Puncak Gali Harmoni Sdn Bhd v Emrail Sdn Bhd (BA-24NCC(ARB)-7-09/2025)

This is an appeal by the Plaintiff against my decision delivered on 2.10.2025 whereby the Court declined to confirm the ex parte injunction previously granted on 19.9.2025 and instead discharged the said interim order.

Enclosure 3 is the Plaintiff’s ex parte Notice of Application dated 10.9.2025 pursuant to Order 29 of the Rules of Court 2012 (“ROC 2012”), sections 11(1)(a), (b) and 50 of the Arbitration Act 2005 and/or the inherent jurisdiction of the court for the following orders: “1. the Defendant, whether by themselves, their servants, agents, employees, nominees or otherwise howsoever, be restrained from giving effect to any purported termination of the Letter of Award dated 29.5.2025 in respect of the sub-contract works for “Package C S/N bp3N9gE0xUe1mQ0f8niFNw Restoration of Track and Slope Stabilisation Track Rehabilitation and Associated Works due to Major Flood between Gua Musang and Tumpat Railway Station, Kelantan” (“the Project”) awarded to the Plaintiff by the Defendant (“the Letter of Award”) pending the full and final disposal of the Originating Summons herein;

that the Defendant, whether by themselves, their servants, agents, employees, nominees or otherwise howsoever, be restrained from giving effect to any purported termination of the Letter of Undertaking dated 29.8.2025 issued by the Defendant to the Plaintiff (“Letter of Undertaking”) pending the full and final disposal of the Originating Summons herein; S/N bp3N9gE0xUe1mQ0f8niFNw

that the Defendant be required to take all necessary steps and/or do all that is within their control to ensure that the Letter of Award and Letter of Undertaking remains valid and in existence pending the full and final disposal of the Originating Summons herein;

that the Defendant be required to take all necessary steps and/or do all that is within their control to ensure that the Contract No. KP/KEW/19/2025 awarded by the Ministry of Transport of Malaysia to the Defendant by letter dated 6.8.2025 in respect of the Project remains valid and in existence pending the full and final disposal of the Originating Summons herein;

that the Defendant, whether by themselves, their servants, agents, employees, nominees or otherwise be restrained from S/N bp3N9gE0xUe1mQ0f8niFNw and/or further engaging, discussing and commencing negotiations in any way whatsoever for the purpose of entering into, and/or agreeing to enter, and/or entering into any other agreements and arrangements in respect of the sub-contract works for the Project pending the full and final disposal of the Originating Summons herein;

that the Defendant, whether by themselves, their servants, agents, employees, nominees or otherwise be restrained from entering into, and/or agreeing to enter, and/or entering into any other agreements and arrangements in respect of the sub-contract works for the Project pending the full and final disposal of the Originating Summons herein; S/N bp3N9gE0xUe1mQ0f8niFNw

that the Defendant, whether by themselves, their servants, agents, employees, nominees or otherwise be restrained from disposing of, assigning, transferring, charging or otherwise in any way dealing with the total sum of RM630,000.00 paid by the Plaintiff to the Defendant on 16.7.2025,

19.7.2025 and 25.7.2025 pending the full and final disposal of the Originating Summons herein;

that the Defendant retain a sum of RM630,000.00 in an interest-bearing trust account separated from the Defendant’s general company funds forthwith pending the full and final disposal of the Originating Summons herein and the Defendant disclose proof of such retention of funds within seven (7) days of setting up the interest-bearing trust account; S/N bp3N9gE0xUe1mQ0f8niFNw

such other and/or further relief deemed just and appropriate by this Honourable Court; and

costs.”

Enclosure 3 was filed together with a certificate of urgency and an Ex Parte Injunction Order (Enclosure 8) was granted in favour of the Plaintiff on 19.9.2025. An inter partes hearing was then fixed on 2.10.2025.

The Plaintiff is a private limited company incorporated in Malaysia with a registered address at No. 2-19, Jalan Merbah 3, Bandar Puchong Jaya, Puchong, Selangor and a business address at No. 29-1, Jalan Forest Avenue 7, Seremban Forest Height, Seremban, Negeri Sembilan. The Plaintiff carries on business in general construction works, earth work and drains, tunnels, track work, cleaning and maintenance of buildings, painting, plumbing, supply of civil and mechanical material, S/N bp3N9gE0xUe1mQ0f8niFNw building renovations, mining, civil and electrical engineering, installation and sub-contractor.

