Mudajaya Corporation Berhad v Thb Power Sdn Bhd (WA-28NCC-187-02/2025)

My judgement concerns a winding up Petition based on an adjudication decision in favour of the petitioner and evidence of non‑payment for sums due. The Respondent resists the petition mainly, that the debt is bona fide disputed and a settlement agreement superseded the adjudication decision. Furthermore, the Respondent stated that the petitioner has engaged in concealment and misrepresentation in the petition through related affidavits by disclosing without prejudice communications in a manner that has prejudiced the court and amounted to an abuse of process. Brief Introduction.

2.

Despite the Petitioner having carried out the works pursuant to the Letter of Award and Supplementary Agreement, the Respondent failed to make payments to the Petitioner for the work done as certified under the interim payment certificates (“IPC”).

As a result, the Petitioner commenced an adjudication proceeding under the Construction Industry Payment and Adjudication Act 2012 and a decision was delivered on 25.4.20243 in favour of the Petitioner. In an effort to resolve the matter amicably, the parties subsequently entered into a Settlement Agreement dated 8.4.2024.

The settlement agreement was followed by a supplemental settlement agreement dated 8.10.2024 in which the parties recorded an agreed Balance Outstanding Sums in two parts and fixed dates for payments to be made. The agreement fell through as the Respondent failed to adhere to the terms of the agreement.

The Petitioner through its solicitors, served a statutory notice of demand dated 3.1.202512 namely the 466 Notice pursuant to the

During the court hearing, the Respondents asserted that there were computational errors and maintains the debt asserted in the petition is disputed in substance and law.

In addition, Newfields and two other creditors have formally opposed the petition stating that they are the largest single group of creditors and represent a majority in value of the Respondent’s known creditors.

The Respondent and the opposing creditors contend that a winding up would harm a major national infrastructure contract namely the “Gurun Power Plant Project”, in which the Respondent is a controlling participant and that rescues / funding discussions are in progress.

Since the Court’s power under the statutory scheme is discretionary and this Court will take into account the following: -

whether there is a bona fide dispute on substantial grounds;

the wishes of the majority of creditors and the commercial prospects of the company continuing as a going concern; and

the public interest where a winding up order would have adverse public consequences. Bona fide dispute.

When the supplemental settlement agreement was written and negotiated, accounting records and spreadsheets were available as issues were discussed before validation by both the parties. On the face of the records, all documentary materials were revealed to the parties at the time of signature for a settlement.

The Respondent’s contention that the agreement contains computational errors is advanced belatedly, specifically after the statutory demand was issued to the Respondents. Now, the Respondent, rests principally on a bona fide dispute demonstrating alternative calculations rather than contemporaneous evidence of a prior mutual intention.

In my opinion, this petition was filed on a contractual amount, originally recorded in an adjudication process, that cannot be defeated automatically by later assertions of computational error or miscalculations without substantial grounds.

Based on the materials before me, I am not satisfied that there is a bona fide dispute of debt on such substantial grounds as to require dismissal of the petition. To resist a winding up petition successfully on the ground of a bona fide dispute, the respondent must demonstrate a real and substantial contest on the merits.

The Respondent’s assertions of dispute are general and on the evidence, not supported by credible testimony that would show a real prospect of the adjudication being overturned or the debt being discharged. The alleged defences are, therefore, insufficient to raise a bona fide dispute which would defeat the petition. Bank Utama (Malaysia) Berhad v GKM Amal Bhd [2000] 2 CLJ 525 Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817 BMC Construction Sdn Bhd v Dataran Rentas Sdn Bhd [2001] 1 MLJ 356

I accept, that generally Winding-Up petitions exerts pressure, as any legitimate enforcement proceeding will. However, on the evidence before this court, the petitioner here, has a legitimate claim under the adjudication decision and has sought the appropriate remedy. There is no sufficient evidence that the petition was instituted for an improper collateral purpose or that it is an abuse of the court’s process. Abuse of process requires clear proof that the petition seeks to exploit the court’s procedures for an improper purpose.

