(ii) that contractual disputes between the parties pursuant to the underlying sub-contract in the absence of an unfair advantage or oppressive/morally reprehensible conduct of the beneficiary has been held not to be unconscionable in Ranhill S/N avA5TrB/Zka3H5z7dg8tw E&C Sdn Bhd v. Thyssenkrupp Industries (M) Sdn Bhd [2016] 6 CLJ 290; [2016] 9 MLJ 703 and Gumusut-Kakap Semi Floating Production System (L) Ltd v. Sabah Shell Company Limited (No 2) [2017] 1 LNS 945. [49] Nevertheless, I have a need to make a tentative assessment of the merits to decide if the Plaintiff’s claim is strong enough to warrant protection pursuant to s. 11 of the Act. Having considered the totality of all the facts here, I am persuaded that the Plaintiff has shown that “events or conduct are of such degree such as to prick the conscience of a reasonable and sensible man” have been made out. I have no doubt at all that the Plaintiff has placed sufficient evidence before the court so as to enable the court to be satisfied, that a case of “unconscionability” is made out, and that it is just to grant injunctive relief to keep the status quo pending the parties fighting it out at arbitration. [50] A factor I took into account in finding there is a “seriously arguable and realistic inference” of unconscionability was that the amount owed by Defendant to the Plaintiff is more than adequate to safeguard the Defendant's alleged financial exposure on the alleged defective Air Conditioning works pending the disposal of the arbitration proceedings between the parties. I have used the word “alleged" as I accept and find that there is no notice of breach sent by the Defendant as required under the sub-contract. It is for the Defendant to prove before the arbitral tribunal its allegations of defective Air Conditioning works, breach and wrongful termination of the sub-contract by the Plaintiff. To allow a call on the bank guarantee for sums which are disproportionate to the as yet unproven S/N avA5TrB/Zka3H5z7dg8tw potential losses alleged by the Defendant for defective Air Conditioning works reeks of unfairness and positively oppressive to the Plaintiff particularly when the Defendant owes the Plaintiff colossal sums that are already certified and may be used as set-off, if the Defendant’s claims are proved to be meritorious and not speculative. The Defendant will enjoy an unfair advantage if allowed to pre-maturely demand against the bank guarantee. In circumstances such as the one before me, there is unconscionability as decided in Kejuruteraan Bintai Kindenko Sdn. Bhd. supra: “[93] We all agree that performance bonds are used frequently in the construction industry as well as trade transactions locally as well as internationally. They are provided by and to parties who deal at arm's length. The court should give effect to the intention of the parties. The law in relation to performance bond should be placed on a clear and unambiguous footing so that they could be accepted by parties in Malaysia or at international level. Parties should not be allowed to take advantage of one another in making a demand or call on the performance bond particularly when they are not entitled to do so. It must be stressed that a performance bond can operate as an oppressive instrument and a demand or call by a beneficiary can sometimes be abusive. In the event that a beneficiary calls on the bond in circumstances where there is prima facie evidence of fraud or unconscionable conduct, the court should step in to intervene at the interlocutory stage to avoid further injustice to the other party. As has been expressed by the Court of Appeal in GHL Pte Ltd v. Unitrack Building Construction Pte Ltd & Anor (supra), "we agree that a beneficiary under a performance bond should be protected as to the integrity of the security he has in case of non-performance by the party on whose account the performance bond was issued, but a temporary restraining order does not prejudice or adversely affect the S/N avA5TrB/Zka3H5z7dg8tw security it merely postpones the realisation of the security until the party concerned is given an opportunity to prove his case." [51] That is not all. As pointed out by the Plaintiff, it appears that the only reasons offered by the Defendant to justify its inability to pay is: (i) due to the Employer’s delay in paying the Defendant and (ii) that the Plaintiff “remain(s) in a better fiscal position in comparison to” the Defendant. These are not acceptable reasons. That cashflow is the lifeblood to sub-contractors in the construction industry is irrefragable. [52] Added to that, it is clear to me that as the bank guarantee is a conditional guarantee, where the call can only be made if it is finally established that there is a breach of the sub-contract by the Plaintiff, it becomes obviously glaring for the invocation of s. 11 of the Act to assist the Plaintiff who had sought for protection of the court through injunctive relief pending arbitration. [53] As for the Defendant’s contention that Plaintiff is not