P-Cube Aviation Pte Ltd v J & T International Logistics (Malaysia) Sdn Bhd (WA-27NCC-28-05/2024)

In this suit, the Plaintiff ("P") claims for the following:

RM 42,315,000.00 being the cancellation charges ("cancellation charges") for the flights not taken up by the Defendant ("D") pursuant to an aircraft charter agreement dated 12.9.2022 entered into between P and D ("ACA");

interest in the sum of RM 9,572,739.09 as at 30.4.2024; and

continuing interest at the rate of 2 % per month on the outstanding invoices from 1.5.2024 until the date of settlement.

D in turn counterclaims for a sum of RM 9,459.14, being the excess payment made by D to P in respect of P's invoice. After a full trial, I dismissed P's claim and allowed D's counterclaim. Here are my reasons. Background facts

P carries on business as an air charter service provider. D is involved in freight forwarding, warehousing and storage services. In September 2022, P and D entered into discussions for P to provide aircraft charter services to D.

D has only utilised P's charter services on 17.10.2022 to 19.10.2022. In this regard, P had issued to D an Invoice No. : PC - 2210010 dated 17.10.2022 in the sum of RM 390,000.00 for the charter services utilised by D on 17.10.2022 to 19.10.2022 ("said invoice"). D had paid to P a sum of RM 399,459.14 in respect of the charter services on 17.10.2022 to 19.10.2022.

On 20.10.2022, D requested P to suspend / cancel any charter services from 20.10.2022 onwards. This was duly recorded in P's email dated 20.10.2022 ("notice to suspend flights"). An extract from the notice to suspend flights is reproduced below.

According to D, P had accepted D's request for the suspension / cancellation of flights. This can be seen from the following:

P did not object to D's request to suspend / cancel flights from 20.10.2022 onwards. Instead, P merely requested D to look into restarting the project by 28.10.2022.

Subsequent to the notice to suspend flights, via an email on 31.10.2022, P requested D to provide a tentative date on when the project would resume, so that P could make the necessary arrangements on its end.

Further, via an email on 2.11.2022, P asked D to provide details on how the project could resume as soon as possible.

From P's contemporaneous conduct, P had accepted the suspension of the flights from 20.10.2022 onwards.

Notwithstanding the above, P commenced the present suit seeking for a sum of RM 42,315,000.00 from D as cancellation charges, pursuant to 16 invoices issued by P to D from October 2022 to October 2023. The Plaintiff's case

P's pleaded case is as follows.

Pursuant to the ACA, there was an agreement for D to charter a minimum of four flights daily.

The parties subsequently agreed to vary the said minimum guaranteed flights from four flights to one flight daily at the rate of RM 130,000.00 per flight.

P is entitled to be paid the cancellation charges which are calculated at RM 130,000.00 per flight (i.e. 100 % of the agreed charter price) multiply by 323 flights (being the number of flights for the period between 13.10.2022 to 15.10.2022 and 20.10.2022 to 31.10.2023). The Defendant's case

D submits that P is not entitled to its claim for the following reasons:

the ACA is non - enforceable against D as:- (i) the ACA was not validly executed; (ii) alternatively, the parties did not act on the terms of the ACA; and (iii) alternatively, P is estopped from relying on the ACA;

there is no obligation on the part of D to charter any guaranteed minimum flights from P. As such, P ought not to be entitled to any cancellation charges;

P's claim ought to also be dismissed as the cancellation charges are contrary to the terms of the ACA;

P's claim for the cancellation charges is an afterthought. P has waived and is estopped from insisting on the same;

P is not entitled to the cancellation charges as P has failed to prove actual loss suffered;

P is not entitled to the cancellation charges as P has failed to mitigate its losses; and

P has failed to discharge its burden of proof to claim for interest. Issues to be tried

The parties filed the following issues to be tried: "1) Whether the aircraft charter agreement no. PCCH 202209001 dated 12.9.2022 ("Aircraft Charter Agreement") was valid and binding? 2) If paragraph 1 above is in the affirmative, whether there was an agreement between the parties that the Defendant will charter a guaranteed minimum of 4 flights daily from 1.09.2022 to 31.10.2023? 3) Whether there was any agreement between the parties to vary and reduce the guaranteed minimum flights to 1 flight daily (except Sunday) at the rate of RM 130,000 from Kuala Lumpur to Kota Kinabalu to Tawau? 4) Whether there was any understanding between the Plaintiff and the Defendant to "undergo a test run period for the Plaintiff's services"? 5) Whether the Defendant is entitled to request to suspend / cancel or suspend / cancel all future charter flights commencing from 20.10.2022? 6) Whether the Defendant has suspended / cancelled future flights commencing from 20.10.2022? 7) Whether the Plaintiff has issued invoices to the Defendant? 8) Whether the Plaintiff is entitled to the reliefs sought in the Statement of Claim? 9) Whether the Plaintiff was obligated to mitigate its losses? If so, whether the Plaintiff mitigated its losses? 10) Whether the Plaintiff has suffered any actual losses? 11) Whether the Defendant is entitled to its counterclaim against the Plaintiff? 12) Whether the interest claimed by the Plaintiff is excessive and / or invalid under the law and / or tainted with illegality? 13) Whether there is any agreement between parties in relation to interest including interest rate? Defendant's statement of issues to be tried 1) Whether the Plaintiff is estopped from claiming any flight charges from 13.10.2022 to 15.10.2022 and 20.10.2022 to 31.10.2023? 2) Whether the Plaintiff is entitled to claim for cancellation charges for flights from 13.10.2022 to 15.10.2022 and from 20.10.2022 to 30.10.2023? 3) Whether the Plaintiff is entitled to claim for 100 % of the flight charges as cancellation charges from 13.10.2022 to 15.10.2022 and 20.10.2022 to 31.10.2023? 4) Whether the Plaintiff has given advance notice to the Defendant in relation to any billing? 5) Whether the Plaintiff's claims and / or reliefs are an attempt by the Plaintiff to be unjustly enriched, are misconceived, without basis, unreasonable, speculative, arbitrary, without proof and / or an afterthought? 6) Whether the Defendant has paid the Plaintiff the total sum of RM 399,459.14 in relation to the Plaintiff's invoice no. PC2210010 dated 17.10.2022? 7) Whether there is an overpayment of RM 9,459.14 by the Defendant to the Plaintiff? 8) Whether the Plaintiff is entitled to claim for interest at the rate of 2 % per month from the Defendant?"

It seems to me that the central issue in this case is whether it is legally permissible for P to recover a whopping sum of RM 42,315,000.00 from D, for flights which were never flown and never utilised by D.

It is not in dispute that the only flights actually operated were the flights on 17.10.2022, 18.10.2022 and 19.10.2022. In respect of the same, P has been paid (overpaid, according to D). In other words, P had been paid for services actually rendered.

The present dispute concerns P's attempt to claim the full charter price for 323 flights over a period of more than one year. Notwithstanding that those flights were never operated or utilised by D. It is my finding that P's claim is both factually and legally untenable.

Firstly, although P sought to rely on the ACA, the parties' contemporaneous conduct evinces that the arrangement was never operated on the terms of the ACA. Instead, the parties continued to discuss and adjust different and new rates, routes, schedules and commencement dates on an ad - hoc and commercial basis (without any reference to the ACA).

Secondly, P has failed to show any agreement between the parties that there is an obligation on D to charter minimum flights at RM 130,000.00 per flight. Accordingly, there is no basis for P to impose cancellation charges against D.

Thirdly, when D requested for the flights from 20.10.2022 onwards to be suspended / cancelled, P did not object or assert that D would be liable for cancellation charges for the remaining period. Instead, P continued to discuss the possible resumption of the arrangement, thereby acknowledging that there has been a cessation of any flight chartering service until D revisits the same.

Fourthly, even taking P's case at its highest, P's claim is inconsistent with the ACA. P's action is, in substance, a claim for penalty which is prohibited under clause 14 (c) of the ACA. Further, P's claim for 100 % cancellation charges is also inconsistent with clause 9 of the ACA, which provides that no cancellation charges are payable if flights are cancelled seven days prior to the flight. D had already requested for the flights from 20.10.2022 onwards to be suspended / cancelled. P cannot selectively rely on the ACA to impose liability, while disregarding the limits and requirements contained in the same agreement.

