produce the said Slides to market PDT. 257 Ms. Cindy submitted that, as the Plaintiff’s principal, the Defendant is the ultimate owner of the copyright subsisting in the said Slides by reason of the following: • the Defendant is the equitable owner of the said Slides; • any rights that the Plaintiff may have in preparing the said Slides have been assigned to the Defendant; and • the Plaintiff has prepared the said Slides as an agent of the Defendant.

Equitable ownership & the principal – agent relationship The Defendant contended that it is the equitable owner of the said Slides because they were prepared during the period when the Plaintiff was the Defendant’s exclusive agent and solely for the purpose of marketing PDT pursuant to the Agency Agreement. As consideration for 258 the Plaintiff’s preparation of the marketing materials, the Plaintiff obtained the benefit of being the exclusive agent for PDT in numerous jurisdictions. Neither party could have contemplated that the Plaintiff would have any genuine use for the said Slides themselves. Thus, the Defendant is said to be the equitable owner of the work in the said Slides. Ms. Cindy went on to submit that in view of Zelim’s testimony as above mentioned, the Plaintiff’s presentations slides were derivative from the pre-existing work and information of the Defendant. This is evident from the fact that certain diagrams in the said Slides were taken from the Defendant’s PDT software because the Cyrillic alphabet can be seen and are in the same format as the screenshot from the Defendant’s PDT software. The Plaintiff vigorously opposed the Defendant’s contentions on several grounds as set out below: 259

(A) The Defendant’s stance that the Plaintiff’s presentation in exhibits P139 and P140 is the Defendant’s copyrighted work is a radical departure from the pleaded case which is the Defendant’s copyright subsists in the Defendant’s works that it had created. This ground can immediately be dismissed as being completely unfounded by reference to paras 15, 16, 17 and 52 of the Statement of Defence and Counterclaim. This also concurrently debunks the Plaintiff’s contention that the Defendant’s works were created by the Defendant’s employees in Russia and hence, is not eligible for copyright in view of sub-s 10(3) CA 1987 which provides that “Notwithstanding subsection (1) and

(2), copyright shall subsist, subject to this Act, in every work eligible for copyright if the work is made in Malaysia.”. Under sub-s 10(3), copyright may subsist in a work that is made i.e. created or reduced into writing or some other material form, in Malaysia. 260 A work first published in Malaysia is entitled to copyright in Malaysia irrespective of whether the author is a qualified person viz. a citizen or a permanent resident of Malaysia or a body established in Malaysia and constituted or vested with a legal personality (see s 3 CA 1987), or not [see Khaw on Copyright Law in Malaysia (supra at pp 57, 65 - 66)]. The said Slides were put together by the Plaintiff in Malaysia upon its appointment as the Defendant’s agent. Hence the said Slides are eligible for copyright under CA 1987.

(B) Datuk Fariz had testified that he gathered the information to create the said Slides from the Defendant’s website (exhibit P138) and Skypearl’s and Calidad’s presentation slides on PDT (exhibits P136 and P137). Hazim’s evidence was that the information used to create the said Slides is easily available in the market and from the internet as can 261 be seen in the web printout of Shanghai Daodun (exhibit 141) which contains identical information on PDT. This evidence is consistent with the Plaintiff’s pleadings in para 25.2 of the Reply to Statement of Defence and Defence to Counterclaim. In short, the Plaintiff contends that it is the author of the said Slides and had independently produced the same based on material which were already and easily available. It was additionally argued that the Plaintiff was not commissioned by the Defendant to create the said Slides and so the question of transfer of ownership does not arise (see s 26 CA 1987). In finding the answer to the conundrum surrounding the issue of the author, owner and maker of the said Slides, I was very much assisted by the elucidation in Khaw on Copyright Law in Malaysia (supra, at pp 161 - 164 and 171 - 172) which can be summarised as follows: 262  The author is the creator or originator of the works and is generally, the first owner of the copyright but he may not always remain so for the duration of the copyright. Where literary works are concerned, the author is the writer or maker of the works.  The owner is the person who has put in sufficient skill and effort of his own to produce an original work and is thereby entitled to control the doing of the various restricted acts.  The maker is the person who first reduced the work into material form or who completed the work. The Plaintiff alleged that it is the author of the said Slides because it created or made the same. Whilst this may appear to be correct at first blush, the 263 Plaintiff has side-stepped several unassailable facts, namely that –

(I) the said Slides are on PDT and were prepared by the Plaintiff as the Defendant’s agent in line with the Plaintiff’s obligation to promote and sell PTD in Malaysia pursuant to the Agency

the Plaintiff has no knowledge about the technical aspects of PDT and had sourced the information for the said Slides from the Defendant’s webpages. The indicia of copyright “©Diatech, 2013” on the webpage as a form of notification to the public of a claim to copyright is visible (see exhibits P138 and D258); 264

sufficient effort has been expended by the Defendant to make the technical information original in character. Para 7(3)(a) CA 1987 provides, among others, that a literary work shall not be eligible for copyright unless significant effort has been expended to make the work original in character. Originality in the context of copyright does not mean that the work must be in an original or novel form. The originality required relates to the expression of the thought. The work must not be copied from another work and a sufficient amount of the work must originate from the author independently (see the Federal Court decision in Dura-mine Sdn Bhd v Elster Metering Limited & Anor [2015] 3 MLJ 1). In this regard, Zelim had said that the Defendant is the only company in the world which has phonon technology in industrial diagnostics and the 265 details of PDT are only known, and is owned, by the Defendant; and

the technical information on PDT have been written, recorded or otherwise reduced to “material form” as defined in para 7(3)(b) CA

In view of the above, the Defendant’s submissions that the Defendant is the ultimate copyright owner of the said Slides by virtue of the fiduciary relationship between the Defendant and the Plaintiff as principal and agent, respectively, is on solid ground. To support her argument that the Plaintiff holds the copyright to the said Slides in trust for the Defendant, Ms. Cindy cited the High Court decision in Juris Technologies Sdn Bhd & Anor v Foo Tiang Sin & Ors [2020] MLJU 157 where Wong Kian Kheong J held that all six defendants were constructive trustees of 266 the 1st plaintiff’s confidential information. In deciding to grant a Judicial Assignment, His Lordship referred to the case of Vitof Ltd v Altoft [2006] EWHC 1678 where the following excerpt from para 5-176 in Copinger & Skone James on Copyright (15th ed) was quoted: “Where the work is created by someone who stands in a fiduciary relationship with another, such that he cannot be heard to say that he created the work for his own benefit, he will usually hold the copyright in trust for that other person.”. In this case, I have no hesitation in making a finding that the Plaintiff holds the copyright to the said Slides in trust for the Defendant. It would be repugnant to all notions of fairness and justice if the Plaintiff is to be allowed to turn the tables and claim that it created the said Slides for its own benefit and is the author, maker and owner of the copyright to the same. 267 Apart from the above, the Plaintiff cannot maintain its own title as the true owner of the copyright against the Defendant since an agent cannot acquire title against the principal. In Halsbury’s Laws of England, Fourth Edition Reissue, Volume 1(2), this trite legal principle is explicated in these words: “An agent in possession of property as agent will not be permitted to deny that his possession is that of his principal. He is therefore estopped from setting up a statutory title against the principal, or maintaining his own title as the true owner against the statutory title acquired by his principal through him.…”. Therefore, it does not lie in the mouth of the Plaintiff to say that it is not liable for copyright infringement when, no matter how one looks at it, the ultimate owner of the copyright in the PDT technical 268 information as contained in the said Slides is the Defendant. It is opportune to mention at this juncture that the Plaintiff had also submitted that the Defendant has failed to file any affidavit or statutory declaration under sub-s 42(2) CA1987 claiming to be the owner of the copyright work for copyright protection. This submission is entirely misplaced as s 42 merely provides that a person claiming to be the owner of the copyright in a work, or any person on his behalf, may attach a certified extract of the Register of Copyright referred to under s 26B, or may make an affidavit or statutory declaration, with a true copy of the work annexed to it, as evidence that at the time specified, copyright subsists in the work and he is the owner of the copyright. In Dura-mine’s case (supra), the Federal Court observed that s 42 provides a means but not the only means of proving copyright. 269 A person claiming copyright could adduce oral evidence and tender other evidence, as what Zelim had done, to proof the claim for copyright. Interestingly for present purposes, the Federal Court agreed that oral evidence, being open to cross-examination, is of higher evidential value than an affidavit or statutory declaration [see Khaw on Copyright Law in Malaysia (supra at pp 71 - 73)].

(C) The proposition that the Defendant is the equitable owner of the said Slides is not based on Malaysian law but on English law which is merely persuasive. Moreover, under sub-s 37(1) CA 1987, an equitable owner cannot maintain a suit for copyright infringement unless the actual owner is joined as a party to the proceedings. The case relied upon by Ms. Cindy in advocating that the Defendant is the equitable owner of the said Slides is A & M Recording Limited And Another v. 270 Video Collection International Limited [1995] E.M.L.R. 25 (see too, a summary of the facts of the case in Khaw on Copyright Law in Malaysia, supra at p 168) and in particular the excerpt from the judgment of Sir Mervyn Davies in the High Court of Justice Chancery Division as quoted below: “When A makes or creates a work for B and A becomes at law the owner of the copyright in the work, B will sometimes be regarded as the equitable owner of the copyright and entitled to have an assignment made in his favour by A. B will be so regarded when it is a necessary implication from the facts of the case that copyright should belong to B; see Copinger, 13th edition, page 96, and Massine v. De Basil (1936-45) Macgillivray’s Copyright Cases, 223.”. However, following from the findings and conclusion of the Court on the Defendant’s alternative argument premised on the law of agency, there is no necessity 271 for the Court to make a determination on the submission as regards the Defendant’s purported equitable ownership of the said Slides.