entitled to the injunction sought because it delayed the process of arbitration, with respect, I do not agree to this assertion. Firstly, this is because it is common ground that any dispute arising between the parties is to be decided in the arbitration. Second, the court takes judicial notice that the AIAC director is already re-appointed and well ensconced in his position, and that the process of arbitration has already commenced at date of hearing of the application before this court. The injunction is only meant to preserve the status quo for the period between the grant of the injunction and the determination of the dispute by arbitration. As the court respects the choice of tribunal which the S/N avA5TrB/Zka3H5z7dg8tw parties have made, the fact that the Defendant may find arbitration too slow, or too inconvenient, is quite beside the point. [54] As for the Defendant’s fears that the bank guarantee will expire by 22.12.2023, in my respectful view, the injunction can be granted with a condition that (i) the Plaintiff do renew the bank guarantee on the same terms until the delivery of the arbitration award such that the Arbitrator will be at liberty to make such order for payment if any from the bank guarantee as he may deem fit to decide; and (ii) a copy of such renewed bank guarantee to be given to the Defendant’s solicitors 3 working days prior expiry of the same. A grant of injunctive relief with these conditions ought to allay the Defendant’s concerns of expiry of the bank guarantee. In this regard, the Plaintiff’s counsel to his credit, had agreed to apply for the AIAC fast track of the arbitration proceeding. [55] All things considered, in the circumstances of this case, to allow the Defendant to call on the bank guarantee will be oppressive, unfair to the Plaintiff, and if I may add, rubbing salt into the wound. Balance of convenience [56] The Court of Appeal in Dunggon Jaya (supra) and Petrodar Operating Co Ltd v. Nam Fatt Corporation Bhd & Anor [2012] 8 CLJ 311 held once a strong prima facie case of unconscionability has been established, the court need not concern itself with where the balance of convenience lies or whether damages will be an adequate remedy. This, in my view accords S/N avA5TrB/Zka3H5z7dg8tw with what was said by the Singapore Court of Appeal in Bocotra Construction Pte Ltd & Ors v Attorney General (No 2) [1995] 2 SLR 733, at pg. 747, 748: “The statement in Brody, White & Co Inc v Chemet Handel Trading (S) [1993] 1 SLR 65 that the balance of convenience test does not apply correctly indicates that cases involving such transactions are virtually sui generis. If the appellants’ arguments are accepted, this would mean that the court has to deal with both the equitable principle as well as the balance of convenience. To require such a ‘double-barrelled’ test would be dichotomous and illogical. In our opinion, whether there is fraud or unconscionability is the sole consideration in applications for injunctions restraining payment or calls on bonds to be granted. Once this can be established, there is no necessity to expend energies in addressing the superfluous question of ‘balance of convenience’. It does not lie in the mouth of the defendant to claim that damages would still somehow be an adequate remedy. ….. To allay these concerns, we need only note that dispensing with consideration of the balance of convenience does not make an injunction any easier to obtain. Indeed, a higher degree of strictness applies, as the applicant will be required to establish a clear case of fraud or unconscionability in interlocutory proceedings. It is clear that mere allegations are insufficient.” [57] In my respectful view, following Dunggon Jaya supra, Petrodar supra and Bocotra Construction, in considering applications for injunctions restraining call or payment of bonds or bank guarantees, the sole criteria is whether there is fraud or unconscionability. The tests of where the balance of convenience lies and whether there are serious issues to be tried and whether damages will be an adequate remedy are irrelevant in determining S/N avA5TrB/Zka3H5z7dg8tw whether to grant an injunction to restrain a call on the bank guarantee or performance bond. [58] At any rate, even if these tests are applicable, I am of the view that weighing the Defendant’s as yet unproven complaints of defective Air Conditioning works against that of the substantial payments certified to the Plaintiff, obviously the scales tip in favour of the Plaintiff. The balance of convenience lies in favour of the Plaintiff to restrain the Defendant from calling on the bank guarantee. There can be no prejudice to the Defendant as it has admitted owing mega millions unpaid to the Plaintiff; but if the injunction is not granted, the Plaintiff’s cash flow will be strangled further as it obviously will have to indemnify the bank for such payment. Besides, the pre – condition to call on the bank guarantee was not fulfilled by the Defendant. Damages in my view will not be an adequate