Najd Al-Atheer Trading Co v Biomax Resources Sdn Bhd (BA-22NCvC-232-06/2023)

This is the Plaintiff’s action against the Defendant arising from a commercial transaction involving the supply of nitrile gloves. The Plaintiff seeks, inter alia, the refund of an alleged deposit paid for three

undelivered containers of gloves and damages arising from the alleged defective and poor quality of six (6) containers of gloves that had been delivered.

The Defendant resists the Plaintiff’s claim and counterclaims for forfeiture of the deposit, contending that the Plaintiff had repudiated the 01/04/2026 09:14:40 BA-22NCvC-232-06/2023 Kand. 64 contract due to a collapse in market prices in Saudi Arabia, and that the Plaintiff failed to prove any defects or losses.

Having considered the pleadings, the documentary evidence, the testimony of the witnesses, and the written submissions of both parties, this Court now delivers its Grounds of Judgment. B.

The Plaintiff is a trading company based in the Kingdom of Saudi Arabia engaged in the importation and distribution of medical gloves. The Defendant is a Malaysian company engaged in the manufacture and supply of gloves.

The parties entered into a series of transactions pursuant to Proforma Invoices issued by the Defendant for the supply of nine (9) containers of gloves.

It is not disputed that six (6) containers were delivered and paid for in full. It is also not disputed that the remaining three (3) containers were not delivered, for which the Plaintiff had paid a deposit.

The Plaintiff alleges that the Defendant failed to deliver the remaining three (3) containers and that the gloves delivered were defective and of poor quality, causing the Plaintiff to suffer losses.

The Defendant contends that the Plaintiff failed to provide booking details for the remaining shipments due to a sharp fall in market prices and that the Plaintiff’s allegations of defects are unsubstantiated. C.

The issues for determination are as follows:

Whether the deposit paid for the three (3) containers amounts to USD56,252.00 or USD55,246.95;

(ii) Whether the Defendant is obliged to refund the deposit to the Plaintiff;

(iii) Whether the six (6) delivered containers of gloves were defective and/or of poor quality;

(iv) Whether the Plaintiff suffered losses as a result of the alleged defects; and

Whether the Defendant is entitled to forfeit the deposit. D. ISSUE 1: QUANTUM OF DEPOSIT

The Plaintiff contends that the total deposit paid amounts to USD56,252.00, calculated by deducting the value of the delivered containers from the total payments made.

The Defendant disputes this figure and contends that the actual deposit received is USD55,246.95 after taking into account bank charges on international transfers.

The Defendant relies on contemporaneous commercial invoices and proforma invoices to demonstrate the actual sums received.

This Court finds that the Defendant’s calculation based on contemporaneous documents is more reliable. International transfers are subject to bank charges, and the Plaintiff has not rebutted the Defendant’s documentary evidence.

Accordingly, this Court finds that the deposit paid amounts to USD55,246.95. E. ISSUE 2: NON-DELIVERY OF THE THREE (3) CONTAINERS AND

It is common ground that the remaining three (3) containers were not delivered. The dispute concerns the reason for the non-delivery.

The Plaintiff alleges that the Defendant failed to confirm shipment dates despite repeated requests, amounting to a breach of contract.

The Defendant contends that the Plaintiff failed to provide booking details and subsequently instructed the Defendant to stop manufacturing due to a sharp drop in market prices in Saudi Arabia.

The Defendant relies on contemporaneous emails dated 23.08.2021 and 25.08.2021 wherein the Plaintiff expressly stated that glove prices had fallen sharply and requested the Defendant to stop production.

This Court finds the Defendant’s version of events to be more probable. The contemporaneous emails clearly demonstrate that the Plaintiff decided not to proceed with the remaining shipments due to commercial considerations.

The Court is guided by the principle that parties are bound by the terms of their contract and commercial hardship does not excuse performance.

Accordingly, this Court finds that the Plaintiff had repudiated the contract in respect of the remaining three (3) containers. F. ISSUE 3: WHETHER THE GLOVES WERE DEFECTIVE AND/OR OF

The Plaintiff alleges that the gloves delivered were defective and of poor quality, causing adverse reactions among users and attracting regulatory action by the Saudi Food & Drug Administration (SFDA).

The Plaintiff relies on a letter from the SFDA and internal records to support its allegations.

The Defendant denies the allegations and contends that the Plaintiff failed to prove that the Defendant was the causa causans of the alleged defects.

The Defendant further submits that no independent inspection report, expert evidence, or samples were produced to substantiate the allegations.

This Court notes that the burden of proof lies on the Plaintiff pursuant to Sections 101 and 102 of the Evidence Act 1950.

The Court is guided by the principles in Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon [2006] 2 CLJ 1 and Nautilus Tug & Towage Sdn Bhd v Nautical Supreme Sdn Bhd [2025] CLJU 194 that the Plaintiff must establish that the Defendant’s conduct was the effective cause of the alleged loss.