(ii) Assignment of rights Similarly, the need for a verdict as to the Defendant’s submission based on the authorities of Ray v Classic FM Plc [1998] All ER (D) 105 and Bio Pure Technology Ltd v Jarzon Plastics Ltd & Anthony Elliott [2005] Lexis Citation 3643 that an assignment of all rights in the said Slides to the Defendant has to be implied into the Agency Agreement does not arise in view of the acceptance by the Court of the Defendant’s alternate contention founded on the fiduciary relationship between the parties. Such an assignment, if there is found to be one, must inevitably be an oral assignment and will make the Defendant the equitable owner of the copyright to the said Slides. As the equitable owner, the Defendant would not be entitled to the 272 reliefs available to the legal owner as prescribed under s 37 CA 1987, with the exception of an application for an interlocutory injunction, unless the Plaintiff is joined as a party to the proceedings [see Khaw on Copyright Law in Malaysia (supra at pp 189 - 190)]. - Infringement of copyright [224] Sub-s 13(1) CA 1987 provides, inter alia, that copyright in a literary, artistic or derivative work shall be the exclusive right to control in Malaysia, the reproduction in any material form of the whole work or a substantial part thereof, either in its original or derivative form. [225] The Defendant in this case alleged that there is a direct, as opposed to an indirect, infringement of copyright by the reproduction of a substantial part of the Copyrighted Work in the Infringed Works. Direct infringement occurs when any of the activities under the exclusive control of the copyright owner are conducted without his licence or 273 consent (see sub-s 36(1) CA 1987). The Defendant bears the burden of proving on a balance of probabilities that infringement has occurred [see Khaw on Copyright Law in Malaysia (supra at p 205)]. [226] In Francis Day & Hunter Ltd. And Another v. Bron And Another [1963] 1 Ch. 587 at 618, Upjohn LJ expounded the two-step process in determining whether there is copying, which is a requirement for purposes of direct infringement, in these words: “… The first stage is objective, and the second stage subjective. The first question is whether in fact the alleged infringing work … is similar to the work of the original author ... Is it then proper to draw the inference that the defendant's work may have been copied from the plaintiffs’ work? This is purely an objective question of fact … The next stage is the subjective stage and is equally a question of fact, though … the degree of similarity is most important in reaching this subjective conclusion. The question … is: has the defendant copied the plaintiff's work, or is it an independent work of his own?”. 274 [227] Diplock L.J. in the same case said that “… it is well established that to constitute infringement of copyright in any literary, … work, there must be present two elements: first, there must be sufficient objective similarity between the infringing work and the copyright work, or a substantial part thereof, for the former to be properly described, not necessarily as identical with, but as a reproduction or adaptation of the latter; secondly, the copyright work must be the source from which the infringing work is derived.”. [228] The issue as to whether a substantial part of the work in question has been copied is a matter of fact and degree and depends more on the quality or substantial significance rather than the quantity or physical amount of what had been taken or copied (see the House of Lords decision in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465). [229] The Defendant sought to prove that there was copying by the Plaintiff by showing substantial objective similarities between the Copyrighted Work and Infringed Works. Similar elements in the writings, diagrams, 275 drawings, photographs and screenshots from the relevant pages of the Copyrighted Work and Infringed Works were conveniently re-produced in tables in subparas 37.1, 38.1 - 38.3, 48.1 - 48.31 of the Defendant’s Written Submission (Vol. 2: Defendant’s Counterclaim). [230] I have visually compared the Copyrighted Work and Infringed Works and I find that not only is there a high degree of similarity in the slides, but some slides are in fact exactly the same, for example, the ones at p 500, C4 (exhibit D261) and p 471, C4 (exhibit D64); p 4328, B29 (exhibit P139) and p 444, C4 (exhibit D189); and p 4329, B29 (exhibit P139) and p 445, C4 (exhibit D189). As submitted by the Defendant’s counsel, the copying is so blatant that the Cyrillic alphabet for PDT materials can be seen in some of the HATs materials in the Infringing Works (for example, see subparas 48.14, 48.17, 48.29 and 48.31 in the Defendant’s Written Submission) and there is also reference to “phonon transducers” in the Infringing Works (see subparas 48.13 and 48.28 in the same Submission). 276 [231] In their evidence, Hazim (see NoE, Vol. 4 on 14.2.2019 at pp 9 - 14, 19 - 24, 27 - 33 and 42) and Datuk Fariz (see NoE, Vol. 6 on 22.3.2019 at pp 14 - 17) themselves acknowledged that some pages in the slides on PDT and the ones on HATs “look alike” or are similar. In respect of the wordings/ information, diagrams and contents in some of the slides, Hazim agreed with Ms. Cindy’s suggestions that they are identical. [232] It is, of course, open to the Plaintiff to argue that there are differences between the Copyrighted Work and Infringed Works which indicate independent creation or other sources in respect of the latter such that any inference of copying is rebutted. In her submission for the Plaintiff, Ms. Manjit pointed out that there are differences in the screenshots at p 8127, B54 (exhibit D258) with the ones at pp 8133 and 8135, B54 (exhibit D196). However, exhibit D196 is not among the Infringing Works which are relied upon by the Defendant. As for Hazim’s evidence that the presentation slides and promotional materials for HATs are completely different from the ones used for PDT, the Court agrees with the Defendant that the testimony of a single partisan witness cannot hold water against the Plaintiff’s witnesses’ admissions 277 and the contemporaneous documentary evidence which tend to support that there are similarities in the Infringed Copyright and the Infringing Works. Moreover, the use of even a small portion of an author’s work is sufficient, if it is used in a work which competes with the author’s work (see para 520.092 of Halsbury’s Laws of Malaysia – Intellectual Property). In the instant case, HATs is a technology which is competing directly with PDT but the similarities are sufficiently numerous to support an inference of copying. [233] Following from the above analysis, this Court is satisfied that the Defendant has proven sufficient objective similarity in a substantial part of the Infringed Copyright. A prima facie presumption of copying by the Plaintiff arises and the burden is shifted to it to rebut the causal connection. Failure to do so means that the Infringing Works must have been copied from the Copyrighted Works (see Megnaway Enterprise, supra at p 537). [234] The matters raised by the Plaintiff in attempting to rebut the said presumption (which have not been dealt with under the foregoing parts 278 of this judgment since there is an overlapping of issues in the Defendant’s submissions) and the findings of the Court are set out below:

Hazim’s evidence that the slides in exhibits D64, D65, D189, D192 and D193 are not the Plaintiff’s presentations and the absence of any proof on details of the presentations and attendees. Hazim testified that the Plaintiff’s actual HATs presentation is at pp 3766 - 3802, B25 (exhibit P142) and that he did not present the slide on HATs at p 471, C4 (exhibit D64).

PTD and HATs are diagnostic and inspection technologies which are provided to the oil and gas industry with similar benefits, advantages and limitations. Hence, owing to their common features, similarities are unavoidable and even if there are any, they ought to be disregarded as they relate to features that are commonplace and on general physics. 279 – In respect of subparas (a) and (b) above, The Court has earlier ruled that the Plaintiff used “phonon” to mislead customers as to the inspections which were performed; merely changed the reference to the diagnostic method from PTD to HATs as evident from the Infringing Works; and leeched on PDT to promote HATs. In view of these findings, HATs as the so-called diagnostic inspection technology invented by Hazim is totally discredited. In addition, Hazim’s credibility as a truthful witness is very much in doubt as discussed in the preceding part of this judgment. In contrast, Syafiq had testified that he had seen exhibit D64 in 2016 at the Plaintiff’s office. This would support the Defendant’s stance that the said presentation slides originated from the Plaintiff.

The Defendant has failed to produce the original work from which the Infringing Works were purportedly copied from and so, it is not possible for the Court to undertake the comparison in 280 determining whether there is objective similarity between the Copyrighted Works and the Infringing Works. – The Defendant’s submission is erroneous since the Infringing Works may be made from the original or from a copy or a reproduction of the original.

There is no evidence before the Court that the Defendant had passed any information pertaining to PDT to the Plaintiff to establish causal connection. – The Court takes the view that in so far as Hazim’s and Datuk Fariz’s admission in court that they had relied on information available from the Defendant’s website, there is thus no need for the Defendant to show that information on PDT had been “passed” by the Defendant to the Plaintiff. With regards to exhibits P139, P140 and D261, Zelim’s account on these has been discussed earlier. 281

The Defendant ought to have produced an expert opinion to guide the Court since the counterclaim for copyright infringement is based on technology which is scientific in nature. – The Court finds that there is no necessity for such expert opinion as the case authorities cited have clearly held that proof of objective similarities require a visual comparison to be done by the Court to detect the similarities and differences between the Copyrighted Works and the Infringing Works. The Court is able to do so without the need for any expert opinion.

The diagrams, photographs and screenshots in question show the method of operation, procedure and mathematical expression which are not protected under sub-s 7(2A) CA 1987. – In my opinion, the diagrams, photographs and screenshots must be seen and read together with the writings and drawings in the Copyrighted Works which goes to show that 282 the work has transposed beyond a mere idea. The basic concepts have been detailed and transformed into concrete or tangible form as evident from exhibits D258 and D261 and thus are protectable elements under the law.

In so far as the buntings, banners and brochures for the event at Saudi Arabia are concerned, these were prepared by Bisco who had mistakenly mixed up the PTD materials with the HATs materials. Hazim had instructed Bisco to remove the buntings etc. and Bisco had done so. The Plaintiff cannot be held liable for infringement of copyright of material prepared by a third party. – It has earlier been alluded to that the Defendant did not appoint the Plaintiff as an agent to promote PDT in Saudi Arabia and the Defendant has no knowledge about Bisco. Thus, the only logical conclusion is that it was the Plaintiff who provided the materials to Bisco. The Plaintiff did not call anyone from Bisco to support its version of the facts. The Court holds that the Plaintiff has not discharged the burden of 283 proving the facts as it has claimed in court (see s 103 of the EA 1950).