Fifthly, P has failed to prove that it suffered actual loss of the sums claimed. The claim, if allowed, would not compensate P for proven loss. But would instead allow P to recover the full charter price for flights which were never operated and services which were never rendered. P would be permitted to gain a windfall for services it never rendered. This is especially so when P had acknowledged and had never objected to the flights from 20.10.2022 onwards from being suspended / cancelled.

Sixthly, P has also failed to show that it had taken reasonable steps to mitigate its alleged losses. Having been informed as early as 20.10.2022 that the flights were to be suspended / cancelled, it was incumbent on P to take reasonable steps to avoid or minimise any purported loss. P cannot simply allow purported charges to accumulate for more than one year and thereafter seek to pass the entire sum to D, particularly when the flights were never operated and no corresponding services were rendered.

In the circumstances, to allow P's claim would not achieve a fair or compensatory outcome. Instead it would allow P to obtain a windfall for claims it has failed to prove. Here is my explanation. The parties did not act on the terms of the ACA; alternatively, the Plaintiff is estopped from relying on the ACA

The ACA was signed by one Wings Heong (who was the Chief Executive Officer of D at the material time) and one Syed Muhammad Hadi bin Mustafa Aljunied (who is the Managing Director of P). The parties' common seal was not affixed to the ACA. Nor was the ACA executed by two authorised officers of the parties. P argued that the ACA is not enforceable against D, as it was not executed in accordance with section 66 of the Companies Act 2016. I disagree.

Section 66 of the Companies Act 2016 only applies to the execution of documents which are required under any written law or regulations or agreements to be executed under a common seal. Here, section 66 of the Companies Act 2016 does not apply to the execution of the ACA. Since the ACA is not a document that is required under any written law or regulations or agreements to be executed under common seal.

Moreover, section 64 of the Companies Act 2016 provides that a contract may be made by a company in three ways. It preserves the principle that a contract may be made on behalf of a company by a person acting under its express or implied authority.

(See the High Court cases of Linear Consulting Sdn Bhd v Coneff Corporation Sdn Bhd [2023] 1 LNS 2370 at [36]; WRP Asia Pacific Sdn Bhd v Lee Son Hong [2024] CLJU 2926 at para [42]; and Q&A 3 of the 'Frequently Asked Questions relating to the Companies Act 2016' that was posted by the Companies Commission of Malaysia on 31.1.2017, after the commencement of the Companies Act 2016).

Nevertheless, the contemporaneous evidence shows that the parties did not act on the ACA, or did not intend to act on the ACA. In this regard, PW1 (former Business Development and Charter Manager of P), being the sole contact person from P dealing with D at the material time, admitted under cross examination that the purpose of the parties signing the ACA was to allow P to negotiate and make arrangements with the airline.

Subsequent to the signing of the ACA, neither party had acted on the ACA. This can be seen from the following:

None of the emails and WhatsApp conversation exchanged between the parties at the contemporaneous time made any mention of the ACA.

Further, despite the ACA, the parties were discussing new rates, schedule, route and commencement date, as can be seen from the following:

Despite the commencement date under the ACA stated to commence on 1.9.2022,the parties were discussing on the commencement date whereby the same was moved a number of times. The commencement date of the ACA moved from 1.9.2022 to 21.9.2022, then to 5.10.2022, then to 11.10.2022, and the flights eventually only took off on 17.10.2022.

(ii) Despite Appendix A of the ACA having set out terms in relation to the route, rate and commencement date, P was still negotiating different route, rate and commencement date in its email dated 7.10.2022.

(iii) Despite the ACA having set out the terms in relation to the rate, commencement date, route, weightage and payment terms of the flights, P was still negotiating different terms in its email dated 9.10.2022 ("P's 9.10.2022 email").

(iv) Despite the ACA having set out the terms in relation to the rates, volume / weightage of the shipments and route, the parties were still negotiating different terms in the WhatsApp messages between PW1 and D's representative on 26.10.2022.

Despite the ACA having set out the terms in relation to the rates, volume / weightage of the shipments and route, the parties were still negotiating different terms in the WhatsApp messages between PW1 and D's representative on 3.11.2022.

(vi) Despite the ACA having set out the terms in relation to the rate, route, and weightage, P was still negotiating different terms in its email dated 8.11.2022.

(vii) Despite the ACA having set out the terms in relation to the rate and weightage, the parties were still negotiating different terms in the WhatsApp messages between PW1 and D's representative on 11.11.2022 and 13.11.2022.

PW1 accepted under cross examination that between 20.10.2022 and 13.11.2022, he engaged in commercial renegotiations with D's representative, comparing P's services with Teleport, SKYX, WW Cargo Express and Malaysia Airlines.

Further, despite P's case being that the ACA was in force and to commence from 1.9.2022, P did not act on the same. P did not claim for cancellation charges from 1.9.2022 to 12.10.2022.

Following from the above, it is evident that the parties (including P) have never operated on the basis that the ACA was in force. Instead, the parties were constantly discussing and adjusting the arrangement on an ad-hoc basis. In the circumstances, it is unreasonable for P to now seek to claim based on the ACA which was never acted upon by the parties.

Even though parties signed an agreement, if they never acted on it or if they acted contrary to the agreement, the party is estopped from enforcing the strict terms of the agreement. In Perusahaan Sinar Jaya Sdn Bhd v Etiqa Insurance Bhd [2013] 8 MLJ 317 at [101], [113] and [119], the High Court held that waiver by estoppel may arise where one party, by word or conduct, represents that it will not insist on strict contractual performance, and the other party acts in reliance on that representation. The court held that the party forbearing will be bound by the waiver, and cannot thereafter set up the original strict terms of the agreement.

In Takashimaya Construction & Development Sdn Bhd & Anor v My Influx Sdn Bhd and other appeals [2020] 6 MLJ 289 at [100] and [102], the Court of Appeal held that conduct leading the other party to believe that strict contractual rights would not be insisted upon, coupled with the absence of any reservation of rights, may amount to waiver or estoppel. (See also the Federal Court case of Boustead Trading (1985) Sdn Bhd v Arab - Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 at 344-345).

In the premises, P ought to be estopped from now seeking to enforce and rely on the ACA. There is no obligation on the part of the Defendant to charter any guaranteed minimum flights from the Plaintiff. As such, the Plaintiff ought not to be entitled to any cancellation charges

P has failed to establish that there was any agreement by the parties that D is to charter any guaranteed minimum flights from P. As such, P should not be entitled to any cancellation charges.

It is P's pleaded case that the ACA originally imposed an obligation on D to charter a guaranteed minimum of four flights daily. Subsequently, the parties varied the alleged guaranteed minimum flights from four flights daily to one flight daily, except Sundays at the rate of RM 130,000.00 per flight, by way of P's 9.10.2022 email.

However, none of the correspondence (be it email or WhatsApp messages) exchanged between the parties at the contemporaneous time make any mention of any guaranteed minimum flights. Instead, the parties appear to be negotiating new terms, rates, route and schedule on an ad hoc / per flight basis. There is nothing in the ACA which states that the Defendant is required to charter a minimum of four flights daily

Crucially, there is nothing in the ACA which imposes an obligation on D to charter a guaranteed minimum of four flights daily. There is no express clause in the ACA which states that D must charter four flights daily from P.

P relies on Item 5, Appendix A of the ACA to suggest that such obligation exists. However, Item 5, Appendix A of the ACA merely uses the phrase 'guaranteed minimum of 4 flights daily', as shown below.

There is no context in which the phrase 'guaranteed minimum of 4 flights daily' was provided. I consider that it does not and cannot impose an express obligation on D to charter and pay for four flights.

I rely on the Federal Court case of The New Straits Times Press (M) Bhd v Aideah Communication Sdn Bhd [2025] 3 MLJ 240 at [38] and [47]. There, the Federal Court dealt with a situation where the agreement used the phrase 'minimum guaranteed sum'. The defendant in that case contended that the plaintiff was under an obligation to fulfil the said minimum guaranteed sum. The Federal Court rejected the defendant's contention.