Having considered all the evidence before me, this court is satisfied that the respondent has failed to pay the adjudicated sums and has not demonstrated a credible ability or proposal to discharge the liability in a manner that would render the petition unnecessary. The respondent’s assertions that payment proposals were to be made in instalments are not shown to be capable of immediate implementation so as to remove the need for the remedy sought. Newfields and the other opposing Creditors.

The Opposing Creditors have placed much emphasis that the “Gurun Power Plant Project”, will be terminated, in the event the Respondent is wound up.

This court is in the view that the termination of the “Gurun Power Plant Project” is not and ought not to be the relevant inquiry in this winding up petition. It is trite law that any relevant inquiry in a winding-up petition is whether the company is insolvent in the commercial sense and or whether it can meet its debts as they fall due.

The mere fact that the company has unfinished or ongoing projects is not sufficient grounds to resist a winding-up order once insolvency is established.

Furthermore, the Opposing Creditors have failed to produce any evidence whatsoever to demonstrate that the Respondent has the sufficient funds to execute the “Gurun Power Plant Project” right through to the completion.

In my opinion, since the Respondent is unable to pay its debts and in the interests of the public importance, as well as the Respondent’s creditors as a whole, the Respondent must be restrained from continuing to trade and/or carry on its business.

Furthermore, from the evidence before this court, the shareholders of the Respondent had also provided Guarantee and Indemnity dated 22.10.2020 to Newfields, promising the repayment of the loan sum obtained pursuant to the Moneylending Agreement, therefore rendering, Newfields to a more ‘secured’ avenue to recover the loan sum in the event of a winding up order is granted by this court.

This court concludes that the presence of secured creditors and a potential large public interest does not outweigh the Petitioner’s prima facie entitlement where an undisputed large debt remains unpaid and where the Respondent has failed to show immediate means of payment and has not provided concrete, binding rescue financing. Cetico Sdn Bhd v The Tropical Veneer Co Bhd [1988] 2 MLJ 665 Arab Malaysian Merchant Bank Bhd v Orient Apparel Bhd [1999] MLJU 118

Additionally, in the case of Globalmariner Offshore Services Sdn Bhd & Ors v TH Heavy Engineering Bhd (in creditors’ voluntary liquidation) & Ors and another case Justice Ong Chee Kwan (as His Lordship then was) decided that :- “[105] The Court shall also have regard to the wishes of the creditors. However, the views of creditors must be regarded in such a manner that will accord with the general principles of fairness and commercial morality, which underlie insolvency law. [106] Generally, the court should grant a compulsory winding up order if the majority of the creditors so wish, even if the company is under voluntary liquidation. However, to facilitate fairness and commercial morality, the Court should have regard to the views of independent creditors in cases where the majority creditors are related to the wound-up company or the management of the company. Where inter-company transactions require special scrutiny, the court may take into account the fact that the creditor is not an independent creditor. This would prevent independent creditors from being left with a strong legitimate sense of grievance.” [emphasis added] Therefore, Newfields is a secured creditor, and has the avenue to recover the debt through means of the securities given beforehand, by the Respondent. Disclosure of “without prejudice communications”.

The Petitioner’s pleadings disclose the adjudication decision as well as setting out the Respondent’s failure to repay the amount due and payable. The Respondent has not established allegations of deliberate concealment by the Petitioner or any intentional misrepresentation borne out on the evidence before this court.

In addition, the Respondent objects to the Petitioner’s reference to and production of communications said to be without prejudice, arguing that their disclosure was improper and likely to produce unconscious bias in the court. Communications marked without prejudice are generally privileged to encourage settlement discussions. In my view, that privilege may be defeated in objective or waived, if the communications are placed in evidence or relied upon to prove the terms of a concluded agreement, or if a party elects to waive privilege.