The Defendant is a private limited company incorporated in Malaysia with a registered address at 19-8, Block C1, Dataran Prima, Jalan PJU 1/41, Petaling Jaya, Selangor. The Defendant carries on business in railway engineering services, infrastructure development and civil construction works.

On 29.5.2025, the Defendant issued a Letter of Award to the Plaintiff (“the Letter of Award”) for the sub-contract works of “Package C Restoration of Track and Slope Stabilisation Track Rehabilitation and Associated Works due to Major Flood between Gua Musang and Tumpat Railway Station, Kelantan” (“the Project”) at the contract price of RM 145,300,000.00.

During a discussion on 26.5.2025 between representatives of the Plaintiff and the Defendant, the Plaintiff was made aware of financial difficulties faced by the Defendant, which arose partly due to the termination of contract by the Ministry of Transport of S/N bp3N9gE0xUe1mQ0f8niFNw Malaysia (“MOT”) in 2022 and further compounded by the COVID-19 global pandemic.

On 29.8.2025, the Defendant issued a Letter of Undertaking to the Plaintiff (“the Letter of Undertaking”) whereby the Defendant undertakes, inter alia, as follows:- “Clause 1

Emrail shall undertake to ensure that all current legal proceedings, suits, and actions instituted against Emrail which threaten or may threaten Emrail with winding-up or any other legal process of enforcing or carrying out a court's judgment or order that jeopardise and affect the implementation and Project shall be resolved, settled, or otherwise disposed of within twelve (12) months from the date of this. Emrail shall further ensure take all necessary steps to suspend all action on the winding-up proceedings before the Courts. S/N bp3N9gE0xUe1mQ0f8niFNw

Emrail shall undertake to ensure the project remains intact and the execution of the works and payment to be received by Puncak Gali pursuant to and under the Sub Contract Agreement to be signed by Emrail and Puncak Gali shall not be affected or suspended for whatever reason whatsoever, save that Emrail shall not be held responsible where the delay, suspension or disruption arises from causes solely attributable to Puncak Gali.”

On 31.8.2025, a representative of the Plaintiff attended a meeting with a representative of the Defendant and was informed that the Defendant had received financial assistance from another party and that it will award the Sub-Contract Works of the Project to the said party. The identity of the said party was not made known to the Plaintiff.

Believing that the Defendant is attempting to unilaterally terminate the Letter of Award and Letter of Undertaking, the Plaintiff filed the Originating Summons (Enclosure 1) dated S/N bp3N9gE0xUe1mQ0f8niFNw

10.9.2025 praying for orders, inter alia, to restrain the Defendant from giving effect to the termination of the Letter of Award and Letter of Undertaking and to compel the Defendant to ensure that a Government contract awarded by the Ministry of Transport of Malaysia remains valid and in existence pending the full and final disposal of mediation and issuance of the Final Award in the envisaged arbitral proceedings to be commenced by the Plaintiff under Clause 4 of the Letter of Award.

The Defendant submits that the ex parte injunction was obtained unlawfully, in breach of the statutory moratorium under section 410(c) of the Companies Act 2016 (“CA 2016”), and through suppression of material facts, including the Court of Appeal judgment dated 27.8.2025 (Civil Appeal No. W-02(IM)- 2145-12/2024) (“COA 2145”) which confirmed the continuation of Judicial Management (“JM”) proceedings concerning the Defendant. The Defendant further contends that the Plaintiff’s conduct in forum-shopping, misrepresentation, and S/N bp3N9gE0xUe1mQ0f8niFNw concealment amounts to an abuse of process warranting indemnity costs.

The Plaintiff argues that it had, on the same day of filing the current Originating Summons and ex parte injunction application (i.e on 10.9.2025), filed an application in the Judicial Management proceedings before the Kuala Lumpur High Court (OS No. WA-28JM-14-04/2024) for leave nunc pro tunc to commence these proceedings, demonstrating good faith and substantial compliance. The Plaintiff contends that nunc pro tunc leave is recognised, citing In Re Saunders [1997] Ch 60 and Mahinder Kaur a/p Hazara Singh v Amran bin Ahmad [2019] MLJU 308, and that its omission was procedural and not fatal. It also submits that there was no suppression, as the Judicial Management issue was mentioned in paragraphs 41 and 51 of its Affidavit in Support (Enclosure 2) and explained to the ex parte judge. S/N bp3N9gE0xUe1mQ0f8niFNw

The Plaintiff distinguishes COA 2145 as confined to different facts and further submits that the injunction was directed only at the Defendant, not at the Government, and merely sought to preserve status quo pending arbitration. FINDINGS OF THE COURT A. Breach of section 410(c) of the Companies Act 2016

It is undisputed that as of 10.9.2025, there existed a subsisting Judicial Management proceeding concerning the Defendant, judicially recognised by the Court of Appeal in COA 2145 which ordered that the Judicial Management “shall subsist and continue.” Section 410(c) of Companies Act 2016 expressly prohibits the commencement or continuation of any proceedings against a company under Judicial Management without prior leave of the Judicial Management Court.

