Perspektif Masa Sdn Bhd v Sabah Development Bank Berhad (BA-22NCvC-490-11/2023)

Enclosure 59 is an application to strike out the Writ of Summons and Statement of Claim dated 29 November 2023 pursuant to Order 18 Rule 19(a) and/or (b) dan/or (d) of the Rules of Court 2012. It was filed by the defendant on 12 April 2024, following the dismissal of the plaintiff’s application for an interim injunction by this Court. 03/04/2025 13:28:40 BA-22NCvC-490-11/2023 Kand. 140

On 3 February 2025, this Court dismissed Enclosure 59 with costs. The reasons for my decision are outlined below.

The Plaintiff is the developer of a mixed development project on Lot 3901, HS(D) 61423, Jalan Aman Fasa III (Kg. Berembang), Mukim Ulu Klang, Gombak, Selangor (the Project).

The Plaintiff was also a customer of the Defendant. From 2007 to 2020, the Defendant provided various facilities to the Plaintiff at the Plaintiff's request.

By a Letter of Award dated 31 December 2013, the Plaintiff appointed China Railway Engineering Corporation (M) Sdn Bhd and Bismark Construction & Engineering Sdn Bhd as the main contractors for the construction of a housing and commercial development project known as Cadangan Membina 5 Blok 38 Tingkat, 1,099 unit Rumah Pangsa Kos Tinggi dan 23 unit Kedai 4 Tingkat yang Mengandungi Tadika, Dewan Serbaguna, Surau Serta 4 Tingkat Podium Tempat Letak Kereta dan Rekreasi dengan 1 Tingkat Basemen di atas Lot 3901, HS(D) 61423, Jalan Aman Fasa III (Kg. Berembang), Mukim Ulu Klang, Daerah Gombak, Selangor Darul Ehsan (the Project) for a sum of RM1,062,500,000.00.

For the Project and to ensure payment for the completion of the works undertaken by the main contractor, the plaintiff requested that the defendant issue a bank guarantee in favour of China Railway Engineering Corporation (M) Sdn Bhd as the beneficiary. The plaintiff has provided 3 several securities for the Bank Guarantee, which include three pieces of land and several condominium buildings as follows:

A first party second fixed charge over two land titles identified as H.S.(D) No. 61423 PT No. 3901 and H.S.(D) No. 58240 PT No. 3304, both situated in Bandar Ulu Kelang, Daerah Gombak, State of Selangor and owned by the Plaintiff.

(ii) A third fixed and floating charge over all current and future fixed and floating assets of the Plaintiff.

(iii) A second irrevocable Deed of Assignment over all end-finance proceeds on the proposed Fest Condominium comprising of 1,099 units of condominium to be developed on lands identified as H.S.(D) No. 61423 PT No. 3901 situated in Bandar Ulu Kelang, Daerah Gombak, State of Selangor and owned by Permodalan Negeri Selangor Berhad.

(iv) Joint and Several Guarantees by Dato’ Tee Ah Seng and Mr Tee Kim Hock. The guarantors shall also undertake to inject the necessary funds in the event of any cost overrun during the project's implementation.

Subordination of all shareholders’ and directors’ advances to the Bank Guarantee facilities.

(vi) A first Charge on Lot 4450 for the development of 1,248 units of condominium (Heros Block), Bandar Ulu Kelang, Daerah Gombak, State of Selangor.

(vii) A First Charge on H.S.(D) No. 58241 PT No. 3305, Bandar Ulu Kelang, Daerah Gombak, State of Selangor.