remedy to the Plaintiff who is already put under tremendous financial strain due to the not insignificant certified sums that remain unpaid to it. [59] Finally, as the matter is heard inter partes, I do not find the suggestion of material non disclosure as posited by the Defendant to be fatal to the Plaintiff’s application. Looking at the matter from the wide-angle lens of justice, the essential justice of the case should take precedence over technical non-compliance of the Rules of Court 2012, if any. In this context, I do not intend to deviate from what I said in Aerodua Metal (M) Sdn. Bhd. v. Ibarat Hijau Sdn. Bhd [2021] MLJU 106; [2021] 1 LNS 256 :- “[42] In any case to address the non-disclosure point, the Defendant’s counsel ought to be aware that the Court of Appeal in Damayanti Kantilal S/N avA5TrB/Zka3H5z7dg8tw Doshi v. Jigarlal Kantilal Doshi [2004] 1 MLJ 456 after referring to the case of Salcon Engineering Sdn. Bhd. v. PRM Energy Systems (M) Sdn. Bhd. [1994] 1 CLJ 295 and Noor Jahan bte Abdul Wahab v. MD Yusoff bin Amanshah & Anor [1994] 1 MLJ 156 ruled that the paramount consideration was whether the justice of the case required the granting of the interim injunction on the facts presented in an inter partes hearing and the Court should not take a narrow and strict interpretation of O. 29 r. 1(2A). At p. 464, 465 , the Court of Appeal approvingly cited: “The practicality of the Bennet and Broadbent approach is that the court will not at the inter parte hearing, be encumbered with a forensic study on the question of disclosure. In some cases, such as the present, this is an onerous task involving detailed study of voluminous documents. At the end of this exercise, much time is wasted. I prefer to approach the inter parte hearing on a more pragmatic level by considering the merits of continuing the injunction on the material disclosed by both parties..” (emphasis added) [60] On the facts and circumstances of this case, the court finds that there is a “seriously arguable and realistic inference” of unconscionability to warrant the exercise of the Court’s discretion to grant the injunctive relief sought by the Plaintiff to maintain the status quo. [61] As such, prayer 1 of the OS is granted SUBJECT to the conditions that that the Plaintiff do renew the bank guarantee on the same terms until the delivery of the arbitration award. A copy of such renewed bank guarantee is to be given to the Defendant’s solicitors 3 working days prior expiry of the S/N avA5TrB/Zka3H5z7dg8tw same. The injunction granted shall automatically lapse upon failure to renew by the Plaintiff. The Defendant is to pay the Plaintiff costs of this application subject to allocator. Dated: 2nd July 2023 - sgd - ……………………….. Liza Chan Sow Keng Judge High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff : Edward Kuruvilla (together with him, Nereen Kaur Veriah) Messrs Atma Singh Veriah & Co. For the Defendant : Allen Cheng (together with him, Sandhya Saravanan) Messrs Azman Davidson & Co CASES REFERRED: Ranhill E&C Sdn Bhd v Thyssenkrupp Industries (M) Sdn Bhd & Anor [2016] MLJU 535; [2016] 6 CLJ 290; [2016] 9 MLJ 703 Jeks Engineering Sdn Bhd v Pali Ptp Sdn Bhd [2019] MLJU 1029 Ahmad Zaki Sdn. Bhd. v. SN Akmida Holdings Sdn. Bhd. [2021] MLJU 644 KNM Process Systems Sdn. Bhd. v. Lukoil Uzbekistan Lubricating Company LLC [2020] MLJU 85 Sumatec Engineering & Construction Sdn Bhd v Malaysian Refining Company Sdn Bhd [2012] 4 MLJ 1; [2012] 3 CLJ 401 S/N avA5TrB/Zka3H5z7dg8tw Esso Petroleum Malaysia Inc v Kago Petroleum Sdn Bhd [1995] 1 MLJ 149; [1995] 1 CLJ 283 Kejuruteraan Bintai Kindenko Sdn Bhd v Nam Fatt Construction Sdn Bhd [2011] 7 CLJ 442 China Airlines Ltd. Maltran Air Corp Sdn. Bhd. (formerly known as Maltran Air Services Corp Sdn. Bhd.) and another appeal [1996] 2 MLJ 517 Teknik Cekap Sendirian Berhad v. Public Bank Berhad [1995] 3 MLJ 449; [1995] 4 CLJ 697 Dunggon Jaya Sdn. Bhd. v. Aeropod Sdn. Bhd. & Anor and another appeal [2019] MLJU 392 China Construction Pearl River (M) Sdn. Bhd. v. Industrial and Commercial Bank of China (Malaysia) Sdn. Bhd. & Anor [2022] 5 AMR 664 Ssangyong Engineering & Construction Co. Ltd. v. Oxley Rising Sdn. Bhd. [2022] MLJU 888 SN Akmida Holdings Sdn. Bhd. v. Ahmad Zaki Sdn. Bhd. [2020] 4 CLJ 564 Channel Group v. Balfour Beatty Ltd. [1993] AC 334 Tindak Murni Sdn Bhd v Juang Setia Sdn Bhd and another appeal [2020] 3 MLJ 545; [2020] 4 CLJ 301 Press Metal Sarawak Sdn Bhd v Etiqa Takaful Berhad [2016] 9 CLJ 1; [2016] 5 MLJ 417 Gumusut-Kakap Semi Floating Production System (L) Ltd v. Sabah Shell Company Limited (No 2) [2017] 1 LNS 945 Petrodar Operating Co Ltd v. Nam Fatt Corporation Bhd & Anor [2012] 8 CLJ 311 Bocotra Construction Pte Ltd & Ors v Attorney General (No 2) [1995] 2 SLR 733 S/N avA5TrB/Zka3H5z7dg8tw Aerodua Metal (M) Sdn. Bhd. v. Ibarat Hijau Sdn. Bhd [2021] MLJU 106; [2021] 1 LNS 256 LEGISLATION/STATUTE REFERRED: Order 29 Rule 1(2A) of the Rules of Court 2012 Section 11(1)(a) and (b) of the Arbitration Act 2005 S/N avA5TrB/Zka3H5z7dg8tw