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2025 MarsdenLR 5006
HIGH COURT MALAYA KUALA LUMPUR
ZAVARCO BERHAD & ANOR – Appellant
Versus
BANK PEMBANGUNAN MALAYSIA BERHAD – Respondent
[Civil Suit No: WA-22NCC-395-08/2022]
Contracts procured by bribery are enforceable, while those to pay bribes are not; allegations of fraud require concrete evidence, and res judicata applies to previously adjudicated matters.
Headnote:(A) Rules of Court 2012 - Order 18 Rule 19(1)(b) and (d) - Application to strike out Writ and Statement of Claim based on grounds of res judicata and no fraud established by plaintiffs - Court finds that plaintiffs' claim constitutes a collateral attack on a previously adjudicated judgment addressing similar issues. (Paras 14, 18, 40-46)
(B) Legal Principles - Contracts procured by bribery remain enforceable; only contracts to pay bribes are unenforceable; allegations of fraud must be supported by sufficient detail - The earlier judgment cannot be impeached on mere allegations. (Paras 27-29, 33)
Facts of the case:
The plaintiffs sought to impeach a prior judgment due to alleged fraud, misrepresentation, and concealment of material facts concerning a loan guarantee they provided, after a bank's earlier application for recovery against them. (Paras 12, 22, 51)
Findings of Court:
The Court determined that the plaintiffs' claims were a collateral attack on the Judgment from Suit 313 and previously adjudicated fraud claims, with no new evidence justifying reopening the case. (Paras 51-52)
Issues: Whether the plaintiffs' fresh claims of fraud justify striking out their action and addressing res judicata in the context of interconnected lawsuits. (Paras 30, 34)
Ratio Decidendi: The Court ruled the plaintiffs failed to substantiate their fraud claims with the necessary detail, reaffirming that prior adjudications barred similar claims under the principles of res judicata. (Paras 10, 46)
Result: Application to strike out granted with costs awarded to the defendant.
| Table of Content |
|---|
| 1. application to strike out writs and statements (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 2. bpmb's arguments to strike out claims (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 3. zavarco and zulizman's opposition arguments (Para 22 , 23 , 24 , 25 , 26) |
| 4. law on contracts procured by bribery (Para 27 , 28 , 29 , 30 , 31 , 32) |
| 5. fraud allegations must be specific (Para 33 , 34 , 35 , 36 , 37) |
| 6. guarantor's responsibilities (Para 38 , 39 , 40 , 41) |
| 7. res judicata and issue estoppel principles (Para 42 , 43 , 44 , 45 , 46) |
| 8. collateral attack on final judgment (Para 47 , 48 , 49) |
| 9. conclusion and order of the court (Para 50 , 51) |
(Enclosure 15)
[1] This was an application by the Defendant ("BBMP") to strike out the Plaintiffs' (Zavarco and Zulizman) Writ and Statement of Claim both dated 15 August 2022 pursuant to O 18 r 19(1)(b) and (d) of the Rules of Court 2012 and/or the inherent jurisdiction of this Court ("this Application").
[A] Salient Background Facts
[2] The essential chronology of events is as follows:
The Original Facility And Suit 313
[3] On 28 June 2012, BPMB granted a Term Loan Facility of RM400 million ("the Facility") to Aries Telecoms (M) Berhad ("Aries") for developing a fibre optic network around Peninsular Malaysia. Zavarco provided a corporate guarantee whilst Zulizman provided a personal guarantee dated 17 April 2017 for the Facility.
[4] When Aries was conducting its listing exercise in the UK, it requested more time from BPMB. BPMB agreed and granted an extension pending the listing exercise, but in return required a corporate guarantee from Zavarco and a personal guarantee from Zulizman.
[5] On 26 July 2018, BPMB commenced Suit No WA-22NCC-313-07/2018 ("Suit 313") [Bank Pembangunan Malaysia Berhad v. Aries Telecoms (M) Berhad & Ors [2023] MLRHU 2171] against Aries, Zavarco and Zulizman for recovery of monies due under the Facility. On 23 August 2018, Aries, Zavarco and Zulizman filed their Defence and Counterclaim alleging conspiracy by BPMB and its CEO to destroy Aries as an ongoing concern.
[6] On 25 September 2018, BPMB applied for summary judgment and also applied to strike out the Counterclaim. On 9 May 2019, the High Court (Nantha Balan J, as His Lordship then was) allowed both applications and entered judgment for RM451,266,763.13 together with interests and costs ("the Judgment"). The High Court also struck out Aries, Zavarco and Zulizman's Counterclaim.
The Appeal To The Court Of Appeal, Motion To Adduce Fresh Evidence And Leave To Appeal To The Federal Court
[7] On 13 May 2019, Zavarco, Zulizman and Aries appealed to the Court of Appeal. During the appeal, on 31 March 2021, news articles were published by "theedgemarkets.com" and "freemalaysiatoday.com" reporting the arrest of four individuals including BPMB's former president and managing director for receiving kickbacks related to the Term Loan Facility.
[8] On 29 September 2021, Zavarco, Zulizman and Aries filed a motion to adduce fresh evidence comprising these news articles. Specifically, they sought to adduce articles from "theedgemarkets.com" titled "MACC detains four including former bank president cum MD for suspected graft" and from "freemalaysiatoday.com" titled "Former bank president among 4 nabbed by MACC", both dated 31 March 2021. The articles reported that four individuals including BPMB's former president and managing director were arrested for receiving approximately RM8 million in "kickbacks" for approving the RM400 million loan. Zavarco and Zulizman argued that this evidence would satisfy the "smoking gun" that the High Court judge was looking for to support their claims of conspiracy and economic sabotage, and that it directly confirmed their defence and causes of action.
[9] On 12 November 2021, BPMB filed written submissions in the Court of Appeal opposing the motion, arguing that the news articles were not connected to or did not make any reference to the Term Loan Facil