Even if there is copying, it was done unconsciously and was inevitable. – The short answer to this contention is that there is no requirement to prove that the Plaintiff intends to infringe or has knowledge that it is infringing a work. This is a case involving textual copying and deliberate substitution of the word “PDT” with “HATs” in the presentation slides (and as seen earlier, in the reports on the diagnostic inspections performed for the Plaintiff’s clients). It is highly implausible for the Plaintiff to have copied the Copyrighted Works involuntarily. [235] To sum up, proof of sufficient similarities and causal connection gives rise to an inference of copying, which the Plaintiff must rebut. Since this Court disbelieves the explanation offered, and rejects the 284 arguments raised, by the Plaintiff, the irresistible conclusion is that a substantial part of the Copyrighted Work has been infringed. Issue 10: Whether the Plaintiff had committed breach of confidential information pertaining to the Defendant’s documents and confidential information? - The Defendant’s pleaded case [236] The Plaintiff once again raised the issue of the Defendant’s pleadings, this time in respect of the alleged failure to clearly identify the information alleged to have been imparted in confidence and to have been misused by the Plaintiff. Ms. Manjit cited a host of cases such as Ganesh Raja a/l Nagaiah & Ors v NR Rubber Industries Sdn Bhd [2017] 2 MLJ 396; China Road & Bridge Corp & Anor v DCX Technologies Sdn Bhd and another appeal [2014] 5 MLJ 1 and Dynacast (Melaka) Sdn Bhd & Ors v Vision Cast Sdn Bhd & Anor [2016] 3 MLJ 417 in submitting that the information in question must be stated with specificity and not merely on global terms as seen in 285 para 15 of the Statement of Defence and Counterclaim and para 18 of the Reply To Defence To Counterclaim. [237] Para 15 of the Statement of Defence and Counterclaim was quoted in para 51 above. Para 18 of the Reply To Defence To Counterclaim (with my added emphasis) is as follows: “18. In response to paragraph 21 of the DTC, the Defendant states that the Plaintiff had obtained the Defendant’s confidential information either from the Defendant itself or through its representatives including but not limited to the technical information on PDT and PDT’s equipment such as its explanation, diagram, drawings, methodology, etc.”. [238] Having read the pleadings several times, I am of the considered opinion that sufficient particulars have been given on the alleged misappropriated confidential information in paras 15 and 52 of the Statement of Defence and Counterclaim read together with para 18 of the Reply To Defence To Counterclaim. The Plaintiff responded in para 25 of its Defence to Counterclaim by denying the Defendant’s 286 averments in para 15 of the Statement of Defence and Counterclaim, and in para 25.1 by stating that “Plaintif menegaskan bahawa Defendan tidak pernah membekalkan Plaintif dengan sebarang maklumat dan dokumen sulit berkaitan dengan teknologi PDT yang eksklusif kepada Defendan dan tidak didapati dalam domain awam. Defendan diletakkan di atas beban bukti yang kukuh bahawa maklumat dan dokumen sulit telah diberikan oleh Defendan kepada Plaintif.”. [239] This shows that the Plaintiff understood the confidential information pleaded by the Defendant and further supported by the fact that the Plaintiff did not file any application to seek further and better particulars. [240] To avoid repetition of the analysis concerning pleadings under Issue 9 on Copyright, suffice for me to say that the findings thereunder are equally applicable here in that the evidence adduced during the trial is more than sufficient to cure any alleged defects in the Defendant’s pleadings [refer paras 22 of the Defendant’s Written Reply Submission 287 (Reply To Vol. 4: Counterclaim) where learned counsel had tabulated the identity of the confidential information, namely the methodology of PDT in Procedure 2005, the Mathematical Formula and PDT Software, which produced the diagrams or screenshots (technical information of the PTD equipment) (see too, para 245 below), and the evidence as to the nature of the confidential information]. The Plaintiff was not prejudiced or taken by surprise by the Defendant’s pleadings. Ultimately, the pleadings should not become a tool to shut out substantive justice on merits. - The general principles [241] The duty of confidence is expressed in Clerk & Lindsell On Torts, Eighteenth Edition, Sweet & Maxwell, 2000 at p 1517 in these terms: “… a duty of confidence arises when confidential information comes to the knowledge of a person, in circumstances where he has notice, or is held to have agreed that the information is confidential, with the effect that it would be just in all 288 circumstances that he should be precluded from disclosing the information to others.” [see too, para 380.571 in Halsbury’s Laws of Malaysia – Tort (Vol. 13(2)]. [242] Lord Nicholls of Birkenhead in Campbell v MGN Ltd [2004] 2 AC 457 elucidated on this cause of action at pp 464 - 465 as follows (with my added emphasis): “13 The common law or, more precisely, courts of equity have long afforded protection to the wrongful use of private information by means of the cause of action which became known as breach of confidence. A breach of confidence was restrained as a form of unconscionable conduct, akin to a breach of trust. Today this nomenclature is misleading. The breach of confidence label harks back to the time when the cause of action was based on improper use of information disclosed by one person to another in confidence. To attract protection the information had to be of a confidential nature. But the gist of the cause of action was that information of this character had been disclosed by one person to another in circumstances “importing an obligation of confidence” even though no contract of non-disclosure existed: see the classic 289 exposition by Megarry J in Coco v A N Clark (Engineers) Ltd [1969] RPC 41, 47-48. The confidence referred to in the phrase “breach of confidence” was the confidence arising out of a confidential relationship. 14 This cause of action has now firmly shaken off the limiting constraint of the need for an initial confidential relationship. In doing so it has changed its nature. In this country this development was recognised clearly in the judgment of Lord Goff of Chieveley in Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 281. Now the law imposes a “duty of confidence” whenever a person receives information he knows or ought to know is fairly and reasonably to be regarded as confidential. Even this formulation is awkward. The continuing use of the phrase “duty of confidence” and the description of the information as “confidential” is not altogether comfortable. Information about an individual's private life would not, in ordinary usage, be called “confidential”. The more natural description today is that such information is private. The essence of the tort is better encapsulated now as misuse of private information.”. [243] In the case which was mentioned in the above quotation namely, Coco v A. N. Clark (Engineers) Ltd. [1969] RPC 41, the three elements which 290 are normally required for a cause of action for breach of confidence were succinctly stated as that –

the information must have the necessary quality of confidence about it;

the information must have been imparted in circumstances importing an obligation of confidence; and

there must be an unauthorised use of the information to the detriment of the party communicating it. [244] I shall now examine each of the abovementioned elements to determine whether the Defendant has successfully established its counterclaim premised on this cause of action. 291 - Is the information confidential in nature? [245] The Defendant submitted that based on the evidence given by Ilia and Zelim, technical information on PDT comprising of its explanation, diagrams, drawings and methodology had been disclosed to the Plaintiff and in particular –

the Defendant’s internal document that describes the step by step procedure on how PDT is to be carried out titled “Procedure of Instrumental Phonon Diagnostics of Pipelines” (‘PDT

the mathematical formula invented by the Defendant and is used to identify phonon defects (‘Mathematical Formula’); and

screenshots of the Defendant’s software which can only be used by the Defendant in doing diagnostic work (‘PDT Software’). 292 [246] It was contended that the PDT Procedure 2005, Mathematical Formula and PDT Software are Confidential Information belonging to the Defendant because the information –

records, inter alia, the data processing, analysis, procedure, algorithm and formula pertaining to PDT; and

is the Defendant’s invention and pertain to the technology invented by the Defendant. The Defendant as the maker of the Confidential Information has used its “brain” and produced a result which can only be produced by somebody who goes through the same process (with reference to the case of Regent Decorators (M) Sdn. Bhd. & Anor. v. Michael Chee & Ors. [1984] 2 MLJ 78 and Saltman Engineering Co., Ltd. And Others v. Campbell Engineering Co., Ltd. (1963) 65 RPC 203). [247] The Plaintiff retorted that the Defendant has not proven that the Confidential Information is confidential in nature for the following reasons: 293

PDT Procedure 2005 Ms. Manjit submitted, and as confirmed by Zelim himself, that only the title or name of the document viz “Procedure of Instrumental Phonon Diagnostic of Pipelines” is mentioned in the PL 106 Report and Slug Catchers Report and not the contents and nor was a copy of the document attached to these reports. Further, no evidence was adduced to show that a working group as mentioned by Zelim in his evidence was established to produce the said document and that it had expended effort and money in developing the same. Zelim could only recall two people who supposedly authored the PDT Procedure 2005 i.e. Oleg Strobykim and Andrey Konyrev but there was no evidence as to whether they had the necessary qualification for the job. They were not called as witnesses even though they are still in the Defendant’s employment. Prof. Vladimir, whom Hazim and Zelim said had invented PDT, was not named as one of the members of the working group. The best person to testify on the 294 nature and purported confidentiality of PDT Procedure 2005 would be Prof. Vladimir.

Mathematical Formula Apart from repeating its submission pertaining to the working group and non-calling of Prof. Vladimir, Oleg Strobykim and Andrey Konyrev as witnesses, the Plaintiff’s complaint is that Zelim was unable to answer questions on whether the mathematical formula is taught to the expert diagnosticians during the PDT training, how the formula is utilised for purposes of reporting a phonon active area and whether PDT software is required. Although Zelim said the best person to testify on these matters would be the Defendant’s technical specialist on phonon diagnostics, no such person was called as a witness. 295

PDT Software The same points of contention as set out in subpara (b) above were raised by the Plaintiff. [248] I have perused the pages in the reports which contain references to the PDT Procedure 2005 and the Mathematical Formula as well as the screenshots of the PDT Software and it is my finding (using the PL 106 as an example) that –

the para where the PDT Procedure 2005 (at p 2930, C25) is mentioned reads: “For the purpose of executing work there was used a technology of phonon diagnostics and monitoring as a basic one in accordance with Customer’s ASME requirements and normative document “Procedure of instrumental phonon diagnostics of pipelines”. Russian Academy of Natural Science, Division “Diagnostics and safety of technosphere”. Moscow, 2005.”; 296

the Mathematical Formula is applied to do PDT related works and in particular, to calculate, inter alia, the phonon-active area activity coefficient, defect activity coefficient with account for operating life of equipment, scaling coefficient, allowable stress and evaluation of remaining life for pipelines (using the results of phonon diagnostics, actual data on thickness and break point). The complexity of the Mathematical Formula is apparent and as an illustration, the formula to evaluate the remaining life for pipelines is quoted below: “ RPhD = (t D min −h D PhD) − PD 2σ TD min h D PhD . K PhAA T . T , where 𝑅𝑅𝑃𝑃ℎ𝐷𝐷 Remaining life of pipelines, years; T Operating life, years; 𝑡𝑡 𝐷𝐷 𝑚𝑚𝑚𝑚𝑚𝑚 Pipeline wall thickness according to diagnostics data, mm; 297 ℎ 𝐷𝐷 𝑃𝑃ℎ𝐷𝐷 Defect depth according to phonon diagnostics data, mm; P Pipeline design pressure, MPa; 𝜎𝜎 𝑇𝑇𝑇𝑇 𝑚𝑚𝑚𝑚𝑚𝑚 Minimal yield point of pipeline material according to diagnostics data, MPa; 𝐾𝐾 𝑃𝑃ℎ𝐴𝐴𝐴𝐴 𝑇𝑇 Defect activity coefficient according to phonon diagnostics data; D Outer diameter, mm” (see pp 2946, 2968, 2969 and 2991, C25);

the screenshots of the PDT Software with the Cyrillic alphabet and the time and date of processing are introduced by the statement that “Primary results of phonon monitoring for each 3 section are presented on phonon calibrations presented in Table 5.2” (see pp 2936 - 2942, C25); 298

the Confidential Information is evidently complicated, more sophisticated than a simple formulation, method or plan and was created especially for the Defendant’s PDT specialists to perform PDT works;

