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2021 MarsdenLR 3993
HIGH COURT MALAYA SHAH ALAM
RHB BANK BERHAD – Appellant
Versus
BINA PURI HOLDINGS BHD (ENCL 9) – Respondent
[Civil No: BA-22NCC-37-03/2020]
The court ruled that triable issues existed regarding the interpretation of a foreign judgment and the terms under which indemnity was claimed, necessitating a full trial rather than summary judgment.
Headnote:(A) Rules of Court 2012 – Order 14 and Order 33 – Application for summary judgment – Plaintiff-bank claimed against the Defendant under a Guarantee and Indemnity concerning a Thai housing project – Summary judgment dismissed – Triable issues identified regarding Thai laws, including interpretation of 'final' in a judgment and implications of appeal on judgment suspension. (Paras 21-22, 26-41)
(B) Triable Issues – The court identified relevant triable issues of fact regarding the applicability of Thai law and the ambiguity surrounding the terms of payment under the Thai judgment that require a full trial for resolution. (Paras 26-41)
Facts of the case: The Plaintiff-bank issued guarantees for a joint venture project in Thailand, disputed payments under these guarantees when NHA demanded payment based on a Thai court judgment. The Defendant's liability for indemnity was contested based on the previous court ruling's interpretations. (Paras 1-20)
Findings of Court: Summary judgment was deemed inappropriate due to the presence of triable issues regarding Thai law and facts surrounding the Guarantee and Indemnity. (Paras 26-41)
Issues: The court addressed the interpretation of Thai judgment terms, effects of appeals on judgment enforceability, and the nature of payments made under guarantees. (Paras 21-33)
Ratio Decidendi: The court emphasized that a bank's obligations as a guarantor do not require them to question the merits of a beneficiary's demand, but liability under indemnity depends on strict adherence to agreement terms. (Paras 26-28)
Result: Application for summary judgment dismissed, and preliminary trial ordered for specific questions regarding Thai law. (Paras 42)
JUDGMENT
Enclosure 9: Application for Summary Judgment
Introduction
[1] The Plaintiff-bank sued the Defendant-company in respect of a guarantee and indemnity which the Defendant has issued in favour of the Plaintiff-bank in connection with a bank guarantee which the Plaintiff-bank issued to a Thai legal entity for a housing project carried out by the Defendant's Thai subsidiary company Bina Puri (Thailand) Ltd.
[2] The subject-matter of the claim in the Plaintiff-bank's suit herein is the remaining balance of the guarantee monies which the Plaintiff- bank paid into the Thai court after the Thai court gave a judgment in favour of the guarantee beneficiary, the National Housing Authority of Thailand. This remaining balance is the balance amount of the total guarantee monies which the Plaintiff-bank paid into the Thai court and which has not been recouped from Export-Import Bank of Malaysia Berhad under three Standby Letters of Credit as collateral security.
[3] By encl 9, the Plaintiff-bank applied for summary judgment under O 14 of the Rules of 2012 ("ROC 2012"). On 17 August 2021 the application for summary judgment was dismissed by this court on terms that an early trial of three preliminary issues be fixed for the disposal of this suit pursuant to O 33 r 2 of ROC 2012.
[4] Being dissatisfied with the said decision, the Plaintiff-bank has appealed against the entirety of the said decision.
Background Facts
[5] On or around 9 March 2006, the National Housing Authority of Thailand ("NHA") entered into a joint venture agreement with Bina Puri (Thailand) Ltd ("BPTL") and Deva Development Public Co Ltd for the construction of a housing project in Thailand [Affidavit-in-Reply filed by Tan Bee Pheng on 4 September 2020 ("Encl 14"), p 19-20, para 6(a)].
[6] At the request of BPTL, the Plaintiffs branch in Bangkok issued 3 bank guarantees in favour of NHA for a total principal sum of Baht 230,887,083.25 together with interest ("Bank Guarantees") [Affidavit-In-Support affirmed by Tan Bee Pheng on 4 August 2020 ("Encl 10"), Exhibit A-l; encl 14, p 19-20, para 6(a)].
[7] The Bank Guarantees were to secure performance of BPTL and the advanced payments received by them from NHA under the joint venture agreement noted in para 3 above [Encl 14, p 19-20, para 6(a)]. At all material times, the Defendant is the ultimate holding company of BPTL [Encl 14, p 20, para 6(b)].
[8] The Bank Guarantees were in turn secured by inter alia 3 Standby Letters of Credit issued by Export-Import Bank of Malaysia Berhad ("EXIM Bank") in favour of the Plaintiff for a total principal sum of Baht 230,887,083.25 ("SBLCs") [Encl 10, Exhibit A-2; encl 14, p 20, para 6(c)].
[9] On or around 24 January 2011, NHA demanded for payment from the Plaintiff under the Bank Guarantees. NHA subsequently commenced an action in the Central Administrative court of Thailand ("CAC Thailand") against inter alia BPTL and the Plaintiff and claimed for payment of the sum of Baht 263,924,580.20 from the Plaintiff under the Bank Guarantees, together with interest thereon from 30 November 2015 until the date of full payment [Encl 10, Exhibit A-3; encl 14, p 21, para 7(a) and (b)].
[10] At the request of BPTL and the Defendant, the Plaintiff agreed to temporarily withhold payment under the Bank Guarantees subject to inter alia the following terms and conditions set out in the Plaintiffs letter dated 3 November 2016 [Encl 14, p 21, para 7(c); encl 10, Exhibit A-4]:
(a) The Defendant shall execute a guarantee and indemnity in favour of the Plaintiff;
(b) The Plaintiff agrees not to make payment to NHA under the Bank Guarantees:
(i) Unless the CAC Thailand or any appellate court, whichever is the earlier, orders the Bank to make payment under the Bank Guarantees;
(ii) Until the expiry of 3 years from the date of the letter; or
(iii) Unless in the absolute discretion of the Plaintiff, the Plaintiff is of the view that the validity or enforceability of any of the SBLCs are jeopardised, whichever
