Pesat Bumi Sdn Bhd v Geo Hill Construction Sdn Bhd (WA-24NCC-610-12/2024)

The plaintiff filed an originating summons, seeking a Fortuna Injunction to restrain the defendant from commencing or continuing with winding-up proceedings against it.

The court dismissed the originating summons, after finding that the debt owed by the plaintiff to the defendant is an undisputed debt.

The plaintiff appointed the defendant as a contractor in relation to the construction of a service condominium at Genting Permai, Mukim Bentong, Daerah Bentong, Pahang (“Project”). The plaintiff and the defendant entered into the following agreements: a. A Subcontract Agreement And Conditions of PAM Contract 2006 (With Quantities) (“Main Contract 1”), pursuant to which the plaintiff appointed the defendant as its main contractor to perform and complete the main building works for the Project (“Main Contract Works 1”); and b. A Letter of Award dated 30 June 2015 and the Agreement And Conditions of PAM Contract 2006 (With Quantities) (collectively, the “Main Contract 2”), pursuant to which the plaintiff appointed the defendant as its contractor in 4! ! relation to the construction and completion of earthworks, retaining walls, bored piling and contiguous bored piling works and foundation works for the Project (“Main Contract Works 2”). The Main Contract 1 and the Main Contract 2 shall collectively be referred to as the “Main Contracts”, while the Main Contract Works 1 and the Main Contract Works 2 shall collectively be referred to as the “Main Contract Works”.

The defendant claimed it had completed the Main Contract Works in accordance with the Main Contracts, but the plaintiff did not honour its contractual obligation towards the defendant.

Therefore, the defendant initiated the following adjudication proceedings against the plaintiff pursuant to the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”): a. In respect of the Main Contract 1, adjudication proceedings were initiated by way of adjudication reference no. AIAC/D/ADJ-5465-2024 (“5465 Adjudication”); and b. In respect of the Main Contract 2, adjudication proceedings were initiated by way of adjudication reference no. AIAC/D/ADJ-5422-2024 (“5422 Adjudication”). 5! ! [6] Decisions on the 5465 Adjudication (“Adjudication Decision 1”) and the 5422 Adjudication (“Adjudication Decision 2”) were delivered on 20 November 2024 (collectively, the “Adjudication Decisions”).

By the Adjudication Decisions, the plaintiff was ordered to pay a total of RM15,429,864.05 to the defendant (“Debt”).

The Debt has not been paid. Accordingly, the defendant issued a statutory notice of demand dated 6 December 2024 against the plaintiff (“Winding-Up Notice”).

In response to the Winding-Up Notice, the plaintiff filed an originating summons, seeking to restrain the defendant from presenting a winding-up petition or continuing with winding-up proceedings against it. C. Considerations And Findings

The court's power to restrain the presentation of a winding-up petition can be traced back to the Australian case of Fortuna Holdings