Hazim in his answer to Question 142 in his Witness Statement has admitted that information concerning data processing and algorithm is confidential for technologies like PDT. The Mathematical Formula and PDT Software is undoubtedly data processing and algorithm. Having seen these being applied in the projects where PDT was utilised, the Plaintiff must have known of the confidential nature of the Confidential Information;

in his evidence, Zelim had explained the confidential nature of the Confidential Information. Firstly, phonon diagnostic and monitoring works are carried out according to the procedure as set out in the PDT Procedure 2005. Secondly, Zelim when cross-examined, was steadfast that the Mathematical Formula was created a very long time ago by a group of specialists in 299 mathematics, diagnostics and other related areas of specialization employed by the Defendant. This work was initiated within the Defendant by the Defendant and the outcome thus belongs to the Defendant and is applied and utilised by the Defendant. Thirdly, the screenshots that comes out from the PTD Software are never identical because they reflect live monitoring of industrial objects which would differ from one project to another and from one part to another part of the same object;

Zelim was also asked about Clause 4 of the Agency Agreement which reads: “4. INTELLECTUAL PROPERTY RIGHT (IP)

4.1 Agent hereby agrees to protect and secure Principal of their Copyright, Patents, Trademarks, Intellectual Property and Data Protection against any threat of plagiarism.

4.2 Agent is responsible to protect the Products against any reverse engineering or modifications from any part with the intent of 300 reproducing the Products or any other intent. Any modifications to be made to the product by Agent shall have written consent from Principal.”, to which Zelim opined that “Data Protection” in Clause 4.1 refers to technical information and for the Defendant, this means confidential information. Hence, under the Agency Agreement, the Plaintiff is duty-bound to protect and secure the Defendant’s confidential information;

non-production of the original PDT Procedure 2005 or a copy of it is not fatal to the Defendant’s case; and

Zelim’s evidence suffice as proof of the confidential nature of the Confidential Information. The Plaintiff did not cite any case authority which has held that only the author can testify on this aspect. As the Defendant’s President since 2009, Zelim is the highest authority in the company and certainly in the best position to give evidence pertaining to the Confidential Information. I agree with the Defendant that in view of the Defendant being a 301 company based in Moscow, Russia, it would be impractical and inconvenient to require each employee who was involved in the creation or invention of the Confidential Information to travel to Kuala Lumpur, Malaysia to testify; [249] In view of all the above, I hold that the Defendant has proven, on a balance of probabilities, that the Confidential Information are confidential in nature. - Was the information communicated in circumstances importing an obligation of confidence? - Was there an unauthorised use of the information by the Plaintiff? [250] The Defendant placed heavy reliance on Zelim’s testimony in submitting that the Plaintiff had received, misused and disclosed Confidential Information without the Defendant’s knowledge and consent when the Plaintiff secretly employed Alex and Marina to perform diagnostic works for projects, specifically as follows: 302

PDT Procedure 2005 Based on the statements at p 2930, C25 and p 7763, B52 in the PL 106 Report and the Slug Catchers Report, respectively, the Defendant contended that the PDT Procedure 2005 was used for the works carried out by the Plaintiff for PCSB. The Plaintiff however argued that Zelim had given contradictory evidence on the issue as to whether the Defendant had furnished the PDT Procedure 2005 to the Plaintiff i.e. ranging from there being no handing over of the document at all, to Zelim himself had transferred the technical information including the said document to the Plaintiff, and then saying that someone else had done so but he did not know the identity of the person. Moreover, the Technical Report Complete Pipeline Integrity Study For Cooling Water Underground Pipelines Petronas Penapisan Melaka (PPM) Sdn Bhd By Means Of Phonon 303 Diagnostic Technology No. TR-PPM-05-12 for the period April – July 2012 (exhibit P136) which was prepared by the Defendant’s and Skypearl’s Project Team consisting of Khosim, Prof. Vladimir, Alex, Marina and Ashraf Abu Seman (as Project Manager and Coordinator) had made reference to the PDT Procedure 2005. This, it was argued, lends credence to the contention that the Plaintiff obtained the information from Skypearl and not from the Defendant. Learned counsel also referred to the Report Studies For Provision Of Reliability Study Utilizing Phonon Diagnostic Technology For PL-222R1-R4 6”, 1.62KM Pipeline (From WLDP-B To WLDP-A) At West Lutong For Petronas Carigali Sdn Bhd dated 16.1.2014 (exhibit P145; ‘PL-222 Report’) where mention is similarly made of the PDT Procedure 2005. The Defendant’s conduct of referring to the said document in the reports that it had prepared for PDT projects, which would subsequently be given to the end customers, is said to have resulted in the said document being placed in the public domain. 304

Mathematical Formula The Defendant asserted that the Mathematical Formula was used in the PL 106 Report and the Report Studies For Provision Of Reliability Study Utilizing Phonon Diagnostic Technology For PL-221 6”, 0.5KM and PL-218 6”, 1.1KM of Pipeline dated 16.1.2014 (exhibit P144; “PL-221 and PL-218 Report”) as can be seen at, among others, p 2946, C25 and p 7668, B51. Ms. Manjit argued that no reliable evidence was adduced by way of oral or documentary evidence to show that the Mathematical Formula was furnished to the Plaintiff on the same grounds as the PDT Procedure 2005. The Plaintiff asserted that the same Mathematical Formula can be found in the PDT reports prepared by Skypearl (exhibit P136) and for projects PID0324 (at pp 8421 - 8480, B57) and PID0089 (at pp 8490 - 8560, B57). Attention was drawn to Ilia’s testimony that the entire PDT report for 305 PID0089 was prepared by the Defendant. The Mathematical Formula is thus said to be in the public domain.

PDT Software The Defendant once again relied on Zelim’s testimony and the PL 106 Report at pp 2937 - 2942, C25 and Slug Catchers Report at pp 7772 - 7796, B52 as evidence that its PDT Software was used to analyse the data for diagnostic work. In addition, reference was made to the PL-221 and PL-218 Report at pp 7660 - 7665, B51 and PL-222 Report at pp 7708 - 7710, B51). The Plaintiff responded by relying on the same parts of Zelim’s evidence which purportedly show a contradiction. Ms. Manjit further referred to Hazim’s and Datuk Fariz’s testimony that the PDT equipment were always under the control of the Defendant’s expert diagnosticians during the tenure of the Agency Agreement. The screenshots from the PDT software are alleged to have been provided by the Defendant’s expert diagnosticians 306 to the Plaintiff for the purposes of incorporating the same in the technical reports to be forwarded to customers. According to the Plaintiff, the PDT screenshots provided by the Plaintiff is purely to demonstrate the results of phonon monitoring to the end user. Akin to the earlier submissions, reference was made to the PL-222 Report and the reports for PID0324 (exhibit D3) and PID0089 (exhibit P82) and to the fact that similar screenshots can be seen at the Defendant’s website (exhibits P138 and D258) and in its company presentation (exhibit D261) to support the contention that the screenshots of PDT software are in the public domain. Ms. Manjit stressed that the Defendant cannot claim that the Plaintiff had committed breach of confidential information by incorporating screenshots of PDT software in PDT reports when the Defendant itself had done so and the screenshots incorporated by the Plaintiff in the PDT reports were provided by the Defendant’s expert diagnosticians. 307 As for the argument premised on the allegation that the Plaintiff’s actual HATs presentation is as per exhibit P142 and not the ones relied upon by the Defendant, this has been dealt with in relation to the issues on Statements 6 and 7 in the said Letters (see para 90). [251] Having considered the entire oral and documentary evidence and submissions by the parties, the following are my findings:

The alleged inconsistencies in Zelim’s evidence as submitted by Ms. Manjit is partly attributed to the way that learned counsel had put the questions to the witness during cross-examination where the same questions were asked in a different, and at times, rather confusing manner. With respect, the tendency for learned counsel to be repetitious and haphazard is exemplified in the written submissions as well. 308 Ultimately, the Court accepts Zelim’s clarification during the re-examination, namely that he believes Alex and/ or Marina, who were both involved in the PL106 and Slug Catchers projects, had passed the Confidential Information to the Plaintiff. This would explain how the PTD Procedure 2005, Mathematical Formula and screen shots of the PDT Software came to be included in the various reports as outlined above. I have, in subpara 131(i) above, given my justifications in concluding that overall, Zelim is a credible witness.

The Plaintiff has not discharged the evidential burden of proof that it had received the Confidential Information from Khosim since Khosim was not called as a witness. Moreover, even if this allegation is true, the Plaintiff would still be bound by the duty of confidentiality in the light of its knowledge about the nature of the Confidential Information, which the Court has held to be confidential. 309

The issue relating to the control of the PDT equipment has been addressed in subpara 70(b) above.

The misuse and disclosure of Confidential Information is supported by documentary evidence in the form of the reports as outlined in the preceding paras. Zelim testified that the reference to the PDT Procedure 2005 in the reports means that the said document must be in the Plaintiff’s possession and that it was shared with the customer. This is because the works concern industrial safety and the customer would want to know what the procedure for the works which are to be carried out. In fact, Zelim said that the customers usually demand for the procedure to familiarise themselves with it.