The Federal Court held that the mere use of the phrase 'minimum guaranteed sum', without a specific operative provision creating such liability, was insufficient to impose an absolute and unconditional obligation on the plaintiff to fulfil any specific amount under the agreement. (See also the Federal Court case of SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 at [68]).

Similarly, in our present case, there is no operative clause in the ACA which expressly provides that:- (a) D must charter four flights daily, (b) D must pay for four flights daily regardless of whether such flights were booked, confirmed and utilised, or (c) D would be liable for the full charter price of four flights daily throughout the entire term of the ACA. In the premises, the phrase 'guaranteed minimum of 4 flights daily' is not sufficient to impose an absolute and unconditional obligation on the part of D.

It seems to me that the phrase 'guaranteed minimum of 4 flights daily' could mean that P was required to keep ready or make available a minimum of four flights daily for D to charter, if required. It does not mean that D was under a strict and compulsory obligation to charter four flights daily. There can be no agreement for the Defendant to charter a guaranteed minimum flight, as the time and date of the alleged four daily flights were never agreed

Further, there could not have been an obligation on the part of D to charter four flights daily, when the time and date of each flight were not determined in the ACA. This can be seen from Appendix B of the ACA, whereby the time and date of the alleged flights is stated to be "TBA".

During cross - examination, PW1 accepted that if Item 5, Appendix A of the ACA imposed an obligation on D to take four flights daily, there should be an agreement on the timing and date of the flights. PW1 also admitted that the timing and date of the flights were not confirmed.

In the premises, even if there was an obligation on the part of D to charter four flights daily, P has failed to prove that the material particulars necessary to give effect to such alleged obligation had been agreed. Any ambiguity in connection with the ACA must be construed against the Plaintiff

Any ambiguity concerning the interpretation of the phrase 'guaranteed minimum of 4 flights daily' must be resolved in favour of D pursuant to the contra proferentem rule. P was the drafter of the ACA and had every opportunity to make clear the meaning of the phrase. (See the Federal Court case of Icon City Development Sdn Bhd (formerly known as Sierra Peninsular Development Sdn Bhd) v Lee Kean Hwa & Ors [2025] 6 MLJ 901 at [51]; the Privy Council case of Kandasami v Mohamed Mustafa [1983] 2 MLJ 85 at 88).

I conclude that P has failed to show that there is anything in the ACA which imposes an obligation on D to charter a guaranteed minimum of four flights daily. Even if the ACA requires the Defendant to charter a minimum of four flights daily, there is no evidence to support the Plaintiff's case that there was an agreement by the parties to vary the minimum flights to one flight daily at the rate of RM 130,000.00 per flight

Even if the ACA had imposed an obligation on D to charter four flights daily, P has still failed to prove that there was any agreement by the parties to vary the same to one flight daily at RM 130,000.00 per flight. In seeking to support its allegation, P relies on its 9.10.2022 email (which is reproduced below). From:P-Cube Shaib Mahmood Sent:Sunday, 9 October, 2022 3:41 PMTo:向讯颖Cc:Reza Taib; P-Cube Charters; P-Cube Syed Hadi; Khairia Sanusi; P-Cube Accounts; Al Shiddiq; P-Cube Sharifah MuznahSubject:Re: J&TXP-Cube Aviation CollaborationAttachments:image002.jpg; image003.jpg Greetings & thank you for your confirmation in writing that we will commence on 13th October 2022. After further discussion with the airline we have received the best rate of MYR130,000 based on 18.5 tons minimum {12.5 tons to BKI & 6 tons to TWU} for KUL-BKI-TWU which will operate on D1,2,3,4,5,6 [D7 NIL]. KUL-BKI: RM5.70/kg KUL-TWU: RM6.10/kg Payment PCube will be sending advance weekly invoices to J&T for the flights. At the end of the week P-Cube will tabulate & invoice the CWT for anything exceeding 18.5 tons/flight. Please provide a point of of contact for your finance department. Operations First flight will take place on 13th October 2022 & i will forward a copy of the schedule planned for the next 2 weeks asap. Thank you & I look forward to the inaugural flight happening on the above stated date. Best Regards Shalh

I consider that P's 9.10.2022 email does not support its allegation that there has been an agreement by the parties to vary the guaranteed minimum flights from four flights to one flight daily at the rate of RM 130,000.00 per flight.

There is no mention of the ACA in the whole of P's 9.10.2022 email. The subject of the email states 'J & T x P - Cube Aviation Collaboration'.

P's 9.10.2022 email also does not refer or state that there has been an agreement for a guaranteed minimum of one flight daily. P ought not to be allowed to import words into the same.

Instead, P's 9.10.2022 email appears to merely discuss fresh commercial and operational matters in relation to the route, rate, schedule and invoicing arrangement.

Further, clause 18 (d) of the ACA expressly states that the terms of the ACA can only be modified by a written document signed and executed by both parties. Here, there is no such written document signed by the parties to vary the terms of the ACA.

P's 9.10.2022 email is not and cannot be a "written document signed and executed by both parties or their authorised representatives" for the purposes of clause 18 (d) of the ACA. Since:- (a) P's 9.10.2022 email was never signed and executed by the parties; and (b) P's 9.10.2022 email makes no mention of the ACA.

Where a contract provides for a specific mode of variation, that mode must be strictly followed. (See the Court of Appeal case of Lim Ban Kay @ Lim Chiam Boon v Kilang Kelapa Sawit Morib Sdn Bhd dan satu lagi guaman civil [2015] MLJU 2179 at [15] - [16]).

P relies on clause 3 (a) of the ACA, which is reproduced below.

CHARTER SCHEDULE, ROUTE AND AIRCRAFT

The Provider shall provide the Charter Flight as per the schedule, route and aircraft type stipulated in Appendix B of this Agreement. The schedule, route and aircraft type may change as mutually agreed by the Parties.

The Parties may mutually agree to revise the schedule prior to the flight upon terms as mutually agreed by the Parties.

Whilst clause 3 (a) of the ACA states that the schedule, route and aircraft type may change as mutually agreed by the parties, the said clause only deals with variation of schedule, route and aircraft type stipulated in Appendix B of the ACA. It does not deal with variation of any alleged 'guaranteed minimum of 4 flights daily', the rate of the flights or the weightage of the flights. Which is what P alleges had been varied pursuant to P's 9.10.2022 email.

In the circumstances, P has failed to prove there was an agreement by the parties to vary the guaranteed minimum flight from four flights to one flight daily at the rate of RM 130,000.00 per flight. Accordingly, P's claim for the cancellation charges premised solely on such alleged agreement ought to be dismissed. The Plaintiff's claim ought to also be dismissed as the cancellation charges is contrary to the terms of the ACA

Even if:- (a) P is entitled to rely on the ACA; and (b) there is an obligation for D to charter minimum flights, P's action is still unsustainable as it is contrary to the ACA itself. P's action is, in substance, a claim for cancellation charges / penalty which is prohibited under clause 14 (c) of the ACA. P's claim for cancellation charges is inconsistent with clause 9 of the ACA.

P's claim in the present suit is not a claim for flights which were actually flown or for services actually rendered by P to D. Instead, P's claim in the present suit is premised on cancellation charges for the alleged guaranteed minimum flight which were never flown or never utilised by D. In other words, P is seeking to penalise D for not utilising the alleged guaranteed minimum flight.

However, it is expressly stated in clause 14 (c) of the ACA that D shall not be liable for any consequential, incidental, indirect, punitive or special damages, including commercial loss and lost profits arising directly or indirectly under the ACA. As such, P's action which is, in substance, a claim for penalty ought to be dismissed as the same is prohibited under clause 14 (c) of the ACA. (See the Federal Court case of CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1 at [19], [26], [30] - [32]).

Further, P's claim is also inconsistent with clause 9 of the ACA (which is reproduced below). The Charterer is entitled to cancel the Guaranteed flights but shall provide written notice with a minimum period of six (6) working days to the Provider. The following penalties shall be paid by the Charterer to the Provider If :

10% of the charter price, if cancelled 6 days prior to flight performance;

20% of the charter price, If cancelled 5 days prior to flight performance;

50% of the charter price, if cancelled 3 days prior to flight performance; and

100% of the charter price, if cancelled 24 hours prior to flight performance.

