The court ruled that the Plaintiff's claim was time-barred and lacked actionable grounds despite acknowledgment of an agreement.

Introduction

[1] Madujaya Enterprise Sdn Bhd [MJE], the Plaintiff seeks to recover from Kosbina Konsult Sdn Bhd [Kosbina] inter alia certain monies that Kosbina obtained in its arbitration case against the Government of Malaysia. The claim is resisted on several grounds amongst which are a denial of the existence of any contract between MJE and Kosbina; that the wrong claimant is before the Court; that there is no collateral contract; that the claim is time-barred. The trial saw MJE call three witnesses whereas Kosbina called two.

Plaintiff's Pleaded Case

[2] Kosbina was awarded a contract [Main Contract] by the Government of Malaysia for a project known as "Naik Taraf Laluan Persekutuan 136 Dari Persimpangan Jalan Masuk ke Lebuhraya Utara/Selatan Hingga Bandar Baru (Km 42-Km 50) [the said project]." The Main Contract was based on the JKR Standard Form of Contract 203A (1983 Revised) and the Supervising Officer (SO) was the Contract Administrator for the Government of Malaysia.

[3] Kosbina appointed various sub-contractors to construct and complete the said project. Amongst the sub-contractors was MJE. By letter of agreement dated 20 January 2005 [Letter of Agreement], Kosbina awarded to MJE a sub-contract to carry out and complete all of the remaining works that were supposed to have been constructed under the said project. The value of the Main Contract and the sub-contract was RM48,325,771.65.

[4] MJE claims that it had mobilized its machineries and workforce and had entered the site as early as 15 October 2004. Several problems arose in the course of the works which led to four extensions of time being given to Kosbina. As at 16 February 2007, 90% of the Main Contract works had already been completed.

[5] By letter dated 21 February 2007, the Government of Malaysia terminated the Main Contract. Consequently, the sub-contract under the Letter of Agreement was also terminated. MJE claims that as at the date of termination, Kosbina owed MJE the sum of RM12,600,930.14 for work done under the Letter of Agreement. MJE claims that as a result of the time extensions by Kosbina, it is also entitled to claim loss and expense.

[6] MJE claims that pursuant to cls 2, 3, 4 and 5 of the Letter of Agreement, both parties agreed to commence arbitration against the Government of Malaysia. Under cl 15 of the Letter of Agreement, it had agreed to bear all legal costs associated with the arbitration. It claimed that it was as a result of its sole efforts that the law firm of Messrs Siong & Rita [law firm] was appointed to represent Kosbina in the arbitration proceedings against the Government. It claimed that it had paid the initial legal fees requested by the law firm as well as the initial fees paid directly to the Kuala Lumpur Regional Centre for Arbitration [KLRCA].

[7] At para 23 of the Statement of Claim, MJE claims that by reason of the mutual conduct of the parties, there exists a collateral contract between the parties wherein the claims by Kosbina as claimant in the arbitration will be divided between the parties in accordance with the rates in the Letter of Agreement. MJE alleges that it was subsequently excluded from all communications and updates regarding the arbitration; and that the law firm had also failed to inform, update and advise MJE in the arbitration proceedings. MJE claimed that it was informed by one of the potential witnesses in the arbitration that Kosbina had intended to enter into a commercial settlement with the Government. That, however, did not materialize. The arbitration proceeded with an award was eventually published.

[8] MJE specifically alleges that Kosbina offered to pay RM6 million to MJE as full payment for all its rights under the Letter of Agreement a