Uppal Aimed Guard Security Sdn. Bhd. v Nestle Products Sdn. Bhd. (BA-22NCvC-77-02/2023)

NESTLE PRODUCTS SDN. BHD. (Company No.: 197901000966 [45229-H])

NESTLE MANUFACTURING [MALAYSIA] SDN. BHD. (Company No.: 199401029400 [315081-H]… DEFENDANTS GROUNDS OF JUDGMENT

This judgment determines the dispute between the Plaintiff, Uppal Aimed Guard Security Sdn Bhd (Uppal) and two Nestlé companies (collectively Nestlé / Defendants) arising from Nestlé’s termination of a Security Services Agreement dated 25 July / 1 August 2022 (SSA) under which the Plaintiff provided security services for 5 Nestlé sites. 01/04/2026 12:02:19 BA-22NCvC-77-02/2023 Kand. 92 S/N hX8ngg2/U0OmHc5lFGb2g

Uppal claims that the termination was unlawful and seeks, among other reliefs, the balance of contractual payments and damages. Nestlé pleads justification for termination on the grounds that Uppal deployed foreign security guards who were not in possession of valid immigration permits for lawful employment and Nestlé counterclaims for losses allegedly caused by Uppal.

Around July 2022, the Plaintiff was awarded security services contract for five (5) of the Defendant’s premises through an open tender. On 25.7.2022, the parties executed the SSA for the provision of security services at Nestle’s 5 premises. Under the SSA, Uppal was responsible for supplying security guards who were duly trained, qualified, and legally permitted to work in Malaysia. In particular, Uppal was contractually obliged to ensure that all foreign workers deployed at Nestlé’s premises, possessed valid work permits, namely, the VP(TE). S/N hX8ngg2/U0OmHc5lFGb2g

Below is the breakdown of the premises where the security guards were deployed: -

Around September 2022, Uppal deployed three (3) foreign security guards to Nestlé’s premises, namely, Bhattarai Kaladhar, Matara Shankar and Govinda Devkota, to the Head Office Unit at No.1 Powerhouse (HOU). On 28.10.2022, the Plaintiff delivered the relevant documents relating to the visa status and work permit process papers of the said security guards. S/N hX8ngg2/U0OmHc5lFGb2g

On 2.11.2022, the Defendant alleged, by an email, that the said three (3) guards did not have valid VP(TE) and suspended the Plaintiff’s services at HOU. Followed by a subsequent termination letter on the 7.11.2022 stating security services at HOU would cease on 8.11.2022, while the services at the other four (4) sites would cease on 6.2.2023 following a three months’ notice.

I have narrowed down the principal issues for consideration before this court as follows:

whether at the material time from August to November 2022, the three named security guards Kaladhar, Shankar, Govinda had lawful permits / valid VP(TE) to work at HOU under the Malaysian immigration law?

Whether Nestlé was entitled to terminate the SSA for breach of Clause 3 on warranties and compliance, referring to the Contractual/Termination issues?

Whether Nestlé had to give, a formal written notice to remedy the issues under Clause 8, before terminating the SSA and relatedly, does Nestlé’s repeated reminders and extensions amount to a waiver, estoppel or an implied longer time to remedy the issues? S/N hX8ngg2/U0OmHc5lFGb2g

Whether any other fact or event namely the disciplinary incidents, CCTV or theft matters, justified suspension or termination of the SSA?

whether, in consequence, Uppal is entitled to the reliefs claimed and whether Nestlé’s counterclaim succeeds.

Furthermore, this court, correspondingly gave consideration to additional important documentary evidence such as: -

the SSA, including Clause 3 as to the warranties for compliance with Legal Requirements, namely the Appendix 1 and deployment checklist which requires valid work permit/visa and a sticker of work permit/visa pasted on original passport.

the circular issued by the Immigration authorities dated 15 May 2019, which sets out the Special Pass / Visit Pass (Temporary Employment) (VP(TE)) / FOMEMA sequence and the practice in force at the material time.

the MyIMMS system screenshots produced during trial, showing immigration records for the three guards including recorded start dates and expiry dates for VP(TE) entries; and S/N hX8ngg2/U0OmHc5lFGb2g

contemporaneous correspondence between Nestlé and Uppal (the five reminders, 17 Aug, 19 Aug, 7 Sept, 19 Sept, 12 Oct 2022), the email/attachment of 28 Oct 2022 and the Termination Letter of 7 Nov 2022. Evidences on the credibility and reliability

Firstly, the Immigration officer subpoenaed by Uppal produced MyIMMS material and testified as to Immigration Department Malaysia (JIM) practices and the retrospective manner in which validity may be recorded. He gave evidence that was coherent with the Circular and the MyIMMS records. His testimony that VP(TE) validity as recorded in the system reflected an operational 12- month period, tied to the recorded expiry date, and that special passes and entry procedures permitted lawful processing pending finalisation of VP(TE). I accept his testimony as authoritative on immigration practice and record-keeping.