The irresistible conclusion from the fact that references to the Mathematical Formula are contained in the reports leads back to Alex and Marina who, as the Defendant’s former phonon specialists, are the only ones that would know how to apply the 310 Mathematical Formula to achieve the objectives of the reliability studies and inspection works.

Zelim also testified that the screenshots in these reports are indicia that the Plaintiff had used the Defendant’s PDT Software to analyse data for diagnostic works without consent from the Defendant. The only logical explanation as to how the screenshots of the PDT Software could appear in the reports as aforesaid is that the PDT Software was used for data processing for those diagnostic work since the screenshots are unique to the PDT Software owned by the Defendant and would only appear if the PDT Software was utilised. In re-examination, Zelim said that samples of the screenshots can be seen at the Defendant’s website. However, there is only one PDT software and the shape, frame or general look of the screenshots will seem similar on different shots but the reality is that the contents would be different according to the specific project. The screenshot of the object that was inspected and monitored for a project would be confidential. 311

As regards the Plaintiff’s defence on the ground that the Confidential Information is in the public domain, it is one of the factors to be considered in determining whether there is a duty of confidentiality. Just because the Confidential Information is publicly accessible and/ or accessed, this does not ipso facto strip the Confidential Information of its confidential character. A common sense inquiry based on the circumstances of each case must be undertaken by the Court in determining whether the Confidential Information has become so accessible and/ or accessed that it would not be just to require the Plaintiff to treat the Confidential Information as confidential (see the decision of the Singapore Court of Appeal delivered by Tay Yong Kwang JA in Wee Shuo Woon v HT SRL [2017] 2 SLR 94 and Creation Records Ltd. and others v News Group Newspaper Ltd [1997] Lexis Citation 1633). In the instant case, the Court is in agreement with the Defendant’s submission that a common sense inquiry would lead to the conclusion that the reports as aforementioned were not 312 disclosed to the world at large but were for the consumption of the customers as named in the reports and would remain as internal documents of these customers. The Confidential Information has not become so accessible and/ or accessed that it would not be just to require the Plaintiff to treat the Confidential Information as confidential. To the contrary, the confidentiality of the Confidential Information is preserved. In so far as the Plaintiff’s reliance on the reports for PID0324 (exhibit D3) and PID0089 (exhibit P82) is concerned, Zelim has unwaveringly denied that these reports were prepared by the Defendant. Hence, the Plaintiff’s argument has been nipped in the bud.

There is no legal requirement that the Confidential Information must be imparted directly by the Defendant to the Plaintiff. Even if the Plaintiff received the Confidential Information as a third party recipient, it would still be bound by the duty of confidentiality because it knows of, or is willfully blind to, the confidentiality of 313 the Confidential Information (see Alfa Laval (M) Sdn Bhd v Ng Ah Hai & Ors [2008] 5 MLJ 344 and Imerman v Tchenguiz & Ors [2010] EWCA Civ 908). Hazim’s evidence that information on diagnostic technologies is classified as confidential and the Plaintiff’s conduct in keeping the employment of Alex and Marina under wraps indicate that the Plaintiff is aware of the confidential nature of the Confidential Information and that the unauthorised use of the same would be in violation of the Agency Agreement and may give rise to an action for breach of confidence. [252] In the upshot, the weight of the evidence supports a finding in favor of the Defendant that the Plaintiff had indeed received, misused and disclosed the Confidential Information without the Defendant’s consent and thereby committed breach of confidence. 314 - Absence of a Non-Disclosure Agreement [253] Ms. Manjit submitted that the parties did not sign a Non-Disclosure Agreement (‘NDA’) at the time when any information and document were provided by the Defendant to the Plaintiff. [254] However, it bears repetition that at the material time, the parties were in a principal – agent relationship. Hence, the Plaintiff, as an agent of the Defendant, owes a duty of good faith to the Defendant not to use for purposes other than for the agency, or to divulge to a third party, information obtained by virtue of the agency. [255] Para 110.077 in Halsbury’s Laws of Malaysia – Agency, Volume 4 (2013 Reissue) states the following: “It is the duty of an agent to employ the materials and information obtained by reason of his agency solely for the purposes of the agency, and not to use any materials or information so acquired, whether his agency has come to an end or not, in any manner inconsistent with good faith, 315 as by divulging them to third parties, or by using them himself in unfair competition with his principal.”. (emphasis added) [256] It is therefore crystalline that the factual matrix in this case is such that the Plaintiff, as the Defendant’s agent, cannot be allowed to use the absence of a NDA as a reason to deny its duty of confidence to the Defendant. Issue 11: Whether the Defendant is entitled to the reliefs sought under its counterclaim? [257] Having held that the Defendant has succeeded in proving its cause of action under the counterclaim for breach of contract, copyright infringement and breach of confidential information, it follows that the Defendant is entitled to the reliefs sought namely, in general, for declarations, perpetual injunctions, delivery up, an inquiry in respect of general damages and/ or an account of profits, statutory damages pursuant to para 37(1)(d) CA 1987, interests and costs. 316 [258] With regards to prayer (I) in the Counterclaim for additional, exemplary and/ or aggravated damages, the Defendant in its Written Submission, had urged the Court to award a sum of RM800,000.00 on the grounds that:

the facts of this case fall within the second category of Rookes v Barnard [1964] AC 1129 where the Plaintiff’s conduct was calculated to make a profit for itself and discloses malice, fraud and insolence such as to merit an order for exemplary damages to be paid (see Worldwide Rota Dies Sdn Bhd v Ronald Ong

the Plaintiff’s conduct which depict malice and fraud as borne out by the evidence adduced at the trial are, among others –

the falsification of the Reference Letter and Ilia’s Contract For Services; 317

(ii) misleading customers into thinking that the Plaintiff is providing PDT services by using the PDT name;

(iii) engaging the Defendant’s former Russian employees to perform diagnostic services to mislead customers into thinking that their diagnostic services were performed by the Defendant;

(iv) calling the Plaintiff’s employees “Phonon Engineers” and “Phonon specialists” when these employees have never been trained by the Defendant at the PDT Training Centre in Russia;

concocting HATs to mislead customers but utilising PDT technical information and PDT methodology;

(vi) lying to customers that HATS is an enhanced/ improved version of PDT but yet during the trial, claiming that PDT and HATs are totally different; 318

(vii) continuing to enter into agreements and secret projects with customers using PDT even after the termination of the Agency Agreement;

(viii) interfering with Syafiq, the Defendant’s subpoena witness. On 17.7.2019, Syafiq took the witness stand for the first time. The second question posed by Ms. Cindy in the examination-in-chief was whether anyone from the Plaintiff had contacted him after he was served the subpoena. According to Syafiq, he received messages through WhatsApp inquiring whether he has received the subpoena and if so, to discuss the matter with the Plaintiff’s lawyer and if not, then not to accept the subpoena. Ms. Cindy informed the Court that she will seek the client’s instructions as to whether to file contempt proceedings against Hazim, who presumably is the person who sent the messages to Syafiq (refer NoE, Vol. 10 on 17.7.2019 at pp 4 - 6). However, no such application was filed to date and 319 the Plaintiff made no protestation as to Syafiq’s evidence on this serious allegation of an attempt to tamper with a witness; and

(ix) having a collateral purpose in filing the suit which is to be on the offensive against the Defendant under the erroneous assumption that the Defendant will not come and oppose the suit since it is based in Russia, and obtaining an ex-parte injunction which was subsequently set aside for the primary reason of there being no full and frank disclosure of material facts. [259] The Court had considered all the factors meticulously listed by the Defendant in its Written Submission and finds that there are ample grounds to support the Defendant’s case for prayer (I) to be allowed albeit the quantum of any exemplary and/ or aggravated damages will be determined at the assessment stage of the proceedings. 320 [260] It should be made clear here that following the pronouncement by the Court of the decision in respect of the Common Issues To Be Tried (see para 31), learned counsels appearing for the parties were invited to address the Court on the prayers in the Counterclaim. Ms. Cindy submitted that the Defendant –

would not be pursuing prayer (F) in the Counterclaim;

reserves its right for each copy of the Infringing Works to be counted as per the provisions in the CA 1987 during the assessment of damages;

did not abandon the alternative relief for an account of profits in prayer (G) in the Counterclaim since the word “includes” was used in para 67 of the Defendant’s Written Submission when the prayers in the Counterclaim were mentioned;

prayed for pre-judgment interest to be awarded at the rate of 5% per annum from the date of termination of the Agency Agreement 321 or breach of copyright and confidential information, whichever is earlier. Since the PL 106 Report is the earliest, the Defendant urged the Court to award interest from 30.9.2013; and