It is noteworthy that the word "penalties" is used in clause 9 of the ACA, which provides that:

if D cancels the flight six days prior to the flight, 10 % of the charter price is payable;

if D cancels the flight five days prior to the flight, 20 % of the charter price is payable;

if D cancels the flight three days prior to the flight, 50 % of the charter price is payable; and

if D cancels the flight 24 hours prior to the flight, 100 % of the charter price is payable.

P's claim in respect of the cancelled flights on 14.10.2022, 15.10.2022 and 24.10.2022 to 31.10.2023 are inconsistent with clause 9 of the ACA. The flights on 14.10.2022 and 15.10.2022

In respect of the cancelled flights on 14.10.2022 and 15.10.2022, P issued Invoice No. PC - 2210009 dated 17.10.2022 expressly citing clause 9 of the ACA and claiming 75 % of the charter price for each of the said flights. This is contrary to clause 9 of the ACA. Clause 9 of the ACA does not provide for any cancellation charge of 75 %. The flights on 24.10.2022 to 31.10.2023

In respect of the cancelled flights on 24.10.2022 to 31.10.2023, P issued the cancellation invoices claiming 100 % of the charter price for each of the said flights and expressly citing clause 9 (d) of the ACA. Pursuant to clause 9 of the ACA, P is only entitled to impose 100 % of the charter price if there is less than 24 hours' notice provided to P.

It is indisputable that P was informed as early as 20.10.2022 of the suspension / cancellation of all flights from 20.10.2022 onwards. In other words, with regards to the flights on 24.10.2022 to 31.10.2023, P was given more than 24 hours' notice. As such, P ought not to be entitled to impose 100 % of the charter price. The flights on 27.10.2022 to 31.10.2023

In respect of the cancelled flights on 27.10.2022 to 31.10.2023, clause 9 of the ACA provides that if more than six days' prior notice were given to P, P is not entitled to charge for any charter price.

Accordingly, since P was given more than six days' prior notice of the suspension / cancellation for the flights from 27.10.2022 to 31.10.2023 (whereby P was notified as early as 20.10.2022 of the suspension/ cancellation), P ought not to be entitled to impose 100 % of the charter price.

In the circumstances, P's claim for cancellation charges for flights for 14.10.2022, 15.10.2022 and 24.10.2022 to 31.10.2023, is contrary to the ACA and ought to be dismissed. There must be strict adherence to the agreed terms of the agreement by the parties. (See the Federal Court case of Integrated Training and Services Sdn Bhd v Kerajaan Malaysia & Ors [2022] 3 MLJ 77 at [26]). The Plaintiff's claim for the cancellation charges is an afterthought. The Plaintiff has waived and is estopped from insisting on the same

I consider that P's claim is an afterthought. P ought to be estopped from now pursuing the same. P has, by its contemporaneous conduct, waived and is estopped from claiming for any cancellation charges against D. P's contemporaneous conduct can be seen from the following:

Firstly, despite the ACA stating it is to commence on 1.9.2022, P did not impose any cancellation charges for flights from 1.9.2022 to 12.10.2022.

Secondly, the commencement date of P's services had shifted on a number of occasions (i.e. from 1.9.2022 to 21.9.2022, then to 5.10.2022, then to 11.10.2022, and the flights eventually only took off on 17.10.2022). Be that as it may, P never sought to impose any cancellation charges against D.

Thirdly, P had accepted D's request to suspend / cancel flights from 20.10.2022 onwards. As such, P ought not to now be entitled to impose any cancellation charges against D.

Fourthly, when P issued the notice to suspend flights, P expressly stated that the airline had agreed to give a "reorganisation period" of one week with "no further cancellation charges".

Fifthly, P had issued various correspondence (some of which are set out below) to D suggesting that P is in the midst of negotiation with the airline for waiver of the cancellation charges between P and the airline. Thereby giving D the impression that P will not be charging any cancellation charges, or that such charges are subject to negotiation with the airline.

In its email dated 13.10.2022, P stated that "P - Cube is currently negotiating on cancellation charges for flight that was cancelled on $ 1 3^{th} $ $ 1 4^{th} $ and $ 1 5^{th} $ October", and that P would update D again in due time.

(ii) In the WhatsApp messages dated 19.10.2022 and 20.10.2022, PW1 stated that he was negotiating with the airline on cancellation charges, that he would update and bill D "once everything is firmed up", and that he would do his best to negotiate with the airline.

(iii) PW1 admitted under cross - examination that P's position then was that it would negotiate with the airline, and any cancellation charges is subject to the airline (if at all).

Subsequent to the notice to suspend flights, P was consistently following up with D on the resumption of the flights and discussing on new rates / new arrangement for the resumption. Thereby giving D the impression that:- (a) any resumption is premised on mutual agreement; and (b) there would not be any cancellation charges imposed.

On 31.10.2022, P had via its email requested that D provide a tentative date to resume the project.

On 2.11.2022, P had via its email once again requested D to provide feedback on the resumption of the charter flights.

PW1's WhatsApp conversation with D's representative on 26.10.2022, where he requested D to push to restart the project.

It is evident from P's contemporaneous conduct that P's conduct led D to believe that P was not pursuing cancellation charges under the ACA against D. When one party conducts himself in such a fashion as to lead the other party to believe that he has been given a unilateral waiver of performance of a particular part of the contract, then the party who is relying on that conduct is entitled to claim such a waiver. (See the Court of Appeal case of Puncak Alam Housing Sdn Bhd v Menta Construction Sdn Bhd & Anor [2013] 1 LNS 148 at [52]).

In the circumstances, it would be inequitable for P to now assert, retrospectively, that cancellation charges had to be paid by D. P's conduct at the material time is inconsistent with its present claim for cancellation charges. P's present action is an afterthought and should not be allowed. (See the Federal Court case of Nabors Drilling (Labuan) Corp v Lembaga Perkhidmatan Kewangan Labuan [2020] 12 MLJ 54 at [16]). The Plaintiff is not entitled to the cancellation charges as the Plaintiff has failed to prove actual loss suffered

Even if:- (a) P is entitled to rely on the ACA; (b) there is an obligation for D to charter minimum flights; and (c) D has failed to charter the said minimum flights, P's claim ought to still be dismissed on the ground that P has failed to prove actual loss suffered.

The burden is on P to prove not only liability, but also the loss suffered for its substantial claim for cancellation charges in the sum of RM 42,315,000.00. In Eikobina (M) Sdn Bhd v Mercantile (Far East) Pte Ltd [1994] 1 MLJ 553 at 560, the Supreme Court provided the following guidance: "After liability on a contract is established and when it comes to assessment of damages, two questions are always involved. The first is that no compensation can be awarded for damage that is too remote and the second is that in assessing damage that is not too remote, the correct measure of damages must be adopted, i.e. the correct and usual principles of quantifying the monetary compensation must be employed. The courts have long recognized that a contract breaker could not be liable for all consequences which flow naturally from a breach of contract and that they must draw a line somewhere, otherwise the consequences would be, inter alia, ruinous to the contract breaker. Thus, certain of such ensuing consequences would be regarded as too remote to be claimable, 'not perhaps on ground of pure logic but simply for practical reasons', to quote a dictum of Lord Wright in Liesbosch Dredger v Edison SS 1 made in a similar vein. The meaning of remoteness of damage was finally settled in the landmark case of Hadley v Baxendale 2 as follows: When two parties have made a contract which one to them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may be fairly and reasonably considered either arising naturally, i.e. according to the usual course of things from such breach of contract itself or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it ...”

The measure of damages for breach of contract is that the innocent party should be put in a position as if the contract had been performed, and not in a better position than if there was no breach. (See the Federal Court case of Bank Pertanian Malaysia Bhd v Koperasi Permodalan Melayu Negeri Johor [2015] 9 CLJ 1 at [100] - [101]).

The burden of proving both the fact and quantum of damages lies on P in relation to the damages claimed. (See the Court of Appeal case of Chandran G Nair & Ors v Affin Bank Bhd [2015] 1 MLJ 59 at [38]).

P must prove actual loss for each and every head of claim. If actual loss is not proven, then the claim ought to be dismissed or only nominal damages could be granted. (See the Court of Appeal case of Perbadanan Kemajuan Negeri Selangor v Selangor Country Club Sdn Bhd [2017] 2 MLJ 819 at [51]).