Secondly, as part of the Defendant’s internal investigation on the validity of the immigration status of the said workers, Defendants asserted that upon receiving the relevant documents regarding the visa status and work permit of three (3) security guards, SD1 concluded that none of the three security guards possessed the VP(TE) issued and produced by JIM based on the said internal investigations. S/N hX8ngg2/U0OmHc5lFGb2g

I must point out that the principal safety/security witness’s, (SD1) recollection of the timing and content of his alleged telephone enquiries to Immigration was inconsistent on crucial points, namely the date & time and which officer was contacted at JIM. When questions were put to him, he admits in uncertainty. In my view, that certainly undermines the reliability of his account during the said internal investigation, as a firm factual foundation for Nestlé’s decision-making, namely the disposal of the SSA in all 5 premises.

Therefore, this court concludes that, the so-called internal investigation was nothing more than a unilateral internal conclusion reached on an incorrect understanding of immigration procedures. The Defendants had failed to take into account, of the immigration practice and procedure in light of the Circular and the role of Special Pass/ VP(TE).

The courts in Lee Yen Hock v Avenue Golden Sdn Bhd [2014] 4 MLRH cautioned against parties invoking illegality as means to escape contractual obligations and therein rejected attempts to rely on immigration breaches where relevant authorities themselves had made no adverse finding similar to the facts of this present case. S/N hX8ngg2/U0OmHc5lFGb2g

The Plaintiff’s operational witnesses SP1, SP2 & SP3, gave evidence that established an earlier set of guards were deployed and vetted under the previous security manager, Mr. Shashi. The three named guards were deployed after request for replacements, and that documents had been handed to the Defendant’s representatives at the material time.

The immigration process was explained to the Defendants on 16.8.2022 during the Teams meeting with the Defendant’s previous Security Manager, Mr. Shashi before SD1 assumed the function of Mr. Shashi later. In my view, the missing vital point, in the Defendant’s case is the absence of Mr. Shashi, from the Defendant’s witness list who could testify on the disputed factual issues.

To my comprehension, this actually, deprived the Defendants of a probable material and a first‑hand account of earlier handovers that took place. This absence is a matter to be weighed, however, not a conclusive adverse inference, but a factor in evaluating the competing narratives. His absence leaves the Plaintiff’s evidence on the explanation of the immigration process, including the position pending issuance of VP(TE), wholly unrebutted. S/N hX8ngg2/U0OmHc5lFGb2g

This court notes that the contested Excel Tracker attached to the 28 October 2022, emails, exists in different versions. The evidence show that the tracker was an operational tool with editable fields, columns and that some cells were notably the Date Verified columns, reflecting the entries likely made by the Defendant’s side during their internal handling. I am unable to reach the conclusion that the said spreadsheet can be treated as a clear and definite contemporaneous admission by Uppal that the guards lacked valid VP(TE).

The Defendants in their submissions to court argued that the evidence given by SP4, the immigration officer, was in direct conflict with the Official Immigration Website and requested this court to take judicial notice of the official website following the case of Tahan Steel Corp Sdn Bhd v. Bank Islam Malaysia Bhd [2004] 6 MLJ 1 (HC). In my opinion the Defendants arguments on the above contention is incorrect, as guidance published on the official immigration website is not law. Guiding processes with documentary requirements are advisory in nature as they explain how laws or regulations are to be interpreted or applied, but they do not themselves carry legal force unless explicitly incorporated into legislation or regulation. S/N hX8ngg2/U0OmHc5lFGb2g

These guidelines stated on their official website, are flexible in nature as they can be updated more easily than laws, allowing agencies to respond quickly to new circumstances without legislative approval. The Defendants should treat it as a practical roadmap to compliance processes and not laws and regulations carrying a binding legal force.

In my opinion, the national immigration scheme governs the legality of foreign employment. The Circular provided by SP4 came into force on 15 May 2019. This was a practical modified administrative practice in providing Special Passes issued on entry for 30 days to allow FOMEMA (medical) screenings and related processing while an employer completes VP(TE) applications.