The law as affirmed in the Court of Appeal case of Kumpulan Liziz Sdn Bhd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd [2022] 1 AMR 365 is clear that the moratorium under S/N bp3N9gE0xUe1mQ0f8niFNw section 410(c) of Companies Act 2016 is mandatory and operates immediately upon the filing of the Judicial Management application. No proceedings may be commenced or continued without the Judicial Management Court’s leave.

The Plaintiff’s filing of a nunc pro tunc application earlier the same evening does not fulfil the statutory requirement of prior leave. Urgency, however genuine, cannot override a clear statutory prohibition. The ex parte injunction was therefore obtained without jurisdiction and is voidable on that ground alone.

The Plaintiff further contends that because its Originating Summons and injunction application (Enclosure 3) were ancillary to an intended arbitration between the parties, leave of the Judicial Management Court under section 410(c) was unnecessary. The Court is unable to agree.

Section 410(c) of the Companies Act 2016 is drafted in broad and mandatory terms. It provides that “no proceedings and no execution or other legal process shall be commenced or S/N bp3N9gE0xUe1mQ0f8niFNw continued against the company except with the leave of the Court.” The words “no proceedings” are unqualified and encompass any judicial action, including applications for injunctions or interim measures filed in aid of arbitration.

The legislative intent of section 410(c) of the Companies Act 2016 is to preserve the status and assets of the company under Judicial Management from any legal process, regardless of whether it arises from litigation or arbitration. The moratorium protects the restructuring process and ensures that all claims— secured or otherwise—are channelled through the Judicial Management Court. It follows that even a proceeding in support of arbitration falls within the prohibition, unless leave is first obtained.

This position is fortified by the reasoning in Granstep Development Sdn Bhd v Tan Chong Heng Construction Sdn Bhd & Other Cases (Enclosure 9) [2021] MLRHU 1967 (upheld by the Court of Appeal in [2024] MLRAU 103), where the court held that the moratorium under section 410(c) of the S/N bp3N9gE0xUe1mQ0f8niFNw Companies Act 2016 applies to all forms of judicial process, whether interlocutory, ancillary, or substantive.

In any event, the injunction sought by the Plaintiff in this case was not a neutral preservation of arbitral subject matter but a restraint that interfered with the Defendant’s performance of a Government contract. Such relief cannot be characterised as mere arbitral preservation.

Accordingly, the Court holds that the Plaintiff was required to obtain leave from the Judicial Management Court even if the injunction was intended to preserve rights pending arbitration. The failure to do so is a jurisdictional defect rendering the Originating Summons and injunction application (Enclosure 3) incompetent and liable to be struck out.

The chronology reveals that the Plaintiff filed its Judicial Management leave application in Kuala Lumpur at 9:18 p.m. on 10.9.2025 and its Originating Summons and ex parte injunction S/N bp3N9gE0xUe1mQ0f8niFNw in Shah Alam at 10:29 p.m. the same night. The ex parte injunction was granted on 19.9.2025, while the Plaintiff’s Further Affidavit (Enclosure 7) exhibiting the Judicial Management documents was filed only later that evening. The duty of full and frank disclosure is absolute. The Court must be informed of all material facts, particularly those affecting jurisdiction. The Plaintiff’s action did not adequately disclose that no leave existed when the injunction was sought. Such omission constitutes material non-disclosure under the principles in Sibu Slipway Sdn Bhd v Yii Chee Ming & Ors and other appeals [2017] 1 MLJ 368.

The subsequent filing of Enclosure 7 does not retrospectively cure the initial omission. The ex parte order was already made. This failure is fatal to the validity of the injunction.

While the Plaintiff contends that COA 2145 is confined to Balaranee Construction, the operative portion of that judgment, which declares that the Judicial Management subsists, remains S/N bp3N9gE0xUe1mQ0f8niFNw binding in rem upon the Defendant company. Until and unless the Judicial Management Court grants leave, this Court is bound to uphold that moratorium.