Pty Ltd v Deputy Federal Commissioner of Taxation [1976] 2 ACLR The Supreme Court of Victoria held that an injunction may be granted: a. Where the presentation of the petition might produce irreparable damage to the company and where the proposed petition has no chance of success; and b. Where a petitioner has chosen to assert a disputed claim by a procedure that might produce irreparable damage to 6! ! the company rather than by a suitable alternative procedure. [11] The principles set out in Fortuna Holdings (supra) have been recognised by the Malaysian courts (see Mobikom Sdn Bhd v lnmiss Communications Sdn Bhd [2007] 3 MLJ 316 and Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947). [12] The approach of the courts in considering the grant of a Fortuna Injunction has been clear, in that the injunction will only be granted when there is a debt that is bona fide disputed on substantial grounds. [13] In the present case, I find that in view of the Adjudication Decisions, the Debt is not in dispute. I am guided by Bludream City Development Sdn Bhd v Pembinaan Bina Bumi Sdn Bhd [2024] 4 MLJ 67, where the Court of Appeal reaffirmed the principle that a debt founded upon an adjudication decision is not a disputed debt, as it had been independently determined by a neutral and impartial adjudicator. The court held as follows: “[39] For winding up proceeding based on unpaid construction payment debts arising after the advent of the CIPAA particularly where the debt is based on an adjudicated decision, it is our view critical to properly understand the notion of disputability of the debt. Put in another way, disputability must be seen in its proper context. In this regard, we hold that an unpaid debt unadjudicated in a the CIPAA proceeding will be disputable if the non-paying party has prima facie established a bona fide dispute of the debt on substantial or reasonable grounds. However, if the dispute 7! ! on the debt has been adjudicated which resulted in an adjudication decision obtained in favour of the unpaid party, the debt ceases to be disputable in an ensuing winding up proceeding. This is because the disputed debt has been independently adjudicated by a neutral third party. More pertinently, it should not be open to the non-paying party to again dispute the debt when the sanctity of the adjudication decision has been preserved by the subsequent court orders refusing to set aside and/or stay as well as allowing enforcement of the adjudication decision as a judgment pursuant to ss 16, 27 and 28 of the CIPAA respectively …” (emphasis added) [14] Based on the above, I find that the Adjudication Decisions form a valid foundation for the defendant to issue the Winding-Up Notice. [15] I have taken note of the following proceedings before the Kuala Lumpur High Court, which were filed by the plaintiff to set aside and stay the Adjudication Decisions: a. Originating Summons No: WA-24C-205-12/2024, filed by the plaintiff to set aside Adjudication Decision 1; b. Originating Summons No: WA-24C-206-12/2024, filed by the plaintiff to stay Adjudication Decision 1; c. Originating Summons No: WA-24C-208-12/2024, filed by the plaintiff to set aside Adjudication Decision 2; and 8! ! d. Originating Summons No: WA-24C-207-12/2024, filed by the plaintiff to stay Adjudication Decision 2 (collectively, the “Setting Aside and Stay Applications”). [16] The plaintiff also filed Kuala Lumpur High Court Suit No. WA- 22NCC-802-11/2024 (“Suit 802”), to seek amounts which the plaintiff claimed are due and owing by the defendant. [17] I find the filing of the Setting Aside and Stay Applications does not render the Debt disputed. In Bludream City (supra), the Court of Appeal held that: “[39] … it is immaterial in the winding up court that the non-paying still disputes the adjudicated debt and has referred the dispute to arbitration or the court for final determination: see Barisan Performa Sdn Bhd v Hype Park City Sdn Bhd [2018] MLJU 10. The disputability of the dispute can only be done in the arbitration or the court to enable the parties to finally re-contest the dispute de novo unabated by the adjudication decision as well as without attracting res judicata because the adjudication decision enjoyed temporary but not perpetual finality: see G-Pile Sistem Sdn Bhd v CMMC Sdn Bhd and Anor [2021] MLJU 2694; [2021] 1 LNS 1727.” (emphasis added) 9! ! [18] Based on the above, the plaintiff’s challenge against the Debt through the Setting Aside and Stay Applications is incapable of rendering the Debt as genuinely disputed. [19] On the same basis, the plaintiff’s cross-claim for RM9,640,694.55 against the defendant in Suit 802 does not make the Debt a disputed debt. In Sime Darby Energy Solution Sdn Bhd (formerly known as Sime Darby Offshore Engineering Sdn Bhd) v RZH Setia Jaya Sdn Bhd [2022] 1 MLJ 458, the Court of Appeal held as follows: “[50] … Until and unless the AD is set aside, it can in law form the basis for the statutory notice which was the position in the present instance. Whether or not the respondent had a bona fide cross-claim against the appellant on merits to challenge the petition is a matter to be adjudged by the winding up court. We are not convinced that an unproven cross-claim can be the basis for restraining the filing of a winding up petition based on a valid and enforceable AD.” (emphasis added) [20] Thus, a cross-claim raised by the plaintiff in Suit 802 cannot serve as a basis to restrain the presentation of a winding-up petition against the plaintiff, as the petition is premised on the Adjudication Decisions, which are valid and enforceable. [21] I have also taken note that the cross-claim in Suit 802 is for RM9,640,694.55, which is an amount lower than the amounts totalling RM15,429,864.05 due by the plaintiff to the defendant under the 10! ! Adjudication Decisions. As such, even if the plaintiff succeeds in Suit 802, the amount of RM5,789,169.50 would still be due and owing by the plaintiff to the defendant. [22] Finally, I considered the plaintiff’s argument that there was a delay in the commencement of the 5465 Adjudication and the 5422 Adjudication, which would warrant the grant of a Fortuna Injunction. [23] I am unable to agree with the plaintiff, for two reasons. First, the 5465 Adjudication and the 5422 Adjudication were commenced within the limitation period. Second, the allegation of delay should have been raised during the adjudication proceedings and is irrelevant to the court’s consideration of whether a Fortuna Injunction should be granted to prevent the defendant from commencing winding-up proceedings against the plaintiff. [24] With the finding that the Debt is undisputed, a winding-up petition if presented against the plaintiff, has a reasonable chance of success. In this regard, the balance of convenience lies against the grant of an injunction that would restrain the filing of a winding-up petition, premised on the Winding-Up Notice.

[25] With the above considerations and findings, the court finds that the balance of convenience lies against the grant of a Fortuna Injunction in favour of the plaintiff. [26] Enclosure 1 is therefore dismissed, with costs. Dated 15 October 2025 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Plaintiff : Ting Lee Ping of Messrs. Ringo Low & Associates Defendant : Naveen Kantha (together with Hazelyn Khoo Hui Ying) of Messrs. Lee & Poh Partnership