The Circular’s obvious purpose was to regularise status and permit lawful processing work, where the administrative practice is in sequence, providing an authorised transitional status. The Court’s task is not to decide on the validity of the circular or substitute administrative decisions but to determine whether at the material time, the guards’ presence at HOU was unlawful under the immigration regime. JIM’s own records and the Circular are therefore the principal legal and factual reference for this court. S/N hX8ngg2/U0OmHc5lFGb2g Contractual obligations (Clause 3 and Appendix deployment requirements):

Clause 3 is warranty section, requiring the service provider to have all necessary approvals, licenses and permits complying with all applicable laws including immigration. The Appendix 1, adds operational details to the sticker, on passports and responsibility on security company to monitor expiry. Clause 3(a): “The Service Provider hereby warrants and represents to Nestlé as follows: that it has all the necessary approvals, licenses and permits from the relevant authorities for the provision of the services and it shall comply with all applicable laws, regulations, by-laws or enactments in connection with the performance of the services herein, including, but not limited to, all employment, environmental, health and safety related laws” Clause 3(i): “The Service Provider hereby warrants and represents to Nestlé as follows: that it shall comply with all applicable laws relating to and/or regulating its staff, workers and employees, including and not limited to immigration and employment laws...” S/N hX8ngg2/U0OmHc5lFGb2g Appendix 1: “B. Deployment of Foreigner Security Guards

Valid work permit/visa for Immigration Department of Malaysia with Security company name mentioned …..

Sticker of work visa / permit pasted on original passport of origin

The onus is on the Security company to monitor the expiry of permit/visa of their guards …

To summarise, Clause 3 imposes an obligation on compliance, it does not, however, rigidly prescribe that the form (sticker on passport) must be the only determinative test of legality in every circumstance. The Clause must be read in context and in light of applicable immigration laws and administrative practices, namely was there a temporary/special pass granted by JIM and what was supposed to be attached to the passports. A contractual clause that requires compliance with all applicable laws must be interpreted so that it is compatible with administrative practice. In my opinion, a construction that would make compliance impossible or inconsistent with public law should be rejected as in the Defendants contentions. S/N hX8ngg2/U0OmHc5lFGb2g

The Appendix 1 requirement for a sticker is plainly an operational safeguard for Nestlé’s immediate documentary means to establish on‑site legality, in the event of an inspection by the authorities. It is, however, not a substitute for the legal position under immigration law and related administrative arrangements to outrightly terminate the SSA. Whether the three guards were lawfully permitted to work:

Applying the Circular to the contemporaneous MyIMMS entries and the documentary record, the evidence establishes that:

Kaladhar and Shankar arrived in Malaysia in early September and mid late August 2022 respectively, with VDRs and were issued Special Passes at entry.

(ii) Their VP(TE) applications were lodged right after arrival and the VP(TE) stickers were issued subsequently in November/December 2022. The JIM’s documentation record, show a validity period that, operationally, runs from the commencement date (MyIMMS date) to the recorded expiry in 12 months. The MyIMMS snapshots produced, carry evidential weight, showing the recorded starting dates coincides with the dates the persons came into Malaysia. S/N hX8ngg2/U0OmHc5lFGb2g

(ii) Govind’s status was on a recalibration (PATI) track and similar steps were undertaken for a subsequent application, leading to VP(TE) recorded as operative from 1 September 2022 with recorded expiry 31 Aug 2023.

The Circular and the MyIMMS records permit this courts conclusion that the three guards were lawfully processed and that a Special Pass (or other entry authorisation) during the interim period, allowed their lawful presence and by the Circular’s terms and practice, permitted to work pending final VP(TE). No reliable material on JIM’s decision was placed in evidence which declared any of the three guards as unlawful at the times the were deployed to Nestle’s premises. On the contrary, the JIM’s record and the immigration witness’s explanation of system practice, fully support the lawful presence of the said three guards. Termination, notice and waiver/estoppel:

In my view, the Termination Letter expressly relies on deployment of the said guards, are without the valid VP(TE) and the alleged criminal exposure under immigration law. After reviewing all the evidence before this court, I can conclude that, that premise above is false, and the guards were lawfully permitted to work under JIM’s practice and records and the ostensible basis of termination, falls away. S/N hX8ngg2/U0OmHc5lFGb2g

As to Clause 8(c)(i) of the agreement, Nestlé had the contractual right to serve a written notice to remedy the issues in 14 days but had no absolute duty to use that instrument to terminate the SSA without the remedy firstly, being exhausted by both parties. Nonetheless the contractual language, read with the SSA as a whole, confirms that notice to remedy and a period of fourteen days (14) to cure is intended for remediable breaches.

Termination …

Termination due to breach by the Service Provider

(I). If at any time during the term of this Agreement, the Service Provider shall commit a breach or threatens to commit a breach of any of its obligations under this Agreement, then Nestlé shall have the right to serve upon the Service Provider a written notice requiring the Service Provider to remedy the breach within fourteen [14) days thereof, failing which it shall be lawful for Nestlé to give a notice in writing to the Service Provider of the immediate termination of this Agreement and upon the issuance of such notice, this Agreement shall, subject to subclause f], terminate absolutely… S/N hX8ngg2/U0OmHc5lFGb2g

But where a breach is said to be fundamental and irremediable, immediate termination may be available. However, the characterisation of that breach as irremediable is very much fact‑dependent. The evidence before me, establishes that Nestlé repeatedly sought documentation, issued reminders, met with Uppal and granted (or allowed) time extensions including an express extension to 28 October 2022.