(viii) A First Charge on the land held under H.S.(D) 71661, PT 4921, Bandar Ulu Kelang, Daerah Gombak, State of Selangor measuring approximately 44,313 square meters [7] Under the plaintiff’s request on 5 February 2015, the defendant issued four Bank Guarantees in favour of the beneficiary, amounting to RM108,000,000.00, RM115,000,000.00, RM118,000,000.00, and RM135,000,000.00, totalling RM476,000,000.00. The plaintiff subsequently issued a Letter of Indemnity dated 25 September 2019 in favour of the defendant. [8] Subsequently, MBSB Bank Berhad, the assignee bank of the beneficiary, demanded payment of a guaranteed sum of RM476,000,000.00 as indicated in a letter dated 7 January 2020 (Exhibit SDB-7). Upon receiving the demand letter from MBSB and a certified true copy of the Certificate of Practical Completion (CPC), defendant released the guaranteed sum of RM476,000,000.00 to the beneficiary on 30 January 2020. At that time, the plaintiff did not object to the defendant's release of RM476,000,000.00. [9] After the Bank Guarantee was released, the plaintiff requested the defendant to convert the Bank Guarantee of RM476,000,000.00 into a term loan facility. The defendant issued an Offer Letter dated 6 August 2020, and subsequently, the parties entered into the Facility Agreement. The Term Loan Facility, amounting to RM476,000,000.00, is intended to reimburse the defendant for the amount paid as a result of the beneficiary's call under the Bank Guarantees. [10] The defendant alleges that the plaintiff has defaulted on payments under three Term Loan Facilities totalling RM476,000,000.00, RM104,100,000.00, and RM235,000,000.00, despite reminders issued by the defendant. In a letter of demand dated 25 September 2023, the defendant demanded that the plaintiff pay the outstanding instalment on or before 9 October 2023. [11] In reply to the demand letter, the plaintiff requested the defendant to defer the payment of the annual instalment for the loan facility of RM476,000,000.00. The defendant granted the plaintiff’s request for an extension until 16.10.2023. [12] Rather than making payment to the defendant, the plaintiff submitted the proposed settlement payment and explained the background and issues that contributed to the delay on the part of the plaintiff, as outlined in the letter dated 16 October 2023. [13] However, the defendant refused to accept the proposal. On 25 October 2023, the defendant's solicitors, Messrs Shook Lin & Bok, issued letters to the Plaintiff and the security parties, stating that an event of default had occurred and demanding the plaintiff pay all sums due under the Term Loan Facilities. [14] In a letter dated 1 November 2023, the plaintiff wrote to the defendant’s counsel, informing them that the parties were in the midst of negotiation. On 14 November 2023, the plaintiff proposed to pay the sum of RM37,000,000.00 in 2023 and RM500,000,000.00 in 2024. [15] The plaintiff failed to make any payments to the defendant as proposed. Instead, on 29 November 2023, the plaintiff filed a lawsuit before this Court against the defendant and an application for an injunction order (Enclosure 3) to restrain the defendant from enforcing the loan and security documents against the plaintiff following the default. [16] Under the Statement of Claim, the plaintiff pray for reliefs from this Court are as follows-a) An interim injunction to prohibit the defendant from enforcing all security agreement against the plaintiff including appointing a receiver and manager pursuant to the debentures dated 2.3.2007 and 23.7.2007 or foreclosure of the plaintiff’s property pursuant to the Power Attorney dated 19.5.2021. b) An interim injunction to prohibit the defendant from filing a winding up petition against the plaintiff. c) A permanent injunction to prohibit the defendant from enforcing all the security agreement against the plaintiff but not limited to appoint a receiver and manager pursuant to the debenture or foreclosure the plaintiff and/or filing a winding up petition. d) A declaration that the letter of demand dated 20.11.2023 is exaggerated, premature and was lacking in good faith and thus invalid. e) An order for an account enquiry pursuant to Order 43 Rules of Court 2012 into the amount of RM936,644.754 as demanded by the defendant. f) Costs. g) Special damages for project loss amounting to RM4,606,143,200.00. h) General exemplary damages to be assessed by the Court. i) Interest at the rate of 8% per annum on special damages to be calculated from the date of order. j) Interest at the rate of 8% per annum on general damages to be calculated from the date of order. k) Such further and/or other orders which this Court deems fit and proper to award. [17] On 29 November 2023, the plaintiff obtained an ex parte interim injunction against the defendant. Following the hearing of Enclosure 3 via inter parties on 26 March 2024, this Court dismissed Enclosure 3 with costs. On 15 November 2024, the Court of Appeal upheld the order made by this Court. C. LAW ON STRIKING OUT APPLICATIONS [18] Under Order 18, rule 19(1) of the Rules of Court 2012, the Court may evaluate the evidence and the merits of the case to determine whether this action is likely to fail and must assess whether the claim is clearly unsustainable. [19] In Raja Zainal Abidin bin Raja Haji Tachik & Ors v British-American Life & General Insurance Bhd [1993] 3 MLJ 16, the Supreme Court refers to the case of Tractors Malaysia Bhd v Tio Chee Hing [1975] 2 MLJ 1 and held as follows-In Tractors, the defendants applied to set aside the pleadings there on the grounds that they were frivolous and vexatious. The High