The authorities cited by the Plaintiff — Lai King Lung (practising as advocate and solicitor under the name and style of Messrs Chris Lai, Yap & Partners, advocates and solicitors) & Anor v Merais Sdn Bhd [2020] 5 MLJ 614 and Emanuele & Anor v Australian Securities Commission & Ors (1997) 188 CLR 114 — concern procedural extensions and not statutory moratoria. The nunc pro tunc doctrine cannot validate a proceeding commenced where statute expressly forbids it.

Accordingly, the Plaintiff’s Originating Summons and injunction application (Enclosure 3) were filed in breach of section 410(c) of the Companies Act 2016 and are legally incompetent. D. Specific Relief Act and Government Proceedings Act

The injunction sought and granted required the Defendant to S/N bp3N9gE0xUe1mQ0f8niFNw “take all necessary steps to ensure that the Government contract remains valid and in existence.” This has the practical effect of compelling or restraining governmental discretion in the performance of a public works contract. Such relief offends section 54(d) of the Specific Relief Act 1950 and section 29(2) of the Government Proceedings Act 1956, as recognised in Tan Bun Teet & Ors v Menteri Sains, Teknologi dan Inovasi Malaysia & Ors [2013] 3 CLJ 1115 and Dhaya Maju LTAT Sdn Bhd v Kerajaan Malaysia & Anor [2021] 2 CLJ 897.

The Court will not grant or maintain an injunction that interferes with the public duties of a Government department or the execution of a public contract. The ex parte order is therefore unsustainable on this ground as well.

The Plaintiff argues that all conditions in the Letter of Award have been satisfied or waived and that the Defendant should not profit from its own default. However, the evidence shows S/N bp3N9gE0xUe1mQ0f8niFNw that no executed final sub-contract exists. The Letter of Award remains conditional and incomplete.

Under section 54(f) of the Specific Relief Act 1950, an injunction cannot be granted to prevent the breach of a contract that is not specifically enforceable. Whether the conditions were satisfied or waived is a matter for the arbitral forum, not for interlocutory enforcement.

The Plaintiff’s claim is essentially commercial and capable of being compensated in damages, whereas the injunction jeopardised a Government contract of RM185 million intended for post-flood railway rehabilitation in Kelantan. The public interest in the timely completion of that project far outweighs any private claim by the Plaintiff.

Consistent with Perak Hydro Renewable Energy Corp Sdn Bhd & Anor v Wak Ngah Pili a/p Bah Adim (suing on behalf of herself and 22 individuals from the Senai tribe, as listed S/N bp3N9gE0xUe1mQ0f8niFNw in ‘Appendix A’) [2022] 6 MLJ 698, damages constitute an adequate remedy for the Plaintiff, and its undertaking in damages is not commensurate with the prejudice to the Defendant and the public project.

For the foregoing reasons, I find: a. The Plaintiff’s Originating Summons (Enclosure 1) was commenced in breach of section 410(c) of the Companies Act 2016 and is therefore incompetent; b. The Ex Parte Injunction Order (Enclosure 8) was obtained through material non-disclosure and contrary to statute; and c. The reliefs sought offend sections 54(d) and (f) of the Specific Relief Act 1950 and section 29(2) of the Government Proceedings Act 1956. S/N bp3N9gE0xUe1mQ0f8niFNw

Accordingly, the following orders are made: a. The Ex Parte Injunction Order (Enclosure 8) is set aside; b. The Plaintiff’s Originating Summons (Enclosure 1) is dismissed in limine; and c. Costs are awarded to the Defendant on an indemnity basis, as prayed.

This Court considers the award of indemnity costs appropriate in the circumstances. The Plaintiff commenced proceedings in knowing breach of an express statutory moratorium, failed to make full and frank disclosure at the ex parte stage, and persisted in maintaining an unsustainable injunction. Such conduct constitutes an abuse of process and warrants the Court’s censure. As for the Defendant’s prayer for damages quantified at RM185,743,000.00, no damages are awarded at this stage as they have not been proven. The Defendant is, S/N bp3N9gE0xUe1mQ0f8niFNw however, at liberty to file a separate application to assess and prove any actual losses arising from the wrongful injunction, if so advised. Dated 24 November 2025 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Steven Thiru, Aaronn Mathews & Chong Jen Hui (Messrs Aaron Mathews) For the Defendant : Ooi Suan Kim & Boo Honn Chin (Messrs O S Kim & Associates) S/N bp3N9gE0xUe1mQ0f8niFNw