The court determined that failure to fulfill contractual obligations, including obtaining necessary approvals, led to unjust enrichment and mandated restitution.

Introduction

[1] The Plaintiff had filed this action against the Defendants seeking the return of the sum of USD3,500,000.00 that he had paid to the Defendants for the purchase of Shares (as defined below) in Asia Commercial Pacific Bank Inc ("APC Bank"), a bank in the Republic of Palau. The sale and purchase of the Shares were pursuant to a sale and purchase agreement dated 5 May 2017 ("SPA") between the Plaintiff and the Defendants.

[2] The Defendants are the owners of 1,405,000,000 ordinary shares, representing all the issued and paid-up share capital (the "Shares") of APC Bank. The Defendants agreed to sell and the Plaintiff agreed to purchase the Shares from the Defendants, subject to the terms and conditions of the SPA. The consideration payable by the Plaintiff to the Defendants for the Shares is the purchase price of USD3,500,000.00.

[3] It is an agreed fact that the Plaintiff had paid the total purchase price of USD3,500,000.00 for the Shares to the Defendants. The sum of USD2,800,000.00 was paid to the 1st ("D1") and 3rd Defendants ("D3"), and the sum of USD700,000.00 was paid to the 2nd Defendant ("D2").

[4] However, the Defendants failed to transfer the Shares to the Plaintiff after receiving the total purchase price from the Plaintiff.

[5] D1 and D3 agreed to return the sum of USD2,800,000.00 to the Plaintiff pursuant to a Settlement Agreement dated 28 July 2021 between them ("Settlement Agreement"). Subsequent to the Settlement Agreement, the Plaintiff discontinued his suit against D1 and D3 on 8 December 2021.

[6] D2 refused to return the sum of USD700,000.00 to the Plaintiff.

[7] Thus, the trial of this action proceeded against the D2 alone. The Plaintiff's witness was the Plaintiff himself ("PW1") and Datuk Wan Mohd Fadzil bin Maamor ("PW2"), a partner of the law firm Messrs Fadzil & Eddin ("Messrs. F&E") who had acted for the Defendants in the SPA ("PW2"). D2's only witness was himself.

The Plaintiff's Case

[8] The Plaintiff pleaded that the Defendants failure to transfer the Shares in APC Bank or to return the sum of USD3,500,000.00 to him, is a breach of contract.

[9] The Plaintiff also pleads that D2 had unjustly enriched himself by either failing to transfer the Shares in APC Bank owned by D2 or alternatively, failing to return the portion of the purchase price he had received to the Plaintiff.

[10] The Plaintiff seeks from D2 the return of the sum of USD700,000.00.

The 2nd Defendant's Defence

[11] D2 takes two different positions in his defence. The 1st position is that the sale of the Shares was completed once the SPA had been executed. The 2nd position is that D2 had the right to forfeit the sum of USD700,000.00 because the Plaintiff had failed to obtain the Republic of Palau's Financial Institution Commission's ("Palau FIC") approval for the Plaintiff's acquisition of the Shares in APC Bank.

Issues To Be Tried

[12] The main issues to be tried between the Plaintiff and D2 are:

(a) Has the SPA and the sale of Shares been duly completed?

(b) Have the Shares belonging to D2, in fact, been transferred to the Plaintiff upon D2's receipt of the full purchase price from the Plaintiff? and

(c) Is D2 entitled to forfeit the sum of USD700,000.00??

(a) Has the SPA and the sale of Shares been duly completed?

[13] D2 relies on cl 7 of the SPA, entitled "Mechanics of Completion" to argue that the sale of the Shares has been completed once the SPA has been executed. Clause 7 reads:

7. Completion

Mechanics of Completion

This Agreement shall be the conclusive document to proof the transfer of ownership of the Bank to the Purchaser and th