sought an order for costs of RM1.2 million for the trial on liability citing cases such as Positive Well Marketing Sdn Bhd v OKA Concrete Industries Sdn Bhd [2014] 10 MLJ 385, Motordata Research Consortium Sdn Bhd v Ahmad Shahril Abdullah & Ors [2017] 1 LNS 1142 and Jan De Nul (Malaysia) Sdn Bhd v. Berjaya Sompo Insurance Berhad [2019] 1 LNS 516. [261] Ms. Manjit, in responding to the above submissions prayed, inter alia, that pre-judgment interest be awarded from 2.5.2017 which is the date of filing of the Counterclaim, and the Court agreed. It was also contended that the Defendant had abandoned the claims for aggravated damages and an account of profits and relying on the case of Motordata (supra), that the Defendant is not entitled to statutory damages pursuant to the CA 1987. However, upon a proper reading of the Defendant’s Written Submission and as further clarified by Ms. 322 Cindy, the Court was not swayed by the submissions of the Plaintiff’s counsel. [262] On the issue of costs, the Court is of the opinion that it would be best for the quantum of costs for the trial on both liability and assessment of damages be determined at the end of the whole proceedings to enable the matter to be considered in its entirety. Moreover, the Court found that the Defendant’s Written Submission and supplemented by counsel’s oral submission on the date of decision did not justify an order for costs in the sum of RM1.2 million to be made at that juncture since the Defendant had not itemised the disbursements in writing (these were raised verbally) and did not produce other relevant case authorities on point. [263] Two drafts of the judgment on liability was prepared on the evening of 14.8.2020 and learned counsels were given the opportunity to submit accordingly and finally, the Court made the orders as reflected in the 2nd draft of the judgment marked as Annexure ‘A’. That, however, was 323 not the end of the matter. Subsequently, the parties twice requested for clarification sessions on the draft judgment. [264] Learned counsels appeared before the Court on 7.9.2020 as regards the wordings of what is now para 7 in the final judgment (see para 30 above). Ms. Manjit also proposed that references to exhibit P138 and D258 be added to subpara 3(a) and to exhibit D261 be added to subpara 3(b). Ms. Cindy relied on the case of Flexsoft Technology Sdn Bhd v. First E-Formatics Sdn Bhd & Ors [2020] 5 CLJ 650 in objecting to the Plaintiff’s suggestion and the Court upheld the objection. The Plaintiff’s counsel additionally enquired regarding the prayers in subpara 36(d)(i) and (ii) in the SoC (see para 25 above) for a permanent injunction to, among others, restrain the Defendant from publishing defamatory allegations against the Plaintiff, HATs and/ or the Plaintiff’s management, directors, employees and/ or shareholders. The Court explained that the foundation for these prayers no longer exists upon the findings of the Court that the Defendant has succeeded in establishing its defence of justification and fair comment. Lastly, Ms. Cindy conveyed her client’s instruction to ask for costs of 324 RM800,000.00 for the trial on liability and that she was prepared to file written submission within a week. However, Ms. Manjit was unable to do so within the same timeline and so the Court decided that the order as to costs shall be maintained and the trial on the assessment of damages before this Court is to be expedited. [265] On 30.9.2020, the counsels again appeared before the Court, this time in relation to para 8 of the draft judgment wherein the Defendant requested, vide its solicitor’s letter dated 9.9.2020, that the amendments as underlined below be incorporated in the said para: “An inquiry as to damages suffered by the Defendant for the Plaintiff’s breach of contract and an inquiry as to damages suffered by the Defendant and alternatively, at the Defendant’s option an account of profits due from the Plaintiff’s act of utilizing and/or disclosing and/or in any way dealing with the Defendant’s Information and Documents and/or the Plaintiff’s acts of infringement of the Defendant’s copyright;”. 325 [266] In the said letter dated 9.9.2020, the Defendant stated its understanding that the inquiry as to damages is for all the cause of actions as pleaded in the Counterclaim including breach of contract, and as an alternative, an account of profit which applies only for infringement of copyright and breach of Confidential Information. The Defendant cited the case of CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1 for the trite principle of ubi jus ibi remedium – where there is a right there is a remedy. [267] The Plaintiff’s counsel objected to the amendment for the reason that the words “and/ or” after the words “An inquiry as to damages suffered by the Defendant” suffice to preserve the Defendant’s right to an inquiry for damages for breach of contract. [268] After hearing submissions by learned counsels, the Court decided that the draft judgment does not need to be amended as proposed by the Defendant because – 326

the Defendant had pleaded three distinct cause of action namely, breach of contract, infringement of copyright and breach of the Defendant’s Confidential Information and the trial had proceeded on this basis and judgment was given in favor of the Defendant for all three cause of action. Based on the CIMB Bank case, the relief is ancillary to the cause of action and thus, the Defendant is not precluded from seeking general damages following the declaration that the Plaintiff has breached the Agency

the Plaintiff’s counsel agreed that the Plaintiff will not raise any objection at the hearing on the assessment of damages to the effect that the Defendant is prohibited from claiming general damages for breach of contract just because this relief was not pleaded in the Counterclaim; and

the wordings in para 8 of the judgment does not preclude the Defendant from leading evidence on general damages for breach of contract at the hearing on assessment of damages. 327 The Plaintiff’s application for leave to adduce fresh evidence during the trial [269] For the sake of completeness, it should be mentioned that during the cross-examination of Zelim on 13.1.2020, which is the 34th day of trial and 9th day of the cross-examination of Zelim (see NoE, Vol. 16 at pp 33 - 45), the Plaintiff’s counsel wanted to refer Zelim to a copy of a document from the State Register of Russia which was printed on 16.11.2019 (‘said Document’). [270] Ms. Manjit drew the attention of the Court to the Primary State Registration Number (‘PSRN’) on the said Document viz. 1027700125210, which is identical to the PSRN in the Certificate issued by the Ministry of Taxation of the Russian Federation for the Defendant, “LLC SPC “Diatech”” (exhibit D252). Learned counsel submitted that the said Document reflects two changes within the Defendant, namely – 328

its full name and abbreviated name which was changed on 16.2.2010 from “Limited Liability Company Scientific and Production Company “Diagnostic Technologies for the Technosphere” or “NPF “Diatekh LLC”” to “Society With Limited Liability Research And Production Firm “Diagnostic

on 8.10.2018, Zelim was released as the President and on 8.7.2019, one Kleschunov Alexey Sergeevich’s position changed from “previously temporarily carrying out the responsibilities of the President” to “currently the President”. [271] The Defendant’s counsel strenuously objected to any reference being made to the said Document. Subsequently, Ms. Manjit informed the Court that her instruction was to proceed to make an application for the said Document to be referred to Zelim and admitted in evidence. [272] The Court then directed learned counsels to prepare written submissions wherein the Plaintiff submitted that this is a suitable case 329 for the Court to exercise the discretion conferred pursuant to O. 1A; O. 3, r. 5; O. 34, r. 2(2)(i); and O. 92, r. 4 RoC 2012 and grant leave to refer and admit the said Document on the grounds that –

the said Document is admissible and relevant to the issue of Zelim’s credibility;

the changes on the full and abbreviated names of the Defendant is within Zelim’s knowledge as the President at the material time;

the changes in the position of the President took place in October 2018 and July 2019 and the said Document was only obtained by the Plaintiff on 16.11.2019. Hence, there was no delay in referring to the said Document;

the Plaintiff’s application is bona fide and is necessary to prevent injustice and will serve to achieve substantial justice in court; and 330

there is no prejudice suffered by the Defendant and nor any element of surprise as the said Document is in relation to the Defendant company and Zelim’s position thereto. [273] The Defendant countered that the Plaintiff’s application should be dismissed with cost because –

the Plaintiff had attempted to adduce new documents on several occasions during the trial and the Court had, on 18.3.2019, expressly directed that no further documents shall be adduced and Ms. Manjit had confirmed that there will not be anymore documents from the Plaintiff;

the Plaintiff’s conduct is a trial by ambush and amounts to an abuse of the process of the court and made in bad faith;

the Plaintiff had closed its case; and

the source of the said Document is doubtful and questionable. 331 [274] Following a short clarification on 21.1.2020 concerning the written submissions, the Court took cognizance that the Plaintiff’s application was with a view of testing Zelim’s credibility pursuant to s 146(a) EA 1950 which provides that “When a witness may be cross-examined, he may, in addition to the questions hereinbefore referred to, be asked any questions which tend – (a) to test his accuracy, veracity or credibility; …”. The Court noted that the Certificate marked as exhibit D252 appears to originate from the Ministry of Taxation of the Russian Federation rather than the authority responsible for State Registration of Legal Entities and the registration number in that Certificate is identical to the PSRN appearing in the said Document. [275] In the circumstances, the Court was inclined to allow the Plaintiff to make references to the said Document in a further session of cross-examination of Zelim with the right being given for re-examination and reasonable time to be given to the Defendant to look into the said Document and to prepare its case. In my view, the interest of justice is best served by giving an opportunity to the Defendant to explain this 332 issue since it involves aspects of Russian law and regulations and if left unexplained, there would be nagging doubt cast over Zelim’s evidence by the very fact that the Plaintiff’s counsel has raised the matter, especially as regards Zelim’s designation as the Defendant’s President, albeit in a very belated manner at the end of her cross-examination. [276] Following the ruling of the Court, on 22.1.2020, Zelim was questioned regarding the said Document which was marked as ID273 and the Plaintiff also produced the printout from the current website of the Defendant (exhibit D272) (see NoE, Vol. 18 at pp 3 - 103). Suffice to say that the Court is satisfied with Zelim’s evidence that (i) he is indeed the Defendant’s President; (ii) ID273 is issued by the Federal Service for Monitoring in the areas of Communication and Information Technologies (ROSKOMNADZOR) which do not issue any certificates or information about companies or their registration and has a statement at the end that “In the process of information output, the section history of changes may contain minor inaccuracies associated with incorrect data obtained from the primary sources, and therefore 333 the information in this section is intended for informational purposes only.”; and (iii) the company registration data is within the scope of the Federal Tax Service which runs the Unified State Register for Legal Entities. In any event, a perusal of Appendix 7(F) in the Plaintiff’s Executive Summary (Volume 2) shows that the Plaintiff had decided not to pursue the issue surrounding ID273 as one of the basis to challenge Zelim’s credibility. PRONOUNCEMENT [277] Based on all the abovesaid consideration, the Court pronounced the following findings in respect of the Common Issues To Be Tried and the Plaintiff’s Additional Issues To Be Tried:

The contents of the e-mail to Repsol dated 15.2.2016, the letter to Repsol dated 15.12.2016 and the letter to Occidental dated 27.12.2016 are defamatory of the Plaintiff. 334

However, the Defendant has established its defence of justification and fair comment.

The Defendant has not committed the tort of inducement for breach of existing contracts between the Plaintiff and Repsol, and the Plaintiff and Occidental.

The Defendant has not committed the tort of unlawful interference of business and tort of intentional interference with prospective economic advantage.

The Plaintiff is not entitled to the reliefs sought.

The Plaintiff had breached the Agency Agreement dated 31.3.2013.

The Defendant is not estopped from alleging that the Agency Agreement was terminated due to the breach of the Agency Agreement. 335

The Plaintiff has infringed the copyright of the Defendant.

The Plaintiff has committed breach of confidential information.

The Defendant is entitled to the reliefs sought under its Counterclaim as set out in the final judgment (encl. 367).

The Defendant’s conduct in terminating the Agency Agreement is not premature without any sufficient cause or is wrongful/ unlawful.

