(delivering the judgment of the court): We allowed the appeal and set aside the interlocutory injunction granted by the Penang High Court dated January 2, 1987 with costs here and below. We indicated that we would give reasons in writing which we now do.

For the purpose of this appeal, we need only state the salient facts. The respondents, National Union of Teachers in Independent Schools, West Malaysia, purported to act for certain teachers who were formerly employed by the appellant, Penang Han Chiang Associated Chinese School Association, on a fixed term basis, which usually commenced on January 1, and expiring on December 31 of each year. The service agreements appear to be in standard printed form and the relevant clauses read:

"5. In the event of this contract being renewed, the teacher must notify the managing committee of his/her acceptance within one week from the date the renewal of the contract is offered. Otherwise the offer is deemed to have been rejected.

6. If anyone does not receive any offer of the contract being renewed by the date of expiry of the contract, it will mean that his/her service has been terminated. The school takes no responsibility to inform him/her of his/her cessation of his/her employment".

Disputes arose between the appellant, as employer, of the one part and the teachers in the former employment of the appellant, of the other part. It is sufficient to say that a complaint was made to the Ministry of Labour and the Minister in turn had referred the trade dispute to the Industrial Court for determination under section 8 of the Industrial Relations Act 1967 (as amended). It seems that reference to the Industrial Court was made before the respondents filed the civil suit at the Penang High Court.

When the learned judge granted the interlocutory injunction, he appeared to rely on the principle expounded by the late Lord Diplock in the American Cyanamid [1975] AC 396 case that the applicant needs, amongst other things, to show that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. The learned judge did not appear to consider the balance of convenience. If he had done so, he seemed to have disregarded the well-established rule that a contract for service or service contract would not be specifically enforced by the High Court (see section 20(1)(b) of the Specific Relief Act 1950) and that an injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced (see section 54(f) of the same Act and Hill v CA Parson & Co Ltd [1977] 3 All ER 1345).

In Poh Swee Siang v Trustees of Tong Khoo Kongsi & Ors [1986] 1 MLJ 53 the Federal Court held that when hearing an appeal from the judge's grant or refusal to grant an interlocutory injunction the function of an appellate court is initially one of review only. It must defer to the judge's exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. We would respectfully adopt this principle in deciding this appeal.

It was clear from a review of the facts and the ruling of the learned judge that he did not appear to give any consideration to the balance of convenience. And if he did, he failed to have due regard to the provisions of section 20(1)(b) and section 54(f) of the Specific Relief Act 1950. On this ground alone, it was plain that the granting of the interlocutory injunction was not an exercise of judicial discretion. This means that the appellate court is at liberty to rehear the whole application on its merits.

Now, this is an action where the respondents, purporting to represent former teachers employed by the appellant, alleges breaches of service contracts, which trade dispute had been referred by the Minister of Labour to the Industrial Court for a hearing. In our judgment, when a trade dispute had been invested in the