Those communications were not drafted explicitly to encompass a Clause 8 notice, running the express course of remedy within 14 days failing which termination will follow. In my view, they were rather requests, reminders and operational follow‑ups in a continuing commercial relationship. Where a party by its own conduct invites or accepts continued performance it may be prevented from asserting immediate termination on the ground of an earlier, curable breach.

The chronology shows that after receiving documents on 28 October 2022 Nestlé did not give an immediate Clause 8 notice but instead it issued internal enquiries and on 2 November 2022 the Defendants suspended access and the Termination Letter followed on 7 November 2022. The record does not show that Nestlé gave Uppal an intelligible written notice in the form required by Clause 8(c)(i) specifying the breach and giving 14 days to remedy before termination at HOU. S/N hX8ngg2/U0OmHc5lFGb2g Disciplinary incidents (CCTV and ice‑cream) and their legal effects

The CCTV incident and the alleged thefts of ice-cream in the HOU were real events of operational concern. Uppal acknowledged internal discipline issues and took steps to investigate and offered to replace the guard and to make good. Based on the evidence and records before me, Nestlé did not rely upon the disciplinary incidents in its Termination Letter and that issue was treated operationally at the time.

The disciplinary incidents do not provide an independent contractual or statutory basis to terminate the SSA in the manner and timeline deployed by Nestlé. In my opinion, they were not pleaded or particularised as foundational to termination in the contemporaneous notice and the Plaintiff took remedial steps.

Nestlé’s later, attempts to rely upon these matters as additional grounds is an after‑the‑event rationalisation. A party who accepts remedial offers and allows performance thereafter cannot, except in clear circumstances, rely on the same events as reason for immediate termination. S/N hX8ngg2/U0OmHc5lFGb2g

On the evidence and findings above, the core factual premise advanced by Nestlé in justification for termination of the SSA in all 5 premises, that the said three guards were deployed and worked unlawfully throughout the material period because they lacked valid VP(TE) has not been established. The immigration records and the immigration witness evidence, taken together with the Circular, show the guards were recognised in the immigration system and under prevailing administrative practice, were permitted to be in employment pending completion of VP(TE) processing.

The Defendant’s termination letter therefore proceeded on an erroneous factual premise as the Defendant’s subsequent conduct such as the reminders, extensions, and acceptance of documents, are inconsistent with an immediate irremediable breach. Furthermore, the Defendant’s reliance on Clause 8 as a basis for immediate termination at HOU together with the subsequent termination of all other premises according to the SSA, is not supported by the overall factual conditions.

In my view, employers and service contractors operating in regulated sectors must observe statutory requirements. Where immigration law and administrative practice provide a lawful processing route that permits work pending formal issuance of a S/N hX8ngg2/U0OmHc5lFGb2g sticker or document, commercial parties should use contemporaneous communication with the competent authority where there is doubt and preserve records of advice. A decision to terminate on grounds of illegality should be supported by clear, contemporaneous administrative confirmation from the competent agency. In this case, I find the Plaintiff’s claim that the termination was unlawful is therefore well founded. Orders and relief

It is declared that the Defendant’s suspension and termination of the SSA in respect of HOU on 7 November 2022 was not justified on the grounds advanced in the Termination Letter and was unlawful. This Court orders as follows: a. Declaration that the Defendant’s suspension and termination of the SSA at HOU on 7 November 2022 was not justified and was unlawful; b. The Defendant’s counterclaim to be dismissed; c. Damages in lieu as in para b for a total of RM 3,891,744.42 d. Exemplary damages of RM 30,000.00 S/N hX8ngg2/U0OmHc5lFGb2g e. Interest at 5% per annum from the date of the Writ until full payment; f. Cost of RM 50,000.00 subject to allocator Dated : 1 April 2026 SGD SHOBA DORAI RAJAH JUDICIAL COMMISSIONER SHAH ALAM HIGH COURT Solicitor for the Plaintiff: Dato’ Gobinath A/L Mohanna [MESSRS THE LAW OFFICE OF MOHANNA & CO.] Solicitor for the Defendants: DAWN WONG KENG JADE With Nathaniael Chuah (PDK) [MESSRS STEVEN THIRU & SUDHAR PARTNERSHIP] S/N hX8ngg2/U0OmHc5lFGb2g