Court allowed the application holding that the action was bound to fail. The Privy Council held that the Federal Court was in error for not examining the evidence and deciding as to whether the action there was bound to fail, though the power to dismiss an action summarily was a drastic power. The Privy Council went through the evidence with a fine-toothed and comb and decided to agree with the learned High Court at the first instance and restored the High Court’s decision. In conclusion, with great respect, the learned Judge could have avoided the pitfall as described by the Privy Council in Tractor. The lower court should have scrutinised the evidence in order to decide whether was bound to fail. If so, it would have been found otiose to send the case back to its starting point to start its long and expensive court albeit such a conclusion was reached on an application filed under O.18 r.19. [20] The Supreme Court in Bandar Builder Sdn Bhd v United Malayan Banking Corp Bhd [1993] 2 AMR 1969 held as follows: The principles upon which the court acts in exercising its power under any of the four limbs of O18 r.19(1) RHC are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable (see AG of Duchy of Lancaster v L & NW Rly Co). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (see Wenlock v Moloney & Ors). The authorities further show that if there is a point of law which requires serious discussion and the point set down for argument under O.33 r.3 (which is in part material with our o.33 r.2 of the RHC) (see Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd). The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are nit arguable. [21] In the case of Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 CLJ 1, the Federal Court addressed the test for striking out applications, stating that – The basic test for striking out as laid down by the Supreme Court in Bandar Builder (supra) is that the claim on the face of its must be obviously unsustainable. D. SUBMISSION BY THE DEFENDANT [22] The defendant asserted that the plaintiff owed the total sum of RM936,644,754.19 as of 20 October 2023 under the Term Loan Facilities. The plaintiff, having benefited from various facilities provided by the defendant, has defaulted on repaying these facilities. The plaintiff is bound by the terms of the letter of offer and the security documents for the RM476,000,000.00 and is barred from claiming that the defendant charged an excessive interest rate. [23] To prevent the defendant from taking further action under the facilities agreement, the plaintiff initiated this lawsuit. The plaintiff's main contention was that the defendant failed to investigate the alleged irregularities in issuing the certified certificate of practical completion dated 31 December 2019, before making payment under the Bank Guarantee on 30 January 2020. [24] The defendant additionally stated that the issuance of the letter of demand dated 25 October 2023, seeking the recall of the Term Loan Facilities, was carried out in good faith. This action arose from the plaintiff’s default on repayment under the Term Loan Facilities. [25] Accordingly, the defendant asserts that it is entitled to exercise all rights under the security documents to recover all sums owed by the plaintiff related to the Term Loan Facilities. The plaintiff lacks a valid cause of action against the defendant, and the plaintiff’s claim is intended as a tactical maneuver to forestall and delay the defendant’s efforts to recover funds from the plaintiff under the Term Loan Facilities, as well as to evade the plaintiff’s obligations under the loan and security documents. E. SUBMISSION BY THE PLAINTIFF [26] The plaintiff argues that they have a reasonable cause of action against the defendant and bona fide serious issues to be tried, which necessitates the hearing of viva voce evidence. [27] The main issue raised by the plaintiff is that the issuance of the Certificate of Practical Completion (CPC) is irregular, as it was not issued in accordance with the conditions of the construction contract for the project and the guidelines of Pertubuhan Arkitek Malaysia (PAM). The plaintiff relies on the case of Uniphone Telecommunications Bhd v Bridgecon Engineering Sdn Bhd & Anor [2011] 5 MLJ 875, which determined that whether the CPC was validly issued is a triable issue. [28] The plaintiff asserts that the Bank Guarantee should only be called once the CPC is appropriately issued. If the answer is negative, the Bank Guarantee of RM476,000,000.00 should not be invoked, and the defendant should not disburse the entire sum to the main contractor. The defendant should have verified the terms of the CPC issuance before releasing the payment under the Bank Guarantee. [29] The second issue raised by the plaintiff is that the defendant changed the nature of the Bank Guarantee, which has prejudiced the plaintiff's rights. The plaintiff submits that the call on the Bank Guarantee by the main contractor is unconscionable. The Bank Guarantee of RM476,000,000.00 was called upon the issuance of the CPC, and the sum has been released to the main contractor. [30] Furthermore, the plaintiff asserts that the call on the Bank Guarantee by the main contractor is irregular, as there was no joint site inspection or handover of the works to the plaintiff. The plaintiff did not receive any funds from the sum released; instead, the plaintiff incurred a loss from the project and was compelled to pay the Term Loan arising from the unconscionable Bank Guarantee. F. ISSUES TO BE DECIDED [31] Based onsubmissions from both parties, the relevant issues to be decided are as follows:

