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2025 MarsdenLR 3310
HIGH COURT MALAYA KUALA LUMPUR
IFCI LIMITED – Appellant
Versus
BISHOPGATE CAPITAL LIMITED & ANOR – Respondent
[Suit No: WA-22NCC-705-12/2019]
The court found that failure to comply with loan conditions does not invalidate obligations under the Promissory Note or insurance policy; assignment was valid and indemnity due to Plaintiff upon breach by the 1st Defendant.
Headnote:(A) Contracts Act, 1950 - Promissory Note Transaction Agreement - Credit Default Risk Insurance Policy - Breach of contract and liability for payment - 1st Defendant failed to pay USD 10 million under Promissory Note upon maturity; 2nd Defendant denied liability under the insurance policy claiming prior defaults and fraud - Court finds that 1st Defendant is liable for sums due under Promissory Note; AIL policy remains valid as it was properly assigned and conditions for indemnity satisfied. (Paras 66, 88, 141-148)
(B) Jurisdiction - High Court refuses to stay proceedings for arbitration since Defendants did not challenge jurisdiction at the outset and participated actively in the proceedings. (Paras 72-75)
(C) Plaintiffs' burden - Plaintiff must prove compliance with terms of Promissory Note and entitlement to indemnification under AIL policy; Court finds evidence substantial in favor of Plaintiff, rejecting Defendants' allegations as unsubstantiated. (Paras 176-185)
(D) Summary judgement in favor of the Plaintiff and orders for payment of specific sums due under both agreements, along with costs awarded. (Paras 185) (E) Parties: 1st Defendant, 2nd Defendant, Plaintiff.
| Table of Content |
|---|
| 1. introduction to plaintiff's claims. (Para 1 , 2 , 3) |
| 2. material terms of credit default risk insurance. (Para 4 , 5 , 6) |
| 3. short-term loan agreement details. (Para 8 , 9 , 14 , 16) |
| 4. claims filed officially post default. (Para 19 , 20 , 21) |
| 5. 2nd defendant's denial of liability. (Para 25 , 27) |
| 6. defendants' arguments and counterclaims. (Para 39 , 40 , 41 , 43 , 55) |
| 7. trial proceedings note. (Para 62 , 63) |
| 8. court issues for determination. (Para 64 , 66) |
| 9. jurisdiction issues. (Para 68 , 69 , 72) |
| 10. court's findings and summary. (Para 182 , 183) |
A. Introduction
[1] The Plaintiff claims that the 1st Defendant breached the terms of the Promissory Note Transaction Agreement dated 20 November 2017 and that the 2nd Defendant failed to pay the sums that are due under the Credit Default Risk Insurance Policy dated 20 November 2017.
B. Background Facts
[2] The 1st Defendant entered into a Promissory Note Transaction Agreement dated 20 November 2017 (PN) with Calfin Capital Private Limited (Calfin) and Gouttephone Technology Private Limited (GTPL). Calfin purchased the PN bearing number BGLPN001 to the value of USD 10 million from the 1st Defendant and assigned its benefit to GTPL.
[3] The salient terms of the PN are as follows:-
3.1 The 1st Defendant promised to pay GTPL the sum of USD 10 million on the maturity date of the PN with interest at the rate of 6.5% per annum in arrears.
3.2 The maturity date of the PN was on 19 November 2018.
3.3 The obligation to pay the sum of USD 10 million with the aforesaid interest is unconditional and represents and irrevocable undertaking to GTPL or any other bona fide holder of the PN on the maturity date upon the presentation for payment of the PN at the registered office address of the issuer.
3.4 If the 1st Defendant fails to pay the sums promised under the terms of the PN then the said Defendant shall bear all reasonable costs for collection and even solicitors fees.
3.5 The rights under the terms of the PN are assignable to any endorsee of the said PN.
[4] The 1st Defendant had also purchased a Credit Default Risk Insurance Policy dated 20 November 2017 with a policy reference number AG1320170020 (AIL Policy).
[5] The material terms of the Credit Default Risk Insurance Policy are as follows:
(note obligee refers to the Plaintiff and obligor refers to the 1st Defendant)
[6] I also note that the cover note to the said policy also provides:
[7] This Court also notes that the 2nd Defendant's endorsement to the Insurance number 0002/20217 dated 26 December 2017.
[8] The Plaintiff granted a short-term loan to the sum of USD 8.5 million to GTPL as seen in the Letters of Intent dated 2 January 2018, 11 January 2018, and 9 March 2018. A Short Team Loan Agreement dated 19 January 2018 was also executed by the Plaintiff with GTPL.
[9] As security for the said loan, GTPL assigned all of its rights and benefits under the PN to the Plaintiff.
[10] The 1st Defendant issued a letter dated 15 January 2018 that was addressed to whosoever may be interested in the said PN and stated as follows:
10.1 The redemption of the PN requires the holder of the said instrument to send the original note to the 1st Defendant seven days before the maturity date specified on the PN.
10.2 The registered address of the 1st Defendant is Bishopgate Capital Limited, Brumby Centre, Lot 42, Jalan Muhibbah, 8700 Labuan, FT Malaysia.
10.3 The Note holder shall confirm in writing that they are and will remain to be the Note holder on the maturity date and request payment.
10.4 Payment shall be made immediately after the maturity date of the Note into the bank account notified by the holder.
[11] GTPL had applied for financial assistance from the Plaintiff via an application dated 9 October 2017. This was approved by the Plaintiff as seen in the letter to GTPL dated 23 November 2017. A short-term loan of the amount to the sum of USD 8.5 million was approved by the Plaintiff to GTPL as shown in the letters dat
