The issuance of a statutory notice under Section 466(1) of the Companies Act 2016 constitutes an abuse of process when there is an ongoing civil dispute regarding the same debt, warranting a Fortuna injunction.

JUDGMENT

Atan Mustaffa Yussof Ahmad J:

[1] Before the court is an application for a Fortuna injunction to restrain the presentation of a winding-up petition pursuant to a statutory notice of demand issued under s 466(1) of the Companies Act 2016 . The statutory notice was issued while civil proceedings between the parties claiming for the same debt are still pending before the Sessions court, where applications for stay of proceedings pending arbitration and assessment of damages for a wrongfully obtained Mareva injunction remain to be disposed of. The key issues before this court are whether there exists a bona fide dispute regarding the debt, whether the issuance of the statutory notice constitutes an abuse of process given the pending civil proceedings, and whether a Fortuna injunction should be granted in the circumstances.

Background Facts

[2] The salient facts leading to this application are as follows. The Plaintiff and Defendant entered into two vessel charterparty agreements dated 24 March 2022 and 27 August 2022 respectively. Both agreements contained arbitration clauses providing for disputes to be referred to the Kuala Lumpur Regional Centre for Arbitration. The arbitration clause appears in both charterparty agreements (Time Charter Party OS One dated 24 March 2022 and Time Charter Party TP1 dated 27 August 2022). The clause is found in Box 34 and reads as follows:

"34. BIMCO Dispute Resolution Clause

(c) This Charter Party shall be governed by and construed in accordance with the laws of Malaysia and any dispute arising out of or in connection with this Charter Party shall be referred to arbitration at Kuala Lumpur Regional Centre for Arbitration, Malaysia subject to the procedures applicable there."

[3] On 23 June 2023, the Defendant's former solicitors issued a notice of demand for RM368,315.93 against the Plaintiff. The Plaintiff paid RM187,136.00 in July 2023, being the undisputed portion, and the Plaintiff's former solicitors issued a letter dated 11 July 2023 disputing the balance sum.

[4] On 10 October 2023, the Defendant commenced an action in Kuala Lumpur Sessions court Suit Number WA-A52NCvC-813-10/2023 ("Suit 813") claiming for RM240,260.63 being the outstanding sum under the charterparty agreements. The Defendant obtained an ex parte Mareva injunction against the Plaintiff on 15 November 2023, which was subsequently set aside by the Sessions court on 21 February 2024 with costs.

[5] The Plaintiff filed an application under s 10 of the Arbitration Act 2005 in Suit 813 for a stay of proceedings pending arbitration, which is fixed for decision on 6 December 2024. The Plaintiff also filed an application for assessment of damages pursuant to the setting aside of the ex parte Mareva injunction, which is pending further directions by the Sessions court.

[6] Despite Suit 813 being active, on 15 July 2024, the Defendant issued the impugned statutory notice of demand under s 466(1) of the Companies Act 2016 against the Plaintiff claiming for the same sum of RM240,260.63. The Plaintiff wrote to the Sessions court and Defendant on 22 July 2024 seeking to expedite the decision of the stay application and the Defendant's position on the same. The Defendant did not respond to the Plaintiff's letter.

[7] Instead, on 14 August 2024, the Defendant wrote to the Sessions court to withdraw Suit 813 without any order as to costs. This letter was not received by the Sessions court and was only filed by the Defendant at 5.58pm on 16 August 2024 after the Plaintiff's solicitors highlighted this omission. The Plaintiff objected to the withdrawal of Suit 813 as being prejudicial to the Plaintiff. As at the date of hearing of encl 1, Suit 813 remains active with no withdrawal order made.

The Plaintiff's Originating Suumons

[8] The Plaintiff's Originating Summons seeks: (1) a declaration that the statutory notice of demand under s 466(1) Companies Act 2016 dated 15 July 2024 issued by the Defendant is invalid and an abuse of process; a