The Plaintiff has not established its defence to the Defendant’s Counterclaim. [278] In summary, the final outcome of this long outstanding dispute is that the Plaintiff has not established any of its claims on a balance of probabilities whilst the Defendant has successfully done so in respect 336 of its counterclaim for breach of the Agency Agreement, copyright infringement and breach of the Defendant’s Confidential Information. [279] Order for assessment of damages to be held before this Court. Dated: 28 May 2021 (ALIZA SULAIMAN) Judge High Court Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Manjit Kaur Gill (Keshantini Baskeran with her) Messrs. Manjit Lavinder & Co. Advocates & Solicitors Suite 566, Block A1 Leisure Commercial Square No. 9, Jalan PJS 8/9 46150 Petaling Jaya Selangor 337 For the Defendant: Cindy Goh Joo Seong (Heidi Lim Ai Yuen and Hayden Tan Chee Khoon with her) Messrs. Chooi & Company + Cheang & Ariff Advocates & Solicitors 39 Court @ Loke Mansion No. 273A, Jalan Medan Tuanku 50300 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: A & M Recording Limited And Another v. Video Collection International Limited [1995] E.M.L.R. AB Latef & Associates (M) Sdn Bhd v Govindasamy a/l Suppiah [2016] 5 MLJ 508 Abdul Rahman bin Md Yusoff & Ors v Kwong Yik Bank Bhd [1998] MLJU 252 Abu Bakar bin Pangis & Ors v Tung Cheong Sawmill Sdn Bhd & Ors [2014] 5 MLJ 384 Alfa Laval (M) Sdn Bhd v Ng Ah Hai & Ors [2008] 5 MLJ 344 338 Allen v Flood [1898] AC 1 American International Assurance Co Ltd v Koh Yen Bee (F) [2002] 4 MLJ 301 Ampledeal (M) Sdn. Bhd. & 3 Ors. v Laponie (M) Sdn. Bhd. & 3 Ors. [2015] MLJU 1933 Anacon Corporation Ltd & Anor v Environmental Research Technology Ltd & Anor [1994] FSR 659 Andy Bagindah v. PP [2000] 3 CLJ 289 Ang Koon Kau & Anor v Lau Piang Ngong [1984] 2 MLJ 277 Attorney General of Belize v Belize Telecom Limited [2009] UKPC 11 Ayob Bin Saud v. TS Sambanthamurthi [1989] 1 MLJ 315 Azmi Osman v. PP & Another Appeal [2015] 9 CLJ 845 Bandar Setia Alam Sdn Bhd v. Intramewah Development Sdn Bhd & Anor [2007] 1 LNS 365 339 Bank Of Tokyo-Mitsubishi (Malaysia) Bhd v. Sim Lim Holdings Bhd & Ors [2001] 2 CLJ 474 Bekalan Sains P & C Sdn Bhd v Bank Bumiputra Malaysia Bhd [2011] 5 MLJ 1 Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 Bio Pure Technology Ltd v (1) Jarzon Plastics Ltd and (2) Anthony Elliott [2005] Lexis Citation 3643 Boo Are Ngor (p) v Chua Mee Liang (p) (sued as public officer of Kim Leng Tze Temple) [2009] 6 MLJ 145 Bovril Ltd v Bodega Co Ltd (1916) 33 RPC 153 BRE Sdn Bhd & Ors v Tun Datuk Patinggi Hj Abdul Rahman Ya' Kub [2005] 3 MLJ 485 Buckman Laboratories (Asia) Pte Ltd v Lee Wei Hoong [1999] 3 SLR 333 Bumi Armada Navigation Sdn Bhd v. Mirza Marine Sdn Bhd [2015] 5 CLJ 652 Campbell v MGN Ltd [2004] 2 AC 457 340 CGU Insurance Bhd v Asean Security Paper Mills Sdn Bhd [2006] 3 MLJ 1 Chai Hoon Seong v Wong Meng Heong [2010] 8 MLJ 104 Chantika Kelang Beras Sdn Bhd v Padiberas Nasional Berhad [2019] MLJU 301 Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327 Cheng Chuan Development Sdn Bhd v Ng Ah Hock [1982] 2 MLJ 222 Chiew Foo Hua v The Publisher Miri Daily News & Anor [2000] MLJU 664 Chin Moi Yen & Ors v Chai Weng Sing & Ors [2016] 1 LNS 976 China Road & Bridge Corp & Anor v DCX Technologies Sdn Bhd and another appeal [2014] 5 MLJ 1 Chok Foo Choo @ Chok Kee Lian v The China Press Bhd [1999] 1 MLJ 371 Chong Swee Huat & Anor v. Lim Shian Ghee t/a L & G Consultants & Education Services [2009] 3 MLJ 665 CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1 341 Coco v A.N. Clark (Engineers) Ltd. [1969] RPC 41 Creation Records Ltd. and others v News Group Newspaper Ltd [1997] Lexis Citation 1633 Dato’ Dr Tan Chee Khuan v Chin Choong Seng @ Victor Chin [2011] 8 MLJ 608 Dato Seri Mohammad Nizar bin Jamaluddin v Sistem Televisyen Malaysia Bhd & Anor [2014] 4 MLJ 242 Dato' Sri Dr Mohamad Salleh Ismail & Anor v. Nurul Izzah Anwar & Anor [2018] 9 CLJ 285 Dato’ Seri Anwar bin Ibrahim v Public Prosecutor & another appeal [2004] 3 MLJ 405 David Macbrayne Limited Pursuer against ATOS IT Services (UK) Limited Defender [2018] CSOH 32 David Wong Hon Leong v. Noorazman bin Adnan [1995] 4 CLJ 155 Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v Intrared Sdn Bhd & Anor [2013] 7 MLJ 437 342 DP Vijandran v Karpal Singh & Ors [2000] 3 MLJ 22 Dura-mine Sdn Bhd v Elster Metering Limited & Anor [2015] 3 MLJ 1 Dynacast (Melaka) Sdn Bhd & Ors v Vision Cast Sdn Bhd & Anor [2016] 3 MLJ 417 Eastern & Oriental Hotel (1951) Sdn Bhd V Ellarious George Fernandez & Anor [1989] 1 MLJ 35 Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422 Flexsoft Technology Sdn Bhd v. First E-Formatics Sdn Bhd & Ors [2020] 5 CLJ 650 Francis Day & Hunter v. Bron [1963] Ch 587 Ganesh Raja a/l Nagaiah & Ors v NR Rubber Industries Sdn Bhd [2017] 2 MLJ 396 Glove Kendall Limited & Anor v Maple Challenge Sdn Bhd & Ors and other suits [2016] MLJU 1452 Greig v Insole [1978] 1 WLR 32 343 Guan Teik Sdn Bhd v. Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324 Gurbachan Singh Bagawan Singh & Ors v. Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719 Guy Neale and others v Nine Squares Pty Ltd [2014] SGCA 64 Gwee Tong Hiang v Boo Cheng Hau [2016] MLJU 27 H & R Johnson (Malaysia) Bhd v H & R Johnson Tiles Limited & Anor [1995] 2 AMR 1390 Ho Weng Leong v Ng Kee Chin [1996] 5 MLJ 139 Iftikar Ahmed Khan (as a representative for the estate of Sardar Mohd Roshan Khan, deceased) v Perwira Affin Bank Bhd (previously known as Perwira Habib Bank Malaysia Bhd) [2017] MLJU 1765 Imerman v Tchenguiz & Ors [2010] EWCA Civ 908 Institute of Commercial Management United Kingdom v New Straits Times Press (Malaysia) Bhd [1993] 1 MLJ 408 Ismeca Malaysia Sdn Bhd v. Micheal Gerard Peterson & Ors [2012] 4 CLJ 973 344 Item Industrial Engineering Sdn Bhd & Ors v Bank Utama (Malaysia) Bhd [2015] 1 CLJ 933 Jaafar bin Shaari & Anor (suing as administrator of the estate of Shofiah bte Ahmad, deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693; [1997] 4 CLJ 509 Jan De Nul (Malaysia) Sdn Bhd v. Berjaya Sompo Insurance Berhad [2019] 1 LNS 516 Janagi v Ong Boon Kiat [1971] 2 MLJ 196 Jasmine Food Corp Sdn Bhd v Leongwai Choon & Anor [2016] 11 MLJ 812 JB Jeyaratnam v Goh Chok Tong [1985] 1 MLJ 334 JB Kulim Development Sdn Bhd v Great Purpose Sdn Bhd [2002] 2 MLJ 298 Jorden v Money [1854] V HLC 185 Joshua Benjamin Jeyaretnam v Goh Chok Tong [1989] 3 MLJ 1 Juahir bin Sadikon v Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 3 MLJ 627 Juris Technologies Sdn Bhd & Anor v Foo Tiang Sin & Ors [2020] MLJU 157 345 Karuppannan a/l Ramasamy & Anor v Elizabeth Jeevamalar Ponnampalam & Ors (Sundaram a/l Marappa Goundan & Anor, interveners and Raya Realti, third party) and another appeal [2010] 1 MLJ 156 Keongco Malaysia Sdn Bhd v Ng Seah Hai [2012] 7 MLJ 288 Khaw Cheng Bok & Ors v Khaw Cheng Poon & Ors [1998] 3 MLJ 457 Kheng Chwee Lian v Wong Tak Thong [1983] 2 MLJ 320 Koh Yen Bee v. American International Assurance Company Ltd [2000] 3 CLJ 28 Kondisi Utama Sdn Bhd v Baltic Agencies Pte Ltd and another appeal [2019] 1 MLJ 181 Ktl Sdn. Bhd. v Leong Oow Lai [2014] MLJU 1405 Kumpulan Darul Ehsan Bhd v Mastika Lagenda Sdn Bhd [2017] 4 MLJ 561 Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465 Landry v. Pratt & Whitney Canada [1996] 8 W.W.R. Lau Song Seng & Ors v Public Prosecutor [1998] 1 SLR 663 346 Lee Hark Lam & Ors v Kebun Rimau Sdn Bhd & Anor [2016] 6 MLJ 751 Lee Kuan Yew v Chin Vui Khen & Anor [1991] 3 MLJ 494 Letchumanan Chettiar Alagappan @ L Allagappan (sebagai pelaksana wasiat/executor kepada SL Alameloo Achi alias Sona Lena Alamelo Acho, si mati) & Anor v Secure Plantation Sdn Bhd [2017] MLJU 379 Lim Guan Eng & Anor v Ganesan a/l Narayanan [2017] MLJU 1898 Lionex (M) Sdn. Bhd. v Allen Lim Lai Wah & Ors [2016] MLJU 967 Loh Holdings Sdn Bhd v Peglin Development Sdn Bhd & Anor [1984] 2 MLJ 105 M Concept Sdn Bhd v Berjaya Times Square Sdn Bhd [2004] 4 MLJ 556 Mak Khuin Weng v Melawangi Sdn Bhd [2016] 5 MLJ 314 Malayan Banking Bhd v KM Music Lines Sdn Bhd [2015] 5 MLJ 533 Megnaway Enterprise Sdn Bhd v Soon Lian Hock (sole proprietor of the firm Performance Audio & Car Accessories Enterprise) [2009] 3 MLJ 525 347 Merbok Hilir Bhd v Sheikh Khaled Jassem bin Mohammad Jassem Al-Thani (t/a Petroserv General Trading Establishment) and other appeals [2013] 5 MLJ 407 Merkur Island Shipping Corp v Laughton and others [1983] 1 All ER 334 Mirzan Bin Mahathir v Star Papyrus Sdn Bhd [2000] 6 MLJ 29 Mohd Shukri bin Mat (sebagai pentadbir harta pusaka Wan Mek binti Wan Abdullah@Wan Eshah bin Wan Abdullah) v Wan Rahmah binti Wan Abdullah (sebagai pentadbir harta pusaka Wan Abdullah bin Wan Ahmad) [2017] MLJU 2026 MRA International Sdn Bhd v SPC Diatech, LLC at [2018] MLJU 107; [2018] 1 LNS 136 Motordata Research Consortium Sdn Bhd v Ahmad Shahril Abdullah & Ors [2017] 1 LNS 1142 Muniyandi A/L Periyan & Anor v Eric Chew Wai Keat & Anor [2003] 3 MLJ 527 National Feedlot Corp Sdn Bhd & Ors v Public Bank Bhd [2018] MLJU 766 Ng Yee Fong & Anor v E.W. Talalla [1986] 1 MLJ 25 348 OBG Ltd and another v Allan and others Douglas and others v Hello! Ltd and others (No 3) Mainstream Properties Ltd v Young [2008] 1 AC 1 Omega Securities Sdn Bhd v Kok Fook Loy [2010] 9 MLJ 224 Pedley v Majlis Ugama Islam Pulau Pinang & Anor [1990] 2 MLJ 307 Penerbitan Pelangi Sdn Bhd v Pan Alliance Sdn Bhd And Other Actions [1999] 4 MLJ 369 Perunding Alam Bina Sdn Bhd v Errol Oh & Ors [1999] 6 MLJ 101 Playing Cards (Malaysia) Sdn Bhd v China Mutual Navigation Co Ltd [1980] 2 MLJ 182 Popular Industries Ltd. v. The Eastern Garment Manufacturing Co. Sdn. Bhd. [1990] 2 CLJ Rep 635 Positive Well Marketing Sdn Bhd v OKA Concrete Industries Sdn Bhd [2014] 10 MLJ 385 Public Prosecutor v Hassan Jafarpour [2019] 5 MLJ 350 Quality Concrete Holdings Bhd v Classic Gypsum Manufacturing Sdn Bhd & Ors [2012] 2 MLJ 521 349 R v Hopkins (1915) 20 CLR 464 Raub Australian Gold Mining Sdn Bhd (in creditors’ voluntary liquidation) v Hue Shieh Lee [2019] 3 MLJ 720 Ray v Classic FM plc [1998] All ER (D) 105 Re Coroin Ltd (No 2); McKillen v Misland (Cyprus) Investments Ltd and others [2013] 2 BCLC 583 Real Electronics Industries Singapore (Pte) Ltd v Nimrod Engineering Pte Ltd (T Vimalanathan, third party) [1996] 1 SLR 336 Regent Decorators (M) Sdn. Bhd. & Anor. v. Michael Chee & Ors. [1984] 2 MLJ 78 RHB Bank Bhd (substituting Kwong Yik Bank Bhd) v Kwan Chew Holdings Sdn Bhd [2010] 2 MLJ 188 Rochdale Canal Company v King (1851) 2 Sim NS 78 Rookes v Barnard [1964] AC 1129 S Pakianathan v Jenni Ibrahim [1988] 2 MLJ 173 350 Saiman Bin Umar v Lembaga Pertubuhan Peladang and another appeal [2015] 6 MLJ 492 Saltman Engineering Co., Ltd. And Others v. Campbell Engineering Co., Ltd.