(See also section 74 of the Contracts Act 1950; the High Court case of Popular Industries Ltd v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360 at 369; the Federal Court case of KPM Khidmat Sdn Bhd v Tey Kim Suie [1994] 2 MLJ 627 at 630; and the Court of Appeal case of Ban Chuan Trading Co Sdn Bhd v Ng Bak Guan [2004] 1 MLJ 411 at [10]).

My finding is that P has failed to prove that it has suffered any actual loss in the present matter. The Plaintiff's witness admitted that the Plaintiff did not suffer any actual losses

PW1 accepted that P's position at the material time was that it was negotiating with the airline, and if the airline did not impose cancellation charges, P would not impose cancellation charges on D. PW1 further accepted that P was willing not to charge cancellation charges so long as P could negotiate with the airline.

Further, PW2 (director of P) also admitted that at all material time, P did not pay the airline any charges in respect of the flights from October 2022 to October 2023. In other words, by P's own admission, P did not suffer any losses and P did not make any payments to the airline.

P sought to produce invoices issued by Asia Aero Network Sdn Bhd ("AAN") in an attempt to suggest that it has suffered losses. However, this was not pleaded by P. As such, P ought not to be allowed to raise the same. (See the Federal Court case of Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 at [29], [30] and [34]).

P has in any event failed to prove that such invoices were paid by P. Instead, PW2 admitted that:- (a) the AAN invoices had not been paid by P; (b) P is still in dispute with AAN over the AAN invoices; and (c) P does not agree with AAN charging those invoices.

It is untenable for P to, on the one hand, dispute AAN's entitlement to charge P. But on the other hand, claim the full amount of the cancellation charges from D, as though P had actually suffered the corresponding loss. On this ground, P's claim ought to be dismissed. The Plaintiff's claim is not a claim for services rendered

It bears emphasis that P's action is not a claim for flights actually operated or for services actually rendered. It is undisputed that the only flights actually operated by P for D were the flights on 17.10.2022, 18.10.2022 and 19.10.2022, and that D had paid P for the said flights. After 20.10.2022, no further flights were booked, confirmed or utilised by D. Hence, P's claim for RM 42,315,000.00 is not a claim for services rendered. It is a claim for cancellation charges for flights which were never operated and never utilised by D.

In those circumstances, P must prove what actual loss was suffered by reason of the non - operation of the said flights, or why the sum of RM 42,315,000.00 is recoverable as compensation. P has failed to do so. The Plaintiff cannot prove loss by merely issuing invoices for flights which were never booked, confirmed, operated or utilised

P's claim is effectively a computation based on the alleged daily charter rate of RM 130,000.00 for the alleged varied guaranteed minimum flight multiplied across alleged flights up to 31.10.2023. However, such a computation is not proof of loss.

In Koperasi Kastam Diraja Malaysia Bhd v Yi Go Group Sdn Bhd [2021] 5 MLJ 590, the plaintiff sought to claim damages by reference to the rental it would have earned over the whole unexpired period of the contract. The Court of Appeal rejected that approach, because it would overcompensate the plaintiff and allow it to profit from the breach.

The Court of Appeal held (at page 598): "[25] On top of that, the plaintiff in being granted the whole of the rentals for the five year period, would have the benefit of the whole of the contract sum payable under the contract being paid upfront even before the expiry of the contract and just after three months into the contract. That cannot be right and does not compute with the established principles of assessment of damages for a breach of contract. [26] What we can say here, and we do so with the greatest of respect to the learned High Court judge, is that the assessment of damages based on the entire period of the contract and the agreed rates had the contract been carried through to its completion, would be far in excess of the loss suffered and thus inappropriate as there is no evidence led that the plaintiff could not let out the ten used storage containers, the forklift and the crane after repossession from the defendant. [28] We are of the considered view that to allow damages based on the amount to be collected for the entire term of the contract of five years would be disproportionate and excessive. Instead of compensating the plaintiff for its loss, it would be causing the plaintiff to profit from its loss which is not the principle in awarding damages upon a breach of a contract."

Applying the same principle here, P cannot simply claim RM 42,315,000.00 by multiplying the alleged charter rate against the alleged remaining period of the ACA. Such an approach assumes that P is entitled to recover the full alleged charter price for flights which were never booked, confirmed, operated or utilised. This would place P in a better position than if the contract had been performed.

If the flights had in fact been performed, P would necessarily have had to incur operational costs and expenses. For instance, the cost of arranging the aircraft, crew, permits, fuel, ground handling and other flight related expenses. P cannot claim the full alleged charter price as though it represents actual loss.

As recognised in Koperasi Kastam (supra), a claim based on gross revenue is not the same as a claim for actual loss or profit. The claimant must prove the actual loss suffered after taking into account the costs and expenses which would have been incurred in performing the contract.

The Court of Appeal held (at page 601-602): [34] The compensation here is for the loss or damage which naturally arose in the usual course of things from the breach. Under s 74(1) of the Contracts Act 1950 and the first limb thereof, the plaintiff is allowed to claim for losses that arise naturally from the breach. That would involve the loss arising from not being able to let out the items repossessed to another customer or perhaps letting them out at a lower rate or perhaps only being able to let out intermittently. [35] Instead, the plaintiff here is claiming for the loss of revenue as general damages for the revenue it would have grossed in if the contract has been allowed to operate for its full five year term. [36] The question is whether that is allowed in law in the circumstances of this case. [43] Even in cases where the containers and the machines are not let out at all because there was no demand for them at all, the plaintiff would only be able to claim the loss of profit and not the loss of revenue from the rental, which it could have obtained for as stated earlier, there is the costs element in all businesses, whether it be fixed or variable costs or a combination of them. [44] The ordinary meaning of profit is that one should deduct one's costs from the revenue to be collected. Here the plaintiff had not disclosed his costs which may well include the costs of financing of the containers, the forklift, the crane, insurance and maintenance. After all, the containers are used containers and not brand new ones tailored to the defendant's needs."

In the premises, P's claim ought to be dismissed for failure to prove actual loss suffered. The Plaintiff is not entitled to the cancellation charges as the Plaintiff has failed to mitigate its losses

Even if: (a) P is entitled to rely on the ACA; (b) there is an obligation for D to charter minimum flights; (c) D has failed to charter the said minimum flights; and (d) P has suffered actual losses arising from such failure, P's claim ought to still be dismissed on the ground that it has failed to mitigate its losses.

A party seeking to recover damages for breach of contract has an overriding duty to take all reasonable steps to mitigate its loss. (See the Federal Court case of Kabatasan Timber Extraction Co v Chong Fah Shing [1969] 2 MLJ 6 at 8).

In Malayan Cement Industries Sdn Bhd v Golden Island Shipping (L) Bhd [2017] 4 MLJ 490 at [21] and [27], the Court of Appeal clarified that a plaintiff is not entitled to recover losses which could have been avoided by reasonable mitigation, even where the contract contains a liquidated damages clause. (See also the Court of Appeal case of Bekalan Sains P & C Sdn Bhd v Bank Bumiputra Malaysia Bhd [2011] 5 MLJ 1 at [213] - [214]; the Supreme Court case of Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd [1994] 3 MLJ 569 at 581).

The corollary is that compensation cannot be recovered for losses that reasonable steps could have prevented. Here, it cannot be disputed that, by 20.10.2022, P had been informed that all flights were to be suspended / cancelled from 20.10.2022 onwards until further notice. Thus, if P genuinely took the position that D had breached the ACA and that P would suffer loss by reason of such suspension / cancellation, P ought to have taken reasonable steps to mitigate its alleged loss from 20.10.2022 onwards.

Further, if P genuinely took the position that D's suspension amounted to a breach or anticipatory breach, P could have invoked its contractual rights, including the termination mechanism under clause 16 of the ACA. P did not do so. Instead, P allowed the cancellation charges to accumulate until 31.10.2023, when clause 16 (a) (i) of the ACA allows P to terminate the ACA if there is non - payment by D.