The SFDA letter relied upon by the Plaintiff is not a conclusive finding of defects but merely a request for investigation. No expert testimony was adduced to establish manufacturing defects.

In Bergamo Development (M) Sdn Bhd v ECK Development Sdn Bhd [2018] 5 MLRH 369, the Court emphasised that allegations of defects must be supported by cogent documentary and photographic evidence.

In the present case, the Plaintiff produced only limited photographic evidence and no independent inspection report.

Accordingly, this Court finds that the Plaintiff has failed to prove, on a balance of probabilities, that the gloves delivered were defective and that the Defendant was the causa causans of the alleged defects. G.

The Plaintiff claims losses amounting to USD197,263.00 on the basis that the gloves were sold below cost and that the Plaintiff suffered reputational damage.

The Defendant contends that the Plaintiff failed to strictly prove its losses and that no documentary evidence such as sales invoices, delivery orders, or customer complaints were adduced.

The Court is guided by the decision in Child N (claiming through her father) & Ors v Kerajaan Malaysia [2022] 1 MLJ 666, which reiterated that special damages must be specifically pleaded and strictly proven.

The Plaintiff relied on internal ERP records to substantiate its claim. However, such records are self-serving and were not corroborated by independent evidence.

In the absence of documentary proof and corroborative evidence, this Court finds that the Plaintiff has failed to strictly prove its alleged losses.

While the Court is mindful of the principle in Nirwana Construction Sdn Bhd v Pengarah Jabatan Kerja Raya Negeri Sembilan Darul Khusus & Anor [2008] 4 MLJ 157 that damages should not be refused merely because they are difficult to quantify, the Plaintiff must first establish that it has suffered loss.

In the present case, the Plaintiff has failed to discharge this burden. H. ISSUE 5: WHETHER THE DEPOSIT IS REFUNDABLE OR

The Plaintiff contends that the Defendant must refund the deposit on the basis of unjust enrichment and breach of contract.

The Defendant contends that it is entitled to forfeit the deposit due to the Plaintiff’s repudiation of the contract.

The Defendant relies on Cubic Electronic Sdn Bhd v Mars Telecommunications Sdn Bhd [2019] 6 MLJ 15, Cardigan Guards Sdn Bhd v Kerajaan Malaysia [2014] 11 MLJ 813, and Morello Sdn Bhd v Jaques (International) Sdn Bhd [1995] 1 MLJ 577 to support the proposition that a deposit may be forfeited even in the absence of an express forfeiture clause, provided the amount is reasonable.

The Plaintiff relies on Intergos Spolka Z Organiczona Odpowiedzialnosca v Xfyre (M) Sdn Bhd & Anor [2022] 9 CLJ 418 and Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453 to argue that retention of the deposit would amount to unjust enrichment.

This Court finds that the Plaintiff had repudiated the contract and that the Defendant was not in breach in respect of the remaining three (3) containers.

The deposit of USD55,246.95 represents less than ten per cent (10%) of the total value of the remaining shipments. In the circumstances, the amount is reasonable and proportionate.

Accordingly, this Court finds that the Defendant is entitled to forfeit the deposit. I.

The Defendant challenged the Plaintiff’s witness on the basis of hearsay and lack of personal knowledge.

The Plaintiff relied on Kuwait Finance House (M) Bhd v JRI Resources Sdn Bhd & Ors [2021] 12 MLJ 798 and Aznum Abdul Rahman v Ghazali Ahmad & Anor [2021] 9 CLJ 121 to support the admissibility of corporate witness testimony based on contemporaneous records.

This Court accepts that corporate witnesses may testify based on company records. However, the weight to be accorded to such evidence depends on corroboration and reliability

In the present case, the Plaintiff’s witness evidence was largely uncorroborated and insufficient to discharge the Plaintiff’s burden of proof. J.

For the reasons stated above, this Court finds as follows:

The deposit paid amounts to USD55,246.95;

The Plaintiff repudiated the contract in respect of the remaining three (3) containers;

The Plaintiff failed to prove that the gloves delivered were defective or of poor quality;

The Plaintiff failed to prove its alleged losses; and

The Defendant is entitled to forfeit the deposit.

Accordingly, the Plaintiff’s claim is dismissed with costs. The Defendant’s counterclaim is allowed with costs.

Interest is awarded at the rate of five per cent (5%) per annum on the costs from the date of judgment until realisation. Dated this 17th March 2026 -sgd- ………………………………….. Datin Asmah binti Musa Pesuruhjaya Kehakiman Mahkamah Tinggi Malaya Mahkamah Tinggi Shah Alam Counsel for Plaintiff : Mr. Dinesh Nandrajog Messrs. Nandrajog Counsel for Defendant : Mr. Julian Lee Chun Hong Messrs. Ramesh K. Supramaniam r