Zakaria Yatim J:

This is an application by the respondent company for an order of the Court that the petition filed by the petitioner to wind-up the respondent company be struck off and/or dismissed with costs under O. 18 r. 19 of the Rules of the High Court 1980 and under the inherent jurisdiction of the Court.

The respondent is a company registered in Malaysia and carries on the business of a housing developer. Its registered address is Suite D23, 2nd floor, Plaza Pekeliling, Jalan Tun Razak, Kuala Lumpur.

The petitioner is a contractor who, under an agreement, carried out works for the respondent company at Lot. 1055, 9th mile, Jalan Cheras, Kuala Lumpur.

The petitioner issued a notice to the respondent company under s. 218 of the Companies Act, 1965 demanding the respondent company to pay the petitioner, within twenty-one days from the date of the service of the notice, a sum of RM2,938,651.97 (RM1,354,202.39 being balance of contract price together with the sum of RM1,584,449.58 being balance of agreed interest and other charges from 30 June 1986 to 31 August 1987) together with interest thereon at the rate of 8% per annum from 1 September 1987.

On 12 October 1987 the petitioner filed its petition. According to the petition, the respondent company is indebted to the petitioner in the sum of RM2,938,651.97 (RM1,354,202.39 being balance of contract price together with the sum of RM1,584,449.58 being balance of agreed interest and other charges from 30 June 1986 to 31 August 1987) together with interest thereon at the rate of 8% per annum from 1 September 1987. The petition also states that the respondent company made no payment within a period of twenty one days as required in the notice. It will be noted that the petition is based only on the ground that the respondent was unable to pay its debt under s. 218(2)(C) of the Companies Act 1965.

In its affidavit opposing the petition, the respondent company avers as follows:- Sometime in 1983, the respondent company invited tenders from intending contractors to undertake building works namely, the construction of shop houses at Jalan Cheras, Selangor (the project). The petitioner was one of the tenderers with the highest tender price to RM14,111,000. Although the petitioner tendered the highest price, the respondent company, at the meeting of its directors on 11 July 1983, awarded the contract of the project to the petitioner. One of the main reasons as to why the petitioner was selected was because of an oral inducement and incentive of the petitioner's offer to discount the contract price of RM14,111,000 and the quantum of discount was fixed at 12.45% which discount was accepted by the board of directors and became an oral agreement. On 31 May 1986, there was a mutual agreement to determine the contract. Pursuant to the mutual agreement, the parties agreed to appoint a quantity surveyor to carry out final joint survey of the works done at the site by the petitioner up to 30 April 1986. It was further agreed by both parties that the findings of the quantity surveyor would be final to the extent stated by him in the report and binding on both parties. The term of the said agreement is as follows:

We, the undersigned, do hereby appoint and instruct Messrs Fong Seng Yong, Chartered Quantity Surveyor to carry out the final survey on site on our behalf of Works executed up to 30 April 1986 in respect of the above mentioned Works. The report and decision of Messrs Fong Seng Yong will be final and binding on us.

The above agreement was duly signed by both the petitioner and the respondent company. The quantity surveyor subsequently submitted his report where he arrived at a figure of RM10,747,260.20. According to the respondent company, a sum of RM9,375,568.29 ought to be deducted from the above sum, as monies already paid to the petitioner. The respondent company also deducted a further sum of RM1,074,762.02 being retention money.

The respondent company contended that havin