Further, P could have re - charter the aircraft, approach alternative clients, reduce operating costs, or otherwise minimise the financial consequences of the suspension. There is nothing before the court to indicate:

whether P advertised or offered the aircraft to alternative charter parties after 20.10.2022;

whether P contacted any other potential charterers or brokers;

whether P reduced or adjusted its costs in light of the suspension; and

whether the aircraft was in fact used by any other party during the relevant period.

Instead, P adopted the stance of doing nothing while claiming 100 % of the charter price as though the entire contract had been fully performed until 31.10.2023, and now seeks to claim RM 42,315,000.00 from D. Such conduct is commercially unreasonable and contrary to P's duty to mitigate its losses.

In these circumstances, P is not entitled to its claim as any alleged loss can be, but was not, mitigated. But instead was allowed to accumulate by P's own inaction, which should not be condoned. Accordingly, P's claim ought to be dismissed or substantially reduced on the ground of failure to mitigate. The Plaintiff has failed to discharge its burden of proof to claim for interest

P's claim for interest at the rate of 2 % per month on the outstanding invoices is based on clause 4 (b) of the ACA . Since P is not entitled to its principal claim of the cancellation charges, P ought to similarly not be entitled to any interest.

In any event, even if there is any sum due from D to P, I find that P is not entitled to the interest claimed. It is an afterthought and P ought to be estopped from now claiming for the same. P has never at all material times sought to impose interest against D. The very first time P raised and quantified the alleged 2 % monthly interest was through its previous solicitors' letter of demand dated 23.10.2023.

Further, although payment for the flights on 17.10.2022, 18.10.2022 and 19.10.2022 were made beyond the alleged deadline for payment, P has also never sought to charge (nor claim in this action) for interest on such payments. P's own pleaded case is that the said invoice was issued for RM 390,000.00, and that D made payments towards the same on 19.10.2022, 26.10.2022 and 1.11.2022 respectively.

PW2 accepted during cross - examination that :

it is P's case that invoices issued by P were due within seven days from the date of invoice;

the payments for the said invoice were not made within seven days from the date of invoice;

despite this, P never imposed any late payment interest against D in respect of the said invoice. P is also not claiming late payment interest in respect of the said invoice in the present suit.

P's own conduct manifests that it has never sought to impose any interest against D. On this ground, P ought to be estopped from now claiming for any late payment interest against D. Having accepted payment for the said invoice without imposing any late payment interest, and having not claimed such interest even in respect of the said invoice in this suit, P ought not to be permitted to retrospectively impose 2 % monthly interest on the cancellation charges.

In the circumstances, P's claim for interest in the sum of RM 9,572,739.09 as at 30.4.2024, and continuing interest at 2 % per month from 1.5.2024 until full payment, ought to be dismissed. The Plaintiff's arguments

Before turning to D's counterclaim, I will address the arguments canvassed in P's submission. At the outset, P's submission appears to proceed on the mistaken premise that P has already proven its case, and that the burden has shifted to D to disprove P's claim or to establish a credible defence. That is wrong.

The legal burden lies on P to prove its case. It is not for D to disprove P's case, nor is D required to establish a credible defence. P cannot overcome this burden by merely asserting that D did not call a particular witness, or that D did not prove its pleaded defence. Those matters do not relieve P of its primary burden to prove its own cause of action.

P's claim must stand or fall on the strength of P's own evidence, not on any alleged weakness in D's defence. On the evidence before the court, P has not discharged that burden. Argument 1: The ACA is valid and binding. Pursuant to clause 9 and Item 5, Appendix A of the ACA, the Defendant was obliged to charter a guaranteed minimum of four flights daily throughout the term of the ACA

As discussed, there is nothing in the ACA which states that D is required to charter a minimum of four flights daily. P's reliance on the WhatsApp messages between PW1 and D's representative where D's representative stated that she will let "legal to approve the contract" does not support P's case. At its highest, it shows that D's representative wanted the draft contract to be reviewed.

P sought to rely on the unpaid security deposit in an attempt to suggest that the ACA was binding. But the non - payment of the security deposit actually supports D's case that the parties never acted on the ACA. The fact that P proceeded despite non - payment of the RM 2.745 million security deposit supports the position that the parties were not strictly acting on the ACA.

P relies on clause 9 and Item 5, Appendix A of the ACA to contend that D is obliged to charter a minimum of four flights daily. However, clause 9 of the ACA is merely a cancellation clause, and Item 5, Appendix A of the ACA merely sets out the charter details and price.

Clause 9 and Item 5, Appendix A of the ACA should not be read in isolation. Properly construed, clause 9 is a cancellation mechanism, which would first require booking and confirmation of flights details (i.e. time and date, which is not confirmed as seen in Appendix B of the ACA). While Item 5, Appendix A of the ACA merely sets out charter details and prices.

Neither provision creates an express 'take - or - pay' obligation, requiring D to pay for flights never booked, confirmed, flown or utilised. Neither clause 9 nor Item 5, Appendix A of the ACA contains any express language imposing a strict duty for D to charter a minimum of four flights daily throughout the term of the ACA. Argument 2: Clause 18 (c) of the ACA, being the entire agreement clause, prevents the Defendant from relying on negotiations, representations and subsequent conduct outside the written ACA

Clause 18 (c) of the ACA is inapplicable in our present case. It merely states that the ACA supersedes all prior agreements, undertakings or proposals. In other words, clause 18 (c) of the ACA merely excludes discussion before the ACA. It does not exclude discussion after the ACA.

The conduct of the parties that is relied upon by D pertains to matters that transpired after the ACA (and not before). As such, clause 18 (c) of the ACA does not assist P. Nor does it prevent D from advancing its case that, despite the ACA, the parties did not act on the terms of the ACA.

In interpreting a contractual provision, the court ought to give effect to the words used. In this case, the word "prior" ought to be given effect. (See the Court of Appeal case of Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 3 MLJ 131 at [27]).

In any event, D does not rely on subsequent conduct to rewrite the ACA. But to show waiver, estoppel, non - reliance on strict rights, and P's inconsistent contemporaneous conduct. As such, even if clause 18 (c) of the ACA applies to discussion subsequent to the ACA, it still does not prevent D from advancing its case. Argument 3: The parties varied the guaranteed minimum flights from four flights daily to one flight daily at the rate of RM 130,000.00 per flight in accordance with clause 3 of the ACA

P submits that the alleged variation was in accordance with clause 3 of the ACA. However, clause 3 of the ACA is inapplicable. Clause 3 of the ACA expressly only allows parties to mutually agree to change the schedule, route and aircraft type.

P's pleaded case is that there has been a variation in respect of: (a) the rate of the flight; (b) the alleged guaranteed minimum flights; and (c) the minimum weight. All of which do not fall within the scope of clause 3 of the ACA. P ought not to be allowed to import words into clause 3 of the ACA.

Contrary to P's contention, P's 9.10.2022 email is not and cannot be a variation pursuant to clause 3 of the ACA. Any variation to the ACA ought to be in accordance with clause 18 (d) of the ACA, which P failed to comply with the same.

Even if clause 3 of the ACA applies, clause 18 (d) of the ACA still ought to be complied with for any variation of schedule, route or aircraft type. This is particularly since there is nothing in clause 3 of the ACA which states that the variation of schedule, route or aircraft type stated therein can be varied without the need for compliance with clause 18 (d) of the ACA. Argument 4: The Defendant did not terminate the ACA, and therefore remained liable for the cancellation charges until 31.10.2023

Firstly, this point was not pleaded. D says that it has been caught by surprise. According to D, had this allegation been raised by P in its pleading, D would have led evidence on this issue including:- (a) whether D has terminated the ACA; (b) if not, the reason why the ACA was not terminated by D; and (c) whether there were any discussions between the parties for such termination. However, as the same was not pleaded by P, D is now deprived of the opportunity to deal with this issue.

Secondly, the issue of whether D has terminated the ACA is irrelevant to P's claim. D has always been consistent in its position that the parties have never acted on the ACA. Instead, the parties' contemporaneous conduct demonstrates that the parties had been discussing and negotiating on an ad-hoc basis. As such, since the parties have never acted on the ACA, there is simply no need for any termination of the ACA.