On the facts, the documents in question were exhibited and relied upon by both the parties in their affidavits. The Petitioner’s placing of these communications before the court in the context of contesting payment and the Respondent’s own reliance upon settlement arrangements resulted in the issues contained in those communications, being appropriately exposed before this court for determination of the parties’ rights. In any event, the material so disclosed was not the sole or decisive basis for the court’s conclusion. Any risk of unconscious bias is therefore not of such a degree as to disqualify the court from hearing and deciding the petition fairly.

Even though the Respondent has an arguable claim to contest certain elements of the Supplemental Agreement’s calculations, the Respondent has nevertheless admitted the undisputed sum much earlier, during the negotiations. That admission of the unpaid sum, satisfies the statutory threshold together with the presumption of inability to pay, which is not rebutted before the court.

For the above reasons. I find the following and allow Enclosure 1 with cost: - a. That the Respondent has not demonstrated a bona fide dispute on substantial grounds sufficient to defeat the petition. b. That the Respondent has not established that the adjudication decision was effectively or validly superseded such that enforcement by way of winding up is barred. c. The allegations of concealment, misrepresentation and abuse of process are not established on the evidence to the degree required to deny the relief sought. d. The references to without prejudice communications do not render the proceedings unfair or taint this court’s ability to decide the petition impartially.

This petition for winding up, has been heard together with the competing notice of motion to appoint private liquidators and the central issues are as follows: -

whether the nominees of the Petitioner are suitable and should be appointed as joint and several liquidators in the event the Respondent is wound up; and

whether any objection raised by the opposing creditors to those nominees is well founded so as to displace the Court’s preference for the Petitioner’s choice. Facts and Issues before this Court 32. The material facts, before this court, are as follows:

the Petitioner claims, an unsecured debt of RM52,671,401.55 owing to the Petitioner and the Petitioner consequently stands out as the largest unsecured creditor on the Respondent’s own admission;

subsequent to the filing of the winding up petition, the Respondent “caused payment” of RM27,329,790.51 to be made in partial satisfaction of its obligation to the Petitioner. That portions of payments were funded by other opposing creditors, including transfers by Newfields and payments by Tengku and Koay, with the knowledge of the parties.

the Petitioner’s proposed liquidators possess direct and specialised experience relevant to the Respondent’s business. notably, power plant construction, operation and related overseas subcontractor and supplier matters. In addition, the Petitioner’s nominees have put forward a clear team and resources to carry out the liquidation.

On the other hand, the nominees of the opposing creditor, Newfields, are experienced insolvency practitioners with relevant prior engagements, including cross-border and marine-related windings, and have indicated willingness to act.

Nevertheless, both sets of nominees have consented to remuneration in accordance with Table C of the Second Schedule to the Companies (Winding-Up) Rules 1972. Governing principles 33. In appointing a liquidator, the Court must exercise its discretion to promote the interests of the general body of creditors and to secure an efficient, economical and impartial administration of the estate. The Court will have regard to:

the wishes of creditors, particularly where a secured creditor is making a legitimate choice;

the independence of the proposed liquidator, both in fact and as perceived by the reasonable observer;

the relevant expertise, resources and availability of the proposed liquidator to undertake the particular liquidation; and

any conduct of parties which may render a proposed nominee inappropriate to protect the integrity of the process.

MCC Overseas (M) Sdn Bhd v TYL Land & Development Sdn Bhd (Sabah Development Bank Bhd, applicant) and another case [2020] MLJU 2522.

Discretion under section 477(1)(c) of the Companies Act 2016

Abdul Rahman bin Ismail v Pembangunan Qualicare Sdn

However, this court is not bound to appoint the nominee of the majority creditor where other factors show that appointment would not be in the best interests of creditors as a whole. The post-petition payment to the Petitioner of RM27,329,790.51 is an issue for the Court’s substantive discretion and does not per se render the Petitioner’s nominee’s incapable of acting.

