Limitation periods in contracts commence upon the exercise of options, not upon triggering events.

[1] In this judgment unless otherwise stated, the parties are referred to as they were in the High Court.

[2] On 1 December 2015, this Court granted the defendant leave to appeal on the following three questions:-

i. Whether, in the case of an OPTION which is exercisable upon the happening of a specified event (Trigger Event), time for limitation would only start to run upon the option being exercised and not from the occurrence of the Trigger Event?

ii. Where no time period is specified for the exercise of an OPTION, whether Non Waiver/Waiver Clauses would serve to preclude the courts from having the jurisdiction and power to imply that the OPTION is to be exercised within a reasonable time after the happening of the Trigger Event? and

iii. Whether the presence of Non Waiver/Waiver Clauses in an OPTION contract would preclude reliance on equitable defences such as laches and acquiescence altogether notwithstanding that s 32 of the Limitation Act 1953 expressly preserves its applicability?

Background Facts

[3] The plaintiff is a private limited company incorporated in Malaysia whose registered address is at Level 24, Wisma Genting, 28 Jalan Sultan Ismail, 50250 Kuala Lumpur.

[4] The defendant is a public limited company incorporated in Malaysia having its registered address at Level 16, Plaza Perangsang, Persiaran Perbandaran Shah Alam, 40000 Selangor Darul Ehsan.

[5] By a letter of award dated 9 March 2001 Sepang Power Sdn Bhd (SPSB), was awarded by the Economic Planning Unit an approval to develop and operate a 710MW gas-fired combined cycle power plant in the District of Kuala Langat, Selangor Darul Ehsan (the Power Plant Project).

[6] By an agreement dated 21 May 2002 (TNB-MLSB SSA) Tenaga Nasional Berhad (TNB) and the plaintiff, subject to certain fulfilment of relevant conditions precedent, agreed on the sale of TNB's 400,000 shares, equivalent to 40% of the Issued Shares in SPSB, to the plaintiff.

[7] Subsequently, the plaintiff and the defendant entered into a Share Sale Agreement dated 9 December 2002 (the SSA) in which the defendant agreed to sell its entire stake in SPSB which was equivalent