Alauddin Mohd Sheriff JCA:

By way of an inter partessummons-in-chambers (encl. 7) the appellant (plaintiff in the High Court) applied before the learned judge for a mandatory interlocutory injunction compelling the abovenamed respondent (the defendant) either by themselves or through their servants or agents to deliver vacant possession to the appellant or their authorised agents the lands referred to as the 'operator's parcel' together with the assets/machineries which were leased to the respondent under the operator agreement dated 23 August 1999 upon the expiry of the said agreement on 14 February 2001 or by such other date as the High Court shall order.

Having heard the above application on 29 May 2001, the learned High Court judge dismissed it with costs. Hence the present appeal before us.

The Factual Background

At the outset, it is pertinent to mention that the above application by the appellant was initiated by the special administrators appointed to the appellant under the Pengurusan Danaharta Nasional Berhad Act 1998 (the Act). The Act was passed by Parliament in 1998 following the economic crisis in 1997. The scope of the Act is to provide for special laws for the acquisition, management, financing and disposition of assets and liabilities by the body called Pengurusan Danaharta Nasional Berhad (Danaharta), the appointment of special administrators with powers to administer and manage persons whose assets or liabilities have been acquired by Danaharta and for matters connected therewith or incidental thereto.

The appellant and respondent entered into what is called an operator agreement on 23 August 1999. Under this agreement the respondent, a company having experience and expertise in plywood manufacturing agreed to carry out manufacturing operations (activities) on part of the land (the operator's parcel) in the possession of the appellant as specified in the operator agreement, together with the assets/machineries on terms and conditions therein contained.

When the operator agreement was entered into between the appellant and respondent on 23 August 1999, the respondent was fully aware of the fact that the appellant was undergoing a restructuring scheme under s. 176 of the Companies Act as reflected in the preamble to the said agreement. There is no doubt that the respondent was at all material times fully aware of the critical financial position the appellant was in. In the circumstances, it would seem apparent therefore that this operator agreement was a short-term relationship between the parties.

Towards the end of 1999 when the appellant started to default in their loan repayments, Danaharta purchased their non-performing loans granted by various banks to relieve the banks of their liquidity problem and thereupon on 14 December 1999 appointed special administrators to manage the appellant's assets and affairs and to submit a workout proposal to Danaharta.

Under the terms of the operator agreement ie, cl. 2.01.1 the respondent was given an option to renew the lease for a further period of two years. Acting under the said clause the respondent through their letter of 3 August 2000 informed the appellant of their intention to exercise the renewal option.

However in their workout proposal the special administrators to the appellant were of the view that the best option available to the appellant that would maximise the recovery to its creditors is to sell the entire assets of the company to a third party but found that the operator agreement dated 23 August 1999 between the appellant and respondent (under which the premises and the assets of the appellant were leased to the respondent) was onerous to the appellant.

Pursuant to the powers of the special administrators to disclaim onerous contracts of affected persons under s. 40(1) of the Act, the special administrators decided to bring to an end the said operator agreement. It was under these circumstances that the appellant notified the respondent thro