65 RPC 203 Sarawak Energy Berhad & Anor v. Peter Kallang & ors [2016] 1 LNS 1072 Schmidt v Schmidt [1969] QWN 3 Seacera Group Berhad v Dato' Tan Wei Lian & Ors [2019] 1 LNS 762 Selangor Industrial Corporation Sdn Bhd v Kesuma Murni Sdn Bhd (dahulunya dikenali sebagai Wawasan Bina Murni Sdn Bhd) & Ors [2016] MLJU 1087 Shen & Sons Sdn Bhd v Jutawarna Development Sdn Bhd & Ors [2016] 7 MLJ 183 Silkin v Beaverbrook Newspapers Ltd [1958] 1 WLR 743 Simpson Wong v Vas Car Auto Parts Sdn Bhd & Ors and another case [2017] MLJU 355 Siti Aisha binti Ibrahim v Goh Cheng Hwai [1982] 2 MLJ 124 351 SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 Sukatno v Lee Seng Kee [2009] 3 MLJ 306 Sunrise West Sdn Bhd & Ors v Pravin Mahtaney Ramchand & Anor [2012] 1 MLJ 414 Superintendent of Land and Survey (4th Div) v Hamit bin Matusin [1994] 3 MLJ 47 Syed Husin Ali v Sharikat Penchetakan Utusan Melayu Berhad & Anor [1973] 2 MLJ 56 Tan Hui Nee @ Tan Gwee Lian & Satu Lagi v. Central Sugars Refinery Sdn Bhd [2011] 1 LNS 1647 Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697 Tenaga Nasional Bhd v Guan Heng Plastic Industries Sdn Bhd [2013] 7 MLJ 888 Tenaga Nasional Bhd v Panareno Sdn Bhd (Vital Projects Sdn Bhd, third party and Semantra No-dig Engineering Sdn Bhd, fourth party) [2018] MLJU 2003 352 The Board of Trustees of the Sabah Foundation & Ors v Datuk Syed Kechik bin Syed Mohamed & Anor [1999] 6 MLJ 497 Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 Tjanting Handicraft Sdn Bhd & Anor v. Utusan Melayu (Malaysia) Sdn Bhd & Ors [2001] 3 CLJ 571 Tony Pua Kiam Wee v Government of Malaysia and another appeal [2019] 12 MLJ 1 TOP-A Plastik Sdn Bhd & Ors v. Bumiputra Commerce Bank Bhd [2006] 3 CLJ 460 Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106 UDA Holdings Bhd (formerly known as Perbadanan Pembangunan Bandar) v Melewar Leisure Sdn Bhd (formerly known as Harta Bumi Sdn Bhd) [2009] 2 MLJ 408 UEM Group Bhd (previously known as United Engineers (M) Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2018] supp MLJ 363 Vitof Ltd v Altoft [2006] EWHC 1678 Wee Shuo Woon v HT Sri [2017] SGCA 23 353 Welds (by his mother and litigation friend) v Yorkshire Ambulance Service NHS Trust and another 155 BMLR 101 Wong Thin Yit v Mohamed Ali [1971] 2 MLJ 175 Worldwide Rota Dies Sdn Bhd v Ronald Ong Cheow Joon [2010] 8 MLJ 297 Yeoh Tai Chuan & Anor v Tan Chong Kean [2016] 4 MLJ 769 Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810 Yian Sdn Bhd v Datuk Bandar Kuala Lumpur & Anor [1998] 5 MLJ 550 Zung Zang Wood Products Sdn Bhd & Ors v Kwan Chee Hang Sdn Bhd & Ors [2012] 5 MLJ 319 Legislation: Contract Act 1950, ss 29 & 158 Copyright Act 1987, ss 3, 7, 13, 26, 36, 37 & 42 Defamation Act 1957, s 9 354 Evidence Act 1950, ss 60(3), 91, 92, 101, 102, 103, 114(g) & 146(a) Limitation Act 1953, s 6 Rules of Court 2012, O. 1A, O. 2 r. 1, O. 3 r. 5, O. 15 r. 2, O. 34 r. 2, O. 78 r. 3(2) & O. 92 r. Trade Marks Act 1976 (Repealed), s 10 Trademarks Act 2019, s 23 Other sources: Ananda Krishnan’s Words, Phrases & Maxims, Legally & Judicially Defined, Volumes 10 & 12, Lexis Nexis, 2008 Cambridge Dictionary at https://dictionary.cambridge.org/dictionary/english/simulate and https://dictionary.cambridge.org/dictionary/english/possess Clerk & Lindsell On Torts, Eighteenth Edition, Sweet & Maxwell, 2000 Fowler H. W., Fowler F. G. & Thompson D., The Concise Oxford Dictionary of Current English (9th Edition), Clarendon Press, 1995 355 Gatley on Libel and Slander, 6th (1967) and 11th (2008) editions, Sweet & Maxwell Halsbury’s Laws of Malaysia – Agency, Volume 1(2), Fourth Edition Reissue, LexisNexis, 2002 Halsbury’s Laws of England – Agency, Fifth Edition, Volume 1(2), LexisNexis Butterworths, 2008 Halsbury’s Laws of Malaysia – Agency, Volume 4 (2013 Reissue) Halsbury’s Laws of Malaysia – Evidence, Limitation of actions, Volume 21, LexisNexis, 2011 Halsbury’s Laws of Malaysia – Intellectual Property, Volume 22 (2013 Reissue), LexisNexis, 2013 Halsbury’s Laws of Malaysia – Tort, Volume 13(2) Reissue, Marsden Law Book, 2017 Khaw Lake Tee and Tay Pek San, Khaw On Copyright Law In Malaysia, Fourth Edition, Lexis Nexis, 2017