Irrespective of whether D has terminated the ACA, P still bears the burden of proving its case. The alleged non - termination of the ACA by D, even if true, does not ipso facto entitle P to claim cancellation charges. P must still prove the following (which it has failed to do so):- (a) that there was an obligation on the part of D to charter a minimum of four flights daily; (b) that there was an agreement to vary the minimum flights to one flight daily at the rate of RM 130,000.00 per flight; (c) that despite the notice to suspend flight, P is still entitled to cancellation charges at 100 % of the alleged charter price; (d) that P has suffered actual losses; and (e) that P has mitigated its losses. Argument 5: Wings Heong requested all charter flights to be suspended until further notice and when the Plaintiff followed up with the Defendant, it is shown that:- (a) the Defendant did not have sufficient cargo volume to meet the guaranteed minimum flights; (b) Wings Heong acknowledged and admitted its contractual obligation in the email of 31.10.2022; and (c) the Plaintiff in good faith accommodated the Defendant's request for alternative prices and to ensure the ACA continues to be implemented

P's reliance on the alleged insufficient cargo volume is misplaced. Even if D was discussing cargo volume, this does not prove that D had a legally binding obligation to charter a minimum number of flights. At its highest, those communications suggest that the parties were discussing whether and how the arrangement could commercially continue. They do not prove an obligation to pay RM 130,000.00 per day for flights which were never requested, confirmed, operated or utilised.

With regard to D's email dated 31.10.2022, contrary to P's allegation, the email does not show any acknowledgment or admission of P's claim. P relies on the words "committed volume" in the phrase "using our current data to support the committed volume" to suggest that D has acknowledged and admitted its contractual obligation. This is misconceived. There is no context provided on the meaning of the phrase "committed volume".

D's email dated 31.10.2022:- (a) does not refer to the ACA; (b) does not refer to any guaranteed minimum flight; (c) does not refer to RM 130,000.00 per flight; (d) does not mention any cancellation charges; and (e) does not acknowledge P's entitlement to claim 100 % of the charter price for the remaining term. It is a far stretch to suggest that D's email dated 31.10.2022, which at best is a mere discussion on possible resumption, amounts to an unequivocal admission of liability.

With regard to P's allegation that it accommodated D's request for alternative prices, this actually supports D's case. If the parties were bound by a strict obligation to operate one flight daily at RM 130,000.00 per flight, there would have been no need for P to discuss alternative prices, routes and arrangements.

P's willingness to discuss alternative pricing and possible resumption is inconsistent with its position that D is automatically liable to pay RM 130,000.00 per day until 31.10.2023. Instead, those discussions are consistent with D's case that the parties were dealing with the arrangement on an ad - hoc commercial basis, and not on the basis of a fixed guaranteed minimum flight obligation. Argument 6: the Plaintiff issued invoices in the sum of RM 42,315,000.00 and the Defendant has never challenged the invoices

The issue of whether D had disputed P's invoices is irrelevant. At all material times, P is aware and has accepted the suspension / cancellation of all flights from 20.10.2022 onwards. P was aware as early as 20.10.2022 (being the date of the notice to suspend flights) that D will not be utilising any flights from 20.10.2022 onwards.

At no point in time did P in any of its correspondence, after the notice to suspend flights, reserve its right to charge any cancellation charges. In fact, subsequent to the notice to suspend flights, P participated in discussions on the resumption of the flights. P also proposed terms on how the parties could resume the services.

In the premises, there is no proper basis for P to be issuing the invoices which were unilateral documents generated by P. They cannot, by their mere issuance or non - payment, create liability where P has failed to prove the contractual basis for the same.

It is inequitable on the part of P to, on one hand, participate in negotiations on when and how to resume the project. But at the same time sought to issue invoices seeking cancellation charges. Irrespective of whether D has disputed the invoices, the fact remains that P has failed to prove its entitlement to the cancellation charges. Put another way, if P is not entitled to any payment, such entitlement would not arise simply because P had chosen to issue invoices unilaterally.

Furthermore, the invoices are inaccurate. The alleged flights billed therein do not tally with P's own pleaded case. Based on its pleaded case, P alleges that there was an agreement by the parties to vary the guaranteed minimum flight to one flight daily for six days a week (from Monday to Saturday, excluding Sundays).

However, P's invoices do not seem to follow this computation. In respect of invoices for the month of January 2023 and October 2023, P has sought to bill D for a total of 27 days, despite these months only have 26 days. During cross - examination, PW2 admitted that P has overclaimed for a couple of months. Argument 7: The Defendant's defences are unsupported by contemporaneous documents and evidence

P's argument is an impermissible attempt to reverse the burden of proof. P appears to suggest that unless D disproves P's claim, P's claim must succeed. However, until and unless P proves its case, there is nothing for D to disprove. D is entitled to put P to strict proof, to challenge the sufficiency of P's evidence, and to rely on the gaps, inconsistencies and admissions in P's own case. (See the Court of Appeal case of The Carbon Company Sdn Bhd v Ng Lee Hoon [2017] 6 CLJ 189 at [49]).

In any event, I find that D has led sufficient evidence to mount its defence. D's defences are supported by the contemporaneous documents, such as the contemporaneous emails exchanged between the parties, the WhatsApp messages between the parties, testimonies by D's witnesses and the admissions elicited from PW1 and PW2 during cross-examination. Argument 8: Adverse inference ought to be drawn against the Defendant given that there is no evidence at the trial to provide an acceptable explanation for the absence of Wings Heong's evidence. The evidence of DW2 and DW3 are hearsay evidence and cannot be accepted.

P complains that D failed to call its key witness, namely Wings Heong, who was directly involved in the negotiations and communications with P. Hence, D cannot advance any factual matters or make any factual interpretation of the communications between the parties.

Contrary to P's allegation, D has provided an explanation for the absence of Wings Heong. D had also shown the steps taken to secure Wings Heong's evidence, and had kept the court and P informed of the difficulties faced by D.

By D's solicitors' letter to court dated 19.12.2025, D informed the court that Wings Heong had been admitted to hospital for acute heart failure on 18.12.2025. At that time, she was still being treated in the Intensive Care Unit (ICU).

Thereafter, by D's solicitors' letter to court dated 26.12.2025, D informed the court that Wings Heong remained hospitalised, was scheduled to undergo heart surgery, and was also suffering from kidney failure.

Subsequently, by D's solicitors' letter to court dated 25.2.2026, D informed the court that notwithstanding its efforts to contact Wings Heong to obtain an update on her medical condition, D had been unable to reach her as her condition remained critical. In the same letter, D also informed the court that it had identified DW2, who was Wings Heong's assistant at the material time, as an alternative witness.

By D's solicitors' letter to court dated 12.3.2026, D again informed the court that, notwithstanding its continuous efforts to contact Wings Heong, D had been unable to reach her as at that date. Accordingly, D filed a subpoena for Wings Heong to attend the trial and testify.

By D's solicitors' letter to court dated 26.3.2026, D further explained that the subpoena against Wings Heong was filed in the abundance of caution and in the hope that Wings Heong would reach out to D should she recover in time and be able to attend the continued trial. D also made clear that, as matters stood, there was no certainty as to whether Wings Heong would be available or would recover before the continued trial date.

From the above, it can be seen that there is a reasonable explanation for the absence of Wings Heong, and D has kept the court and P updated of the same. Accordingly, there is no merit in P's allegation. D did not refuse to call Wings Heong. Instead, D was unable to secure her attendance due to circumstances beyond its control. Namely Wings Heong's critical medical condition, due to which she remained uncontactable despite D's efforts. Accordingly, no adverse inference should be drawn against D. (See Wisniewski (A Minor) v Central Manchester Health Authority [1998] EWCA Civ 596 (English Court of Appeal); Re Coroin Ltd (No 2); McKillen v Misland (Cyprus) Investments Ltd and others [2013] 2 BCLC 583 (UK Chancery Division) at [266] and [272] - [275]).

P's reliance on Takako Sakao v Ng Pek Yuen & Anor [2010] 1 CLJ 381 is misplaced.

Firstly in that case, adverse inference was drawn against the first respondent (being an individual) for failing to give evidence without any reason, despite being a party to the suit. In the present suit, D is not an individual. D is a corporation who could call any of its representatives to give testimony on its behalf. D did in fact call upon other representatives to give testimony on its behalf in the present case.