Whether the plaintiff’s claim is obviously unsustainable.

(ii) Whether the defendant's demand is premature.

(iii) Whether the call on the Bank Guarantee by the main contractor is unconscionable. G. EVALUATION AND FINDING OF THE COURT Issue 1: Whether the plaintiff’s claim is obviously unsustainable [32] In addressing this issue, I will examine the relevant question of whether the defendant has a duty to investigate the alleged irregularities of the Certified CPC before disbursing the guaranteed sum of RM476 million under the Bank Guarantee to the main contractor or beneficiary. [33] It is a fundamental principle that parties are bound by the terms of the agreements they enter into. In the case of Merita Merchant Bank Singapore Ltd v. Dewan Bahasa dan Pustaka [2018] Supp MLJ 33, the Federal Court held that – It is trite that parties are free to enter into a contract with terms and conditions as they deem fit and these terms and condition are binding on the parties who have in the first place agreed to be bound by it…It was a well-established principle sanctioned by the doctrine of sanctity of contract that parties who make agreement must adhere to their terms. [34] In paragraph 5 of the Statement of Claim, the plaintiff admitted that the parties had entered into several loan agreements, including a Letter of Award and Bank Guarantees. The plaintiff also presents facts related to Pengeluaran Jaminan Bank and Syarat-syarat Pengeluaran Jaminan Bank. Paragraph 7.9 of the Statement of Claim, among other points, states as follows –

7.9. BG1, BG2 dan BG3 hanya akan dikeluarkan selepas penerimaan dan/atau pematuhan perkara berikut daripada Plaintif atau kontraktor masing-masing:

7.9.1 Sesalinan Sijil Perakuan Siap (Certificate of Practical Completion) yang diakui sah yang dikeluarkan oleh Perunding Projek/Arkitek Projek sebelum tarikh luput setiap BG yang dikeluarkan.

