The principle that the obligation to pay cannot be negated without an explicit agreement is upheld, affirming the enforceability of contractual terms.

Introduction

[1] The plaintiff has filed for summary judgment for the outstanding amount of RM14,908,922.91 related to construction works performed on the electrified double track project between Ipoh and Padang Besar, Malaysia, against the defendant.

[2] I allowed the summary judgment with interest and costs. Hence, this appeal is filed by the defendant, who is not satisfied with the decision of this Court .

Background Facts

[3] On 23 December 2009, the defendant received a letter of award, and on 23 December 2010, a contract was signed with a company known as MMC- Gamuda Joint Venture Sdn Bhd (hereinafter referred to as MGJV). This contract was for the construction, completion, testing, commissioning, and maintenance of the track works for the electrified double track project between Ipoh and Padang Besar in Malaysia.

[4] On 1 June 2010, the defendant subcontracted with the plaintiff to perform part of the works under the main contract. This resulted in additional supplemental agreements being entered between the plaintiff and defendant. The supplemental agreements are as follows:

(i) Supplemental agreement No 1 dated 2 June 2010;

(ii) Supplemental agreement No 2 dated 20 May 2011; and

(iii) Supplemental agreement No 3 dated 30 November 2017.

[5] The plaintiff and the defendant have maintained a longstanding commercial relationship characterised by mutual trust, respect, and cooperation. Throughout their previous transactions, both parties have consistently demonstrated good faith and honesty in their dealings.

[6] While executing the Sub-Contract works, the plaintiff experienced cost overruns and incurred losses totalling RM256,590,237.00. These financial impacts were primarily attributable to delays in access to the site, which was under the control of MGJV.

[7] Consequently, the parties executed Supplemental Agreement No 3, dated November 30, 2017, to formalise their collaboration in recovering the claim and final account detailed herein, which the plaintiff submitted to the defendant. Following this agreement, the defendant was obligated to undertake all necessary actions to pursue payment from MGJV as stipulated in the main contract, which may include legal measures, arbitration, or adjudication proceedings. In exchange for these efforts, the defendant would be entitled to RM7 million and 5% of any sum recovered from MGJV concerning the claim.

[8] In 2017, the defendant submitted a claim and the final account of all sums due and owed under the subcontract to MGJV, following Supplemental Agreement No. 3.

[9] Due to a dispute regarding the claim and final account outlined in Supplemental Agreement No 3, the defendant issued a Notice of Intention to Commence Arbitration to MGJV on 24 October 2018. Additionally, a payment claim was submitted in accordance with the Construction Industry Payment and Adjudication Act 2012 on 3 December 2018.

[10] In December 2018, MGJV filed a case against the defendant at Shah Alam High Court No BA-24C-110-12/2018.

[11] On 5 June 2019, MGJV offered to pay the defendant the sum of RM101,821,541.72 as a full and final settlement of the claim and the final account. The defendant accepted MGJV's offer with the plaintiff's approval and consent.

[12] The plaintiff and the defendant executed Supplemental Agreement No. 4 on 14 May 2019 to formalise their mutual understanding regarding apportioning the settlement sum.

[13] After receiving RM81,821,541.72 from MGJV, the defendant paid this amount to the plaintiff on or about 23 May 2019, in accordance with the terms of Supplemental Agreement No. 4.

[14] The said agreement expressly re