Secondly, unlike Takako Sakao (supra), there is a clear and contemporaneously documented explanation for Wings Heong's absence. This is not a situation of D withholding material evidence.

Thirdly, Takako Sakao (supra) itself recognises that an adverse inference may only arise where the circumstances justify it. The Federal Court cited the principle that there must first be some evidence or a case to answer, before the court is entitled to draw the desired inference. Where there is a satisfactory or credible explanation for the witness' absence, the potentially detrimental effect of that absence may be reduced or nullified.

It is pertinent to note that Wings Heong is not the only witness from D that was involved in this matter. At the trial, D called:- (a) DW1 (former Senior Finance Manager of D), who gave evidence on D's payment records, the payments made in respect of the said invoice, and matters relating to D's counterclaim; (b) DW2 (former Personal Assistant to the Chief Executive Officer of D), who was Wings Heong's personal assistant at the material time and was involved in the dealings with P; and (c) DW3 (Air Freight Manager of J & T Express (Malaysia) Sdn Bhd), who gave evidence on D's operational context, records and matters pursuant to D's documents which she had full access to.

This is not a situation where D has failed to call witnesses to advance its case. This is a situation where D has sought to call available witnesses to advance its case. As such, no adverse inference should be drawn against D.

P complains that D's witnesses were not personally involved in every contemporaneous transaction, or were not the makers of every document. That complaint is misconceived. DW2 was the personal assistant of Wings Heong, and was involved at the material time. It is inaccurate on the part of P to suggest that DW2 does not have personal knowledge of the matter.

Moreover, a witness may competently give evidence on behalf of a company based on the company's records and documents. Notwithstanding that the witness did not have personal knowledge of the underlying transactions. (See the High Court cases of Bespile Sdn Bhd (in liquidation) v Asianshine Sdn Bhd & Ors [2010] 4 MLJ 824 at [7] - [8]; Kubota Agricultural Machinery Sdn Bhd v Sharizan Sdn Bhd & Anor [2001] 6 CLJ 104 at 110-111).

There is no basis for P to challenge the credibility or the validity of the testimonies of DW2 and DW3. Most (if not all) of the testimonies of DW2 and DW3, as can be seen in their respective witness statements, are premised on the records and documents made available. There is no basis to disregard the testimonies of DW2 and DW3. P cannot dismiss the same as inadmissible.

Moreover, D's case does not rest solely on the oral evidence of its witnesses. D's case is anchored substantially on the objective documentary record and the admissions made by P's own witnesses. P's attack on D's witnesses does not cure P's own failure to prove its claim.

It is not in dispute that P has, pursuant to the said invoice, billed Da sum of RM 390,000.00 for the flights operated on 17.10.2022, 18.10.2022 and 19.10.2022. It is also not in dispute that P has been paid a sum of RM 399,459.14 as follows: Date of PaymentAmount deducted from the Defendant's account19.10.2022RM 132,650.9826.10.2022RM 133,143.851.11.2022/2.11.2022RM 133,664.31TotalRM 399,459.14

It can be seen that there is an overpayment of RM 9,459.14 (i.e. RM 399,459.14 paid by D less RM 390,000.00 billed by P), which ought to be repaid to D.

In submissions, P argued that D's counterclaim for RM 9,459.14 is unsustainable because:- (a) each payment made by D was SGD 39,429.00; and (b) it is the parties' agreement or understanding that the currency exchange rate to be applied is SGD 0.3033 = RM1.

This allegation was not pleaded by P. In reply to D's counterclaim, all that P pleaded in its Reply and Defence to Counterclaim was to deny D's counterclaim. P did not plead:- (a) that payments were made by D in Singapore Dollars (i.e. SGD 39,429.00); or (b) that there was an alleged agreed conversion rate of SGD 0.3033 = RM 1.

There is also no merit to the allegation. P has failed to produce any evidence or documents to support its allegation that there was an agreement or understanding between the parties regarding the conversion rate of SGD 0.3033 to RM 1. By P's own case, P admits that even D's witness, DW1, is unaware that there existed any agreement or understanding between the parties concerning the currency exchange rate.

Further, it is undisputed that the said invoice is in Ringgit Malaysia. The sum billed therein is RM 390,000.00. There is no mention of any currency exchange rate. During the trial, P alleged that it had subsequently issued an invoice with the purported SGD equivalent. Nevertheless, P has failed to produce the purported invoice in SGD.

In Sabah Land Development Board v Teraju Hijau Sdn Bhd [2018] MLJU 1740 at [33] - [34], the Court of Appeal held that the existence and contents of invoices must be proved by production in court. Applying that principle here, if P says that the true invoice position was an invoice in SGD or an invoice subject to an agreed conversion rate, the burden lies on P to prove it. P has not done so. P cannot rely on oral assertion or afterthought explanation to displace the only invoice before the court, namely the Ringgit Malaysia invoice for RM 390,000.00.

In specific reply to P's submission regarding purported admissions made by DW1:

DW1 merely agreed that the telegraphic transfers were to be made into a Singapore bank account of P. Thus, the transfers were to be paid in Singapore Dollars. DW1 did not concede that there was any such agreement on the currency exchange rate.

P says that DW1 conceded that no payment in the sum of RM 399,459.14 was ever transferred to D's Singapore bank account. However, D has never alleged that RM 399,459.14 was transferred to a Singapore bank account in Ringgit Malaysia. D's case is that the payments made by D, when reflected in Ringgit Malaysia from D's account, amounted to RM 399,459.14.

DW1 did not admit that there was any agreed currency exchange rate between P and D. On the contrary, when it was put to DW1 that there was an understanding and agreement between P and D that the exchange rate was 0.3033, DW1 answered: "I don't know".

P says that DW1 agreed that the currency exchange rate was provided by his colleague, and that it was already known to D what the agreed rate was. However, DW1 did not admit that there was any agreed rate between P and D. At its highest, DW1's evidence was that his colleague showed him an exchange rate for the purpose of processing the telegraphic transfer. That is not proof of a contractual agreement between P and D. It is merely evidence of internal payment processing.

The only invoice produced in respect of the flights on 17.10.2022 to 19.10.2022 is the said invoice, which is for a sum of RM 390,000.00. There is no invoice with any SGD equivalent or any agreement on the exchange rate.

The amount that has been credited / deducted from D's bank account for purposes of the payment for the said invoice is RM 399,459.14. I conclude that D has proven its counterclaim, and P has failed to mount a defence against the same. Conclusion

In conclusion, the totality of the evidence before the court shows that P has failed to prove its claim against D on the balance of probabilities. There are therefore no sums due and owing by D to P. Instead, D has discharged its burden of proof in relation to the counterclaim.

For the reasons above, I dismissed P's claim and allowed D's counterclaim. I ordered P to pay the sum of RM 9,459.14 to D.I awarded interest on the judgment sum at the rate of 5% per annum, from the date of judgment to the date of payment. I awarded costs of RM 50,000 to D. Dated 15 June 2026 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2) Counsels Edmund Bon Tai Soon, Soo Siew Mei and Kee Shu Min (Messrs. Chongsoo Partnership) for the Plaintiff Leong Chee Weng, Naveen Sri Kantha and Harshinie Paranitharan (Messrs. Lee & Poh Partnership) for the Defendant Case reference

Linear Consulting Sdn Bhd v Coneff Corporation Sdn Bhd [2023] 1 LNS 2370

WRP Asia Pacific Sdn Bhd v Lee Son Hong [2024] CLJU 2926

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Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd [1994] 3 MLJ 569

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Wisniewski (A Minor) v Central Manchester Health Authority [1998] EWCA Civ 596 (English Court of Appeal)

Re Coroin Ltd (No 2); McKillen v Misland (Cyprus) Investments Ltd and others [2013] 2 BCLC 583 (UK Chancery Division)

Takako Sakao v Ng Pek Yuen & Anor [2010] 1 CLJ 381

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Kubota Agricultural Machinery Sdn Bhd v Sharizan Sdn Bhd & Anor [2001] 6 CLJ 104

Sabah Land Development Board v Teraju Hijau Sdn Bhd [2018] MLJU 1740 Legislation reference

Sections 64 and 66 of the Companies Act 2016

Section 74 of the Contracts Act 1950