The court emphasized that a party's withdrawal of a counterclaim without liberty to file a fresh is justified when the party shows unpreparedness for trial, potentially prejudicing the opposing party.

A. Introduction

[1] This judgment deals with two matters:

a. The first is the defendants' application to withdraw their counterclaim ("Counterclaim"), with liberty to file a fresh ("Withdrawal Application"). The court allowed the Withdrawal Application, only to the extent of the withdrawal of the Counterclaim. The withdrawal is however allowed without liberty to file a fresh.

b. The second is a direction given in the course of trial, after the withdrawal of the Counterclaim. The court struck out parts of the witness statement of the defendants' witness, Kamalanathan Karthik ("DW2's Witness Statement"), which contain evidence related to the Counterclaim.

[2] The reasons for the court's decision to allow the withdrawal of the Counterclaim without liberty to file a fresh, and for the consequent direction to strike out parts of DW2's Witness Statement, are set out below.

B. Background Facts

[3] The plaintiff and the 1st defendant are part of a consortium formed for the purpose of the construction and operation of a mobile offshore production unit ("MOPU") for the Petronas Bayan Lepas Redevelopment Project Gas Phase 2 ("Project") operated by Petronas Carigali Sdn Bhd.

[4] The consortium was formed pursuant to a heads of agreement dated 12 March 2020, executed between the plaintiff and the 1st defendant ("HOA"). The HOA also sets out the plaintiff and 1st defendant's responsibilities in relation to the Project.

[5] The relationship between the parties broke down. In view of resolving claims that parties had against each other, the plaintiff and the defendants entered into a joint settlement agreement ("JSA") and an intellectual property protection agreement ("IPPA") on 23 September 2020.

[6] However, the plaintiff claimed that the defendants failed to perform the conditions precedent of the JSA. Further, the plaintiff also claimed that the 1st defendant had made untrue and defamatory statements in letters issued to third parties in July 2020 ("July 2020 Letters"), alleging misuse by the plaintiff of the 1st defendant's intellectual property ("VME's IP").

[7] Thus, the plaintiff sought the following in this suit:

a. A declaration that the JSA and the IPPA are null and void and/or unenforceable; and

b. An order for the publication of a full apology from the 1st defendant on the statements in the July 2020 Letters.

[8] The plaintiff also sought to recover the sum of USD5,500,000 which it alleged had been paid to the 1st defendant.

[9] The defendants in turn counterclaimed that the plaintiff had misused VME's IP, as it had continued to use VME's IP for the purpose of the Project after the 1st defendant's exit from the consortium.

C. The Withdrawal Application

The Defendants' Application To Withdraw The Counterclaim

[10] The defendants' application to withdraw the Counterclaim was made on the third day of trial on 5 April 2023, after the plaintiff's sole witness, Tan Kay Zhuin ("PW1") had completed his testimony, and after the plaintiff had closed its case.

[11] Learned counsel for the defendants, Mr TS Oon, had initially made an oral application to withdraw the Counterclaim with liberty to file a fresh. In response to the oral application, learned counsel for the plaintiff, Ms Su Siew Ling, confirmed that the plaintiff did not object to the withdrawal of the Counterclaim, but objected to withdrawal with liberty to file a fresh.

[12] Thereafter, the court directed the de