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2023 MarsdenLR 2226
HIGH COURT MALAYA KUALA LUMPUR
ENVIROVERKS (M) SDN BHD – Appellant
Versus
MEDINICS (M) SDN BHD – Respondent
[Suit No: WA-22NCC-224-05/2022]
The court ruled that oral representations do not expand the scope of a written agreement when the written terms explicitly limit the collaboration to specific products.
Headnote:(A) Contract Law - Oral Agreements - Breach of Contract - The court examined the terms of collaboration between the parties regarding the distribution of Covid-19 test kits, determining that the agreement was confined to the Beright Covid-19 Oral Fluid Test Kits only. The court found no evidence supporting claims of additional products being included in the collaboration. The claims by the Plaintiff for profits from other products and additional service fees were dismissed as lacking merit. (Paras 62, 70, 72)
(B) Terms of Collaboration - The court emphasized that the terms of the collaboration were explicitly stated in the draft agreements exchanged between the parties, which only referenced the Beright Covid-19 Oral Fluid Test Kits. (Paras 41, 60)
Facts of the case:
The Plaintiff sought to claim profits from a collaboration with the Defendant to market Covid-19 test kits, asserting that the agreement included additional products not disclosed by the Defendant. The Defendant contended that the agreement was limited to one specific product. (Paras 3-25)
Findings of Court:
The court found that the collaboration was strictly confined to the Beright Covid-19 Oral Fluid Test Kits, with no evidence of other products being part of the agreement. Claims for additional fees were also dismissed. (Paras 62, 70, 72)
Issues: The key issues were whether the collaboration included additional products and the validity of claims for profits and fees beyond the agreed terms. (Paras 29, 70)
Ratio Decidendi: The court held that the written draft agreements accurately reflected the parties' intentions, and any claims outside these terms were unfounded. The failure of the Plaintiff to prove the inclusion of the additional products in the collaboration was critical to the judgment. (Paras 60, 62)
Result: The claims by the Plaintiff against the Defendant were dismissed, with costs awarded to the Defendant.
| Table of Content |
|---|
| 1. collaboration agreement details. (Para 3 , 4 , 5 , 6 , 8 , 9 , 10 , 11 , 12 , 13) |
| 2. draft agreements and amendments. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 3. claims related to profits and services. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 4. breach of agreement claims. (Para 29 , 30 , 31) |
| 5. court's analysis on agreement terms. (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61) |
| 6. termination of collaboration analysis. (Para 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69) |
| 7. rejection of claims. (Para 70 , 71 , 72 , 73) |
Introduction
[1] This is a judgment after a full trial.
[2] The parties' disputes are over the actual scope of their collaboration to distribute and market certain covid-19 test kits which were much in demand during the Covid-19 pandemic that had claimed many lives during the period 2019 to 2022.
Background Facts
[3] When the viral infection of SARS-COV-2 ('Covid-19') was running rampant infecting the citizens in Malaysia, the Defendant, Medinics (M) Sdn Bhd ('Medinics') via one Dr Ravindran A/L Punniah @ Raman ('Dr Ravindran') on 9 July 2021 approached the Plaintiff, Enviroverks (M) Sdn Bhd ('Enviroverks') via one Mr Nitesh Malani A/L Mahendra Kumar ('Mr Nitesh' or 'PW1') and proposed to form a collaboration.
[4] Enviroverks claimed that the collaboration was intended to be a long-term relationship that focuses on the business of trading, supplying and or selling of the Beright's Coronavirus 2019 Test Kits ('the Beright's Covid-19 Test Kits').
[5] At that time, the application to allow Medinics to distribute the first Beright's Covid-19 Test Kits, namely, the Beright's Covid-19 Antigen Rapid Test Cassette (Oral Fluid) ('the Beright Covid-19 Oral Fluid Test Kits') was under way and pending approval from the Medical Device Authority ('MDA') of the Malaysian Ministry of Health.
[6] As Medinics lacked the financial capacity and the business networking to market the Beright's Covid-19 Oral Fluid Test Kits, it needed Enviroverks's helping hand to commence and or market the Beright's Covid-19 Test Kits business.
[7] It is not disputed that:
(1) there was a meeting held between Medinics and Enviroverks on 9 July 2021 with regards to the collaboration ('the 1st Meeting'); and
(2) the 1st Meeting was only attended by Dr Ravindran on behalf of Medinics and Mr Nitesh on behalf of Enviroverks.
[8] Enviroverks claimed that during the 1st Meeting, Dr Ravindran made several oral representations and or promises that had induced Enviroverks to enter into the collaboration with Medinics which were inter alia:
(1) Medinics and Enviroverks would collaborate to run a business of trading, supplying and or selling the Beright's Covid-19 Test Kits;
(2) The collaboration was meant to be a long-term business relationship;
(3) Enviroverks would inject capital funding in launching the business of the Beright Covid-19 Oral Fluid Test Kits into the market;
(4) Enviroverks would act as the negotiating consultant for the Beright Covid-19 Oral Fluid Test Kits business;
(5) Enviroverks would be entitled to a percentage of profit from the total sales of the Beright's Covid-19 Test Kits;
(6) Medinics would provide Enviroverks with access to the stocks and/or inventory of all of the Beright's Covid-19 Test Kits;
(7) Enviroverks would be provided with unlimited access to bookkeeping, auditing and accounting information pertaining to the collaboration that includes all of the transactions for the Beright's Covid-19 Test Kits;
(8) Enviroverks and Medinics would be responsible to disclose all facts, status, strategies and progress pertaining to the business of the Berigh's Covid-19 Test Kits starting with the Beright Covid-19 Oral Fluid Test Kits; and
(9) Enviroverks would be entitled to impose payments for the services rendered to Medinics that includes services for marketing, advertising and access to the government and corporate sectors.
('the Re
