The burden of proof in civil disputes lies with the party asserting a claim or defense, as established in the Evidence Act; contractual obligations must be fulfilled as per agreed terms.

Introduction

[1] The Plaintiff's claim arises from an exclusive distribution agreement entered into with the Defendant for the sale of its medical products. Pursuant to the agreement, the Plaintiff supplied goods to the Defendant but failed to receive payment of RM311,371.25, being the value of goods supplied. Hence, the present suit.

[2] The Defendant in its defence denies its liability to pay the amount claimed claims as the Plaintiff had breached its obligations under the agreement. In addition, the Defendant claims the directors of the Plaintiff had made misrepresentations which were both negligent and fraudulent pertaining to its products for which it seeks a counterclaim against the Plaintiff.

The Case For The Plaintiff

[3] The Plaintiff is a locally incorporated company. It is in the business of manufacturing examination gloves, non-woven medical products, face mask and other related products. It is also a wholesaler, dealer, retailer, exporter for all kinds of rubber and plastic products manufactured by the Plaintiff. It had been in this business for about 23 years.

[4] On 3 May 2016 the parties entered into an agreement referred to as Exclusive Distributorship Agreement ("EDA"), where the Defendant was appointed as the sole and exclusive distributor of the Plaintiff's medical products listed in Schedule A to the agreement. Prior to the execution of the EDA, parties engaged in discussion and negotiation with respect to the collaboration they intended to enter into. The EDA was for a period of 2 years from 3 May 2016.

[5] Amongst the principal terms of the EDA were the following. The Defendant agreed on a 1st order with the minimum purchase worth of RM3.8 million of the Plaintiff's products, to be paid in 4 equal instalments at specified intervals. For the 1st year of the agreement, the Defendant was to order a minimum of RM6.6 million worth of goods. For the 2nd year, the order was to be increased to RM8.4 million. All payment for orders were to be made on a 100% basis after 45 days of the delivery order, failing which a 10% interest per annum penalty shall be imposed.

[6] Pursuant to the EDA, the Defendant ordered products from the Plaintiff, which were duly supplied based on the purchase orders issued. However, payment for the goods purchased by the Defendant fell into arrears in 2017. The Plaintiff sent reminders requesting for payment, but to no avail. On 26 October 2017, the Plaintiff terminated the EDA and instructed its solicitors to demand that the payment due be settled within 14 days from the date of demand.

[7] In response to the demand of the Plaintiff, the Defendant through its director, one Sunny Lim proposed to resolve the issue on the outstanding payments amicably. He offered to make payments in 6 monthly instalments commencing 15 November 2017 in an undated letter. The said letter was communicated to the Plaintiff through an email dated 9 November 2017.

[8] The offer to settle the outstanding amounts was not followed through causing the Plaintiff to commence the present action. At the time of filing the action, the amount claimed was a higher sum. However, upon perusing the Defendant's Amended Defence and Counterclaim which alleges that only a sum of RM311,371.25 is due, and upon verifying with the Plaintiff's records, the Plaintiff now seeks to recover only the sum of RM311,371.25 against the Defendant. The final amount claimed is confirmed in its Amended Reply and Amended Defence to the Counterclaim.

The Defence And Counterclaim Of The Defendant

[9] The Defendant contends that the Plaintiff did not hold up its end of the bargain under the EDA