7.9.2 Sebarang syarat lain yang difikirkan perlu oleh Defendan. …

7.11 BG1 hingga BG4 kena dibayar apabila Sijil Perakuan Siap Kerja (CPC) dikeluarkan kepada kontraktor utama. Mengikut syarat kontrak utama antara kontraktor utama dan pliantif, CPC hanya akan dikeluarkan apabila terdapat pematuhan spesifikasi yang ditetapkan oleh pihak berkuasa tempatan, lukisan pembinaan dan spesifikasi kontrak. [35] Having acknowledged the terms and conditions outlined in the loan agreement, the plaintiff proceeded to argue that disputes arose between the plaintiff and the main contractor concerning the construction of the project, as mentioned in paragraph 8 of the statement of claim. The relevant facts presented are as follows-

Pada 31.12.2019, arkitek yang dilantik telah mengeluarkan Sijil Perakuan Siap kerja (CPC) kepada kontraktor utama. Walau bagaimanapun, terdapat beberapa luar aturan dalam cara CPC tersebut dikeluarkan atas alasan-alasna berikut-antara lain:

8.1 Wujud sejumlah besar kerja-kera yang tidak lengkap dan cacat yang tidak selaran dengan spesifikasi oleh pihak berkuasa tempatan, lukisan pembinaan dan spesifikasi kontrak.

8.2 Kegagalan pihak kontraktor utama untuk membina sambungan pengembangan dengan betul di Tingkat Bawah hingga Aras 3 mengakibatkan masalah ‘ponding’ yang teruk.

8.3 Kegagalan kontraktor utama menggunakan bahan-bahan seperti yang diperuntukkan oleh Air Selangor bagi semua paip yang digunakan untuk menerima meter air bagi unit-unit kediaman mengakibatkan plaintif terpaksa menukar kesemua 1,099 unit paip bagi mematuhi peruntukkan Air Selangor.

8.4 Kegagalan kontraktor utama menutup semua lompang di bilik riser. [36] The plaintiff also stated that after the appointed architect issued the CPC, the main contractor invoked the Bank Guarantee. I find that these facts do not support the plaintiff's claims. The dispute between the plaintiff and the main contractor lacks merit in this suit, which the plaintiff initiated against the defendant. [37] The defendant is not privy to the construction contract made between the plaintiff and the beneficiary. As a financier, the defendant is not obligated to examine or investigate the disputes between the plaintiff and the beneficiary. The Court of Appeal in Public Bank Bhd & Anor v Exporaya Sdn Bhd [2013] 1 MLJ 507 stated the following: [24] The contractual duties of a bank towards a customer was established by the English Court of Appeal in the case of Lipkin Gorman (a firm) v Karpnale Ltd [1992] 4 All ER 331 where Alliott J held the following propositions:

The bank is entitled to treat the customer’s mandate at its face value save in extreme cases.

The Bank is not obliged to question any transaction which is in accordance with the mandate; unless a reasonable banker would have grounds for believing that the authorised signotaries are misusing their authority for the purpose of defrauding their principle or otherwise defeating his true intention.

It follows that if the bank does not have reasonable grounds for believing that there is fraud, it must pay.

Mere suspicion or unease do not constitute reasonable grounds and are not enough to justify a bank in failing to act in accordance with a mandate.

A bank is not required to act as an amateur detective. [38] In Golden Lustre Sdn Bhd v MCN Corporation Sdn Bhd & Anor [2007] CLJU 602, Justice Tengku Maimun (now the Chief Justice of Malaysia and FCJ) held that – I am in agreement with the learned counsel for the first defendant and the second defendant that the bank guarantee is an unconditional and on demand bank guarantee as could be seen from its clear wording… … Notwithstanding the error on the face of the bank guarantee, I am not with the learned counsel for the plaintiff on the proposition that the bank guarantee is ineffective. Given the understanding of the parties that the bank guarantee was for the benefit of the first defendant, and on the authorities cited, supra, I do hold that the plaintiff is now estopped from contending otherwise. [39] The express terms of the Bank Guarantee dated 20 March 2009 are binding upon the parties, as evidenced by its clear wording, as follows -

section 7.01 (g) of the Bank Guarantee Facilities Agreement reads: The Borrower acknowledges and agrees that the Lender’s obligation under any BG issued hereunder is absolute and unconditional and requires payment to the beneficiary named in such BG upon first written demand thereof by the beneficiary named in such BG notwithstanding any objection on the part of the Borrower. The Lender shall at all times entitled to make any payment under the BG upon demand by the beneficiary named in such BG without further investigation or enquiry and need not concern itself with the propriety of any claim made under or in the manner required under the BG. The Borrower hereby acknowledges and confirms that it shall not entitled whether at law or equity to stop or demand the Lender to withhold any payment which is to be made by the Lender under or pursuant to any BG hereunder.

