Integrity of evidence is critical in injunction applications; compromised evidence leads to dismissal of requests for injunctions.

[1] Both encls 1 and 2 seek what is in essence the same relief; and that is a Fortuna injunction restraining the Defendant from presenting a winding-up petition against the Plaintiff based on the notice of demand dated 30 March 2012 issued under s 218 of the Companies Act 1965 .

[2] Pursuant to the ex parte application found at encl 2, the Court granted the Plaintiff an interim Fortuna injunction. It is supported by an affidavit affirmed on 20 April 2012 which can be found at encl 3.

[3] Upon an inter partes hearing, that order was set aside. The Court then fixed a date for the assessment of damages purportedly suffered by the Defendant during the period when the order was in effect. That assessment was disposed on 24 May 2012 with the Court finding no damage had been proved.

[4] The Petitioner is dissatisfied with my decision to set aside the interim injunction and has appealed. These are my reasons for my decision which I had given in brief at the time of the order.

Background Facts

[5] Sometime in October 2011, the Plaintiff and the Defendant were involved in inter alia the construction and development of a bio-ethanol processing plant and related facilities at a site at Shah Alam, Selangor A Letter of Award dated 5 October 2011 was issued by the Plaintiff to the Defendant. Around the same time, the parties had also entered into a Subscription Agreement. Under the Subscription Agreement dated 10 October 2011, the Plaintiff agreed to issue and allot 20 million ordinary shares in the Plaintiff to the Defendant at a subscription sum of RM20 million. The Defendant paid RM2 million as a deposit for that purchase. The subscription of the Plaintiff's shares was subject to certain conditions precedent.

[6] A dispute subsequently arose between the parties in respect of both the construction and development of the bio-ethanol processing plant and the sale of the shares under the Subscription Agreement. The Plaintiff claimed that because the Defendant did not satisfy the requirements under the Letter of Award when it failed to provide the Plaintiff the relevant documentation, the Plaintiff terminated the Letter of Award. The Plaintiff claimed that the Defendant had not objected to the termination. The related documents including letters dated 23 February 2012 and 24 February 2012 were exhibited.

[7] In relation to the Subscription Agreement, the Defendant wrote to the Plaintiff on 28 February 2012. In its letter, the Defendant raised the matter of the Plaintiff's request for an extraordinary general meeting to replace the current board of directors of the Defendant "with new persons where some of such persons are also the directors" in the Plaintiff. The Defendant claimed that in so doing the Plaintiff was in breach of its undertaking under cl 7.6 of the Subscription Agreement. The Plaintiff was given time to remedy the alleged breach failing which the Defendant would proceed to terminate the Subscription Agreement. The Plaintiff claimed to have responded to this letter through its letter dated 2 March 2012.

[8] Ensuing from this, the Defendant filed civil action at the High Court at Kuala Lumpur Suit No 22NCC-366-03/2012. In that suit, the Defendant and its Managing Director alleged that the Plaintiff and seven others inter alia conspired to injure and defraud the Defendant in relation to the purchase of the shares mentioned earlier The reliefs sought included injunctions restraining the Plaintiff from removing the directors and replacing them with new persons That action is still pending.

[9] Meanwhile, the Defendant issued a Notice under s 218 of the Companies Act 1965 demanding that the Plaintiff refund and settle the RM2 million deposit paid under the Subscription