The validity or otherwise of that disposition is a matter for the Court to determine at the appropriate stage and it is not a ground that automatically disqualifies the Petitioner’s nominees from appointment. In this case, the payment was made with the knowledge of the Respondent and other opposing creditors and formed part of a negotiated settlement process, the receipt of that payment does not demonstrate lack of independence on the part of the Petitioner’s nominees. Furthermore, the payment was made purely for the work done by the Petitioner, which had been long outstanding and was received with good and honest intention as the Respondent’s proposed settlement of debts by two instalments. [Federal Court’s case of Wong Wee Kheong & Anor v Daya Bersama Sdn Bhd & Other Appeals [2013] 3 MLJ 313]

There is no cogent evidence before this Court that the Petitioner’s proposed liquidators lack independence or would not act impartially. The mere fact that the Petitioner received a post-petition part-payment does not, of itself, establish a real risk of bias. No documentary or testimonial material has been produced to show that the Petitioner’s nominees have any inappropriate personal or financial relationship with the Respondent that would compromise their independence. In the absence of such evidence, the Court must accept the nominees as independent and fit to act, subject to the Court’s continuing supervisory jurisdiction.

Although deference is normally given to the wishes of the majority creditor, this Court must be satisfied that the claim relied upon to justifies that preference, is soundly established. The Court notes the presence of material inconsistencies and the late emergence of contingent or additional debt claims said to be owed to entities existing within the opposing creditor group.

Moreover, significant portions of the post-petition instalment were funded or processed by parties within the opposing creditor’s group, undermining their present contention that the instalment constituted a void disposition by the Petitioner acting improperly.

On the admitted indebtedness to the Petitioner and the evidential uncertainty surrounding parts of Newfields’ asserted claims, the Court is not persuaded that the mere fact that Newfields is a secured creditor requires the Court to accede to Newfields’ nomination.

The Petitioner’s nominees have demonstrated specialised knowledge and experience in matters directly relevant to the Respondent’s operations, mainly completion in handover of a power plant constructed under complex arrangements with foreign subcontractors and equipment suppliers, management of warranty and handover disputes, settlement of liabilities on receipt of payment, and related cross-border contractual and employment matters.

Petitioner has set out a concrete team structure and confirmed resources sufficient to manage the liquidation in an expedient manner. This Court places significant weight on the demonstrable relevance and nearness of that expertise because the effective preservation and realisation of the Respondent’s assets, which include, project assets, sale proceeds and overseas interests, will be an advantage.

I am mindful of the obligation to avoid rewarding tactical or inconsistent conduct that would be prejudicial to the proper administration of the assets. The opposing creditor’s challenge to the Petitioner’s nominees is substantially premised upon the post-petition payment, notwithstanding that the opposing creditor and related parties were participants in and contributors to that payment and in some instances actively facilitated its processing. Conclusion 43. Balancing the abovementioned factors: - I. the Petitioner’s status as the largest unsecured creditor on the Respondent’s own admission; II. the demonstrable and relevant expertise of the Petitioner’s nominees; III. the absence of persuasive evidence that those nominees lack independence; IV. the evidential uncertainties surrounding aspects of the opposing creditor’s claimed entitlement to dictate appointment, and V. the Petitioner’s liquidators are from a large, well-established firm with requisite resources and institutional support, to efficiently undertake to carry out a large-scale liquidation. Therefore, this Court concludes that it is in the best interests of the general body of creditors and the proper administration of justice that Enc 34 is dismissed with no order as to cost. Dated : March 2026 SGD SHOBA DORAI RAJAH JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT Solicitor for the Petitioners: Harold Tan Kok Leng with AC my Hiew Kar Yi [MESSRS HAROLD & LAM PARTNERSHIP] Solicitor for the Respondent: Kenny Chan Yew Hoon with Rabiatul Adawiyah [MESSRS HARJIT SANDHU, WAN & ASSOCIATES] Solicitor for the Opposing Creditor: Wong Hin Loong Jace Lim Sher Jia [NEWFIELDS LAND SDN BHD]