Section 7.01(e) – The borrower shall on demand by the Lender as aforesaid reimburse the Lender any amount paid by the Lender to the beneficiary under or pursuant to any BG issued hereunder and hereby undertakes to indemnify and hold harmless the Lender against all costs, losses, damages, fees and expenses which the Lender may incur or sustain by reason of or on any way arising from or in connection with ant BG issued hereunder … and it is hereby further agreed and declared that the borrower’s obligations herein is to forthwith pay to the Lender the amount demanded by the Lender immediately upon the Borrower’s receipt of the Lender’s demand …

Section 7.01 (d) – If the beneficiary under any BG shall demand any amount under any BG issued hereunder or if the Lender (the Bank) is required to make or has made payment under any BG notwithstanding any objection by the borrower or any such dispute whatsoever or howsoever arising between the borrower and the beneficiary, the lender may at any time demand the payment from the borrower hereunder and the borrower shall forthwith pay the lender the full as demanded together with interest hereon. [40] I also refer to the case of Syarikat Binaan Utara Jaya (a firm) v Koperasi Serbaguna Sungai Glugor Bhd [2009] 2 MLJ 546, which the plaintiff cited. The Court of Appeal in Syarikat Binaan Utara Jaya (a firm) v Koperasi Serbaguna Sungai Glugor Bhd (supra) held that – [15] Of course, it is trite that when interpreting a contract, the language of the contract must be taken into consideration. The intention of the parties to be primarily gathered from the language employed in the contract itself. If, and only if the language is vague, the surrounding circumstances may be looked into in order to assist in interpreting the contract. … [17] From the available authorities, the following propositions may be advanced in construing a contract where the language employed is clear:

The court must give effect to the plain meaning of the words, no matter how distasteful the result may be;

Where the language in the document is unambiguous and clear, the real nature of the document is to be determined solely by looking at its content, uninfluenced by any intention of the parties;

When the minds of the parties are expressed in an unambiguous manner, the court cannot override the declared intention of the parties unequivocally expressed; and

There is no scope, at all, for drawing upon hypothetical considerations or the supposed intention of the parties when the words contained in the contract are clear and unambiguous. [41] Based on the above principle, the defendant's release of the Bank Guarantee in the amount of RM476,000,000.00 aligns with the terms outlined in the Bank Guarantee Facilities Agreement. This agreement is documented in writing. Thus, the parties are bound by its terms. Having benefited from the facilities agreement, the plaintiff is now precluded from presenting evidence to contest it. [42] The plaintiff's directors voluntarily executed the Bank Guarantee facilities. Based on the material facts before me, at all material times, the plaintiff never disputed the payment made by the defendant to the beneficiary under the Bank Guarantees. Consequently, the plaintiff is bound by the terms of the Bank Guarantee Facilities Agreement. [43] In Cheah Swee Fah v Bank Bumiputra Malaysia Bhd & Anor [2007] 7 MLJ 481, the Court of Appeal held that – [7] We agree with the finding of the learned judge of the High Court that to impose on the bank any duty to ascertain the actual situation at the site or even for it to make inquiries would indeed place an onerous duty on the bank. It is our judgment that in the absence of clear evidence that the first defendant was aware of the actual situation, or that being aware that there was something amiss in the architecture’s certificate, when it was made the payment it could not be said that the first defendant was in breach of any of its duties. … [9] Thus, under the terms of the contract there was no duty on the part of the first defendant to go behind the architect’s certificate. Neither was the first defendant competent to do so. [44] Subject to the terms of the Bank Guarantee Facilities Agreement, I am satisfied that the defendant has no obligation to inquire about any claims made under the bank guarantee by the beneficiary. Once the beneficiary makes demands under the bank guarantee, the plaintiff is bound to honour it. [45] Based on the above findings and drawing guidance from the principles stated in Bandar Builder Sdn Bhd v United Malayan Banking Corp Bhd (supra), I find that the plaintiff's claim is evidently unsustainable on its face. Issue 2: Whether the defendant's demand is premature. [46] The demand letter for payment of a guaranteed sum of RM476,000,000.00 from MBSB, dated 7.1.2020 (Exhibit SDB-7), is included in the ‘Afidavit Jawapan Defendan’ affirmed by Abdul Razak bin Hamid (Encl. 19). On page 2 of the letter, it states the following: “We hereby confirm that the Certificate of Practical Completion of the Works as defined in Clause 1 of the above Bank Guarantee(s) have been issued and a certified true letter of the same is attached hereto for your information and attention and urgent action. We, MBSB Bank Berhad being the Assignee of the above Bank Guarantee do hereby demand for the payment of the following Guaranteed sum(s):

BG2018-025 : RM108,000,000.00 2. BG2018-026 : RM118,000,000.00 3. BG2018-027 : RM115,000,000.00 4. BG2018-028 : RM135,000,000.00 Total Guaranteed Sum: RM476,000,000.00 Kindly remit payment in accordance with the terms of the above BGs in any event no later than twenty one (21 days) from the date of receipt of this written demand”. [47] Under the Bank Guarantee Facilities Agreement, the plaintiff agreed that if the bank guarantee is invoked and the defendant makes a payment to the beneficiary, the plaintiff shall promptly reimburse the defendant for the amount paid. If the plaintiff fails to do so, the defendant is entitled to impose an additional penalty fee of 3% per annum above the bank’s prime lending rate. [48] After the defendant released the bank guarantee to MBSB, the plaintiff took proactive steps by requesting that the defendant convert the bank guarantee of RM476,000,000.00 into a term loan facility. The defendant has consented to the plaintiff's proposal to restructure the amount of RM476,000,000.00 into a term loan facility. In my opinion, this significant fact undermines the plaintiff’s claim. [49] The defendant has accepted the plaintiff's proposal to restructure the sum of RM476,000,000.00 into a term loan facility. This arrangement is detailed in Exhibits SBD9, SBD10, and SBD11 of Enclosure 19. [50] The defendant asserts that, as of 20 October 2023, the plaintiff owes the defendant a total sum of RM936,644,754.19 under the Term Loan Facilities. I find that prior to the issuance of the demand notice dated 28 January 2020 by the defendant, the plaintiff neither protested nor raised any complaints regarding the error on the CPC or any fraudulent actions by the defendant in releasing the bank guarantee. [51] Under the Bank Guarantee Facilities Agreement, the plaintiff agreed that if the Bank Guarantee is called upon and the defendant makes a payment to the beneficiary, the plaintiff shall immediately reimburse the defendant for the amount paid. If the plaintiff fails to do so, the defendant is entitled to charge an additional penalty fee of 3% per annum above the Bank’s Prime Lending Rate. [52] I find that, based on the contemporaneous documents, the agreement for the Term Loan Facility was entered into at the plaintiff's request. The plaintiff had benefited from the funds advanced by the defendant. [53] It is the considered view of this Court that the plaintiff's action of filing a lawsuit and seeking an injunction to prevent the defendant from enforcing the security agreement lacks merit. [54] Based on my analysis of the affidavits and exhibits submitted with this application, I conclude that the plaintiff has failed to demonstrate a serious issue that warrants a trial. Issue 3: Whether the call on the Bank Guarantee by the main contractor is unconscionable [55] In the Federal Court case of Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Company Sdn Bhd [2012] 3 CLJ 401, the issue is whether MRC’s call for the bank guarantee constituted unconscionable conduct, which itself was sufficient grounds to challenge the payment demands under the bank guarantee. Abdull Hamid Embong FCJ, in delivering the judgment, held – “[1] The principle recognising unconscionability as a separate and distinct ground to restrain a beneficiary from making a call on a performance bond accorded with good commercial sense (Kejuruteraan Bintai Kindenko Sdn Bhd v. Nam Fatt Construction Sdn Bhd & Anor; Focal Asia Sdn Bhd & Anor v. Raja Noraini Raja Datuk Nong Chik & Anor). Thus, unconscionability may now be raised as a distinct ground. The determination on whether unconscionability applies in a particular case would therefore depend largely on the material facts.” [emphasis mine] [56] Based on the principle outlined above, this Court has a duty to thoroughly evaluate the material facts in determining whether the Plaintiff has established unconscionable conduct by the defendant. [57] In Sumatec Engineering and Construction Sdn Bhd (supra) it was held as follows: “[22] The strict approach towards the non interference by the courts on the bank's obligations is best explained in this oft-quoted passage of Kerr J in Harbottle (Mercantile) v. National Westminster Bank Ltd [1978] 1 QB 146 who said: It is only in exceptional cases that the courts will interfere with the machinery of irrevocable obligations assumed by banks. They are the life-blood of international commerce. Such obligations are regarded as collateral to the underlying rights and obligations between the merchants at either end of the banking chain. Except possibly in clear cases of fraud of which the banks have notice, the courts will leave the merchants to settle their disputes under the contracts by litigation or arbitration as available to them or stipulated in the contracts. The courts are not concerned with the difficulties to enforce such claims; these are risks which the merchants take.” [23] And to further emphasise that banks should be "left free to honour its contractual obligation" these passages from Edward

Owen Engineering Ltd v. Barclays Bank International Ltd[1978] QB .” [58] Paragraph 31 of the Plaintiff's written submission (Enclosure 78) raises the issue of no joint site inspection session conducted before the defendant released the bank guarantee to MBSB. I have found that the issue regarding a joint site inspection was never raised by the plaintiff prior to the filing of this suit. Furthermore, this Court is unable to determine the issue of bona fide elements on the part of MBSB in calling the bank guarantee, as MBSB is not a party named by the Plaintiff. [59] It is noted that there was no communication between the parties regarding the allegation of negligence on the part of the Defendant in releasing the RM476,000,000.00 under bank guarantee to the beneficiary. The demand letter for payment of a guaranteed sum of RM476,000,000.00 from MBSB dated 7 January 2020 is copied to the plaintiff. From 30.1.2020 until October 2023, the contemporaneous documents indicated these facts:

The plaintiff requested a term loan facility from the defendant to reimburse RM476,000,000.00.

(ii) The plaintiff signed the security charge to secure the term loan provided by the defendant.

(iii) The plaintiff did not pay the principal loan instalment for the Term Loan Facility, prompting the defendant to issue a letter of demand.

(iv) The plaintiff requested that the payment due to the defendant be deferred. [60] This Court concludes that there was no element of unconscionability in the defendant's conduct concerning the release of the bank guarantee to MBSB. The defendant is obligated to adhere to the terms and conditions of the agreement related to the Bank Guarantee. [61] In this case, the plaintiff did not provide any facts that could establish unconscionable conduct by the defendant in releasing the Bank Guarantee to MBSB. H. CONCLUSION [62] I have perused the cause papers and both counsels’ written submissions. Based on the reasons stated above, this Court is of the considered view that Enclosure 59 should be allowed with costs of RM10,000.00, subject to the allocator. Dated : 3rd April 2025 Signed ............................................................... HAZIZAH BINTI KASSIM Judicial Commissioner Shah Alam High Court (NCvC10)

For the Plaintiff : Eric Lai Tack Sng, Cheah See Yan & T. Geetha Messrs Lai & Associates (Petaling Jaya, Selangor)

For the Defendant : Marianne Loh Suet May & Jay Kah Mui Woon Messrs Shook Lin & Bok (Federal Territory of Kuala Lumpur)