A right of first refusal must be exercised in good faith and provide full disclosure of terms to allow the grantee a meaningful opportunity to match any third-party offers.

[1] This Originating Summons concerns the proper interpretation and implementation of a right of first refusal in a bancassurance agreement between the Plaintiff, Tokio Marine Life Insurance Malaysia Bhd ("TMLM"), and the Defendant, RHB Bank Berhad ("RHB"). The central issue is whether this right remains in force following RHB's conduct of a bid process for its future bancassurance arrangements, or whether the right has been discharged through RHB's actions. This matter raises important questions about the scope of first refusal rights in commercial contracts and the adequacy of steps taken to discharge such rights.

Background Facts

[2] On 29 December 2014, TMLM and RHB entered into a Bancassurance Arrangement Agreement ("Bancassurance Agreement') which replaced and superseded their earlier agreement dated 1 July 2010. Under the Bancassurance Agreement, RHB would distribute TMLM's conventional life insurance products through RHB's banking channels. The Bancassurance Agreement is for a term of 10 years commencing 1 January 2015 and expiring on 31 December 2024.

[3] Clause 3.2(b) of the Bancassurance Agreement provides that RHB grants TMLM a first right of refusal to extend the term, six months before expiry, to provide both parties with sufficient time to negotiate on the renewal of the Bancassurance Agreement. It reads:

"(b) RHB shall grant TM the first right of refusal to extend the Term, six (6) months before expiry of the Term, to provide both Parties with sufficient time to negotiate on the renewal of this Agreement."

[4] On 16 January 2024, RHB wrote to TMLM indicating that it would be embarking on a bid process for its bancassurance arrangement for purposes of price discovery. RHB proposed bringing forward the timeline for exercising the first right of refusal to coincide with this bid process.

[5] Through correspondence between January and February 2024, the parties negotiated a framework for implementing the first right of refusal. TMLM initially proposed in its letter dated 29 January 2024 that RHB would notify TMLM of the best offer received at the conclusion of the bid process. RHB responded on 7 February 2024 with an alternative three-step framework: TMLM would have access to bid information, RHB would make an offer after considering bids received, and TMLM would have six weeks to decide. TMLM accepted this framework by letter dated 20 February 2024.

[6] The bid process was conducted in two phases. Phase 1 involved non-binding indicative proposals, while Phase 2 required final binding proposals from shortlisted bidders. RHB appointed Bank of America Securities as its independent external advisor for the process.

[7] On 25 April 2024, after receiving bids from 10 insurance companies in Phase 1, RHB made an offer to TMLM setting out terms for a 20-year renewal. The offer included both conventional life and family takaful products, with an upfront access fee of RM1,850 million and various other financial considerations.

[8] TMLM declined RHB's offer on 20 June 2024. On the same day, TMLM submitted a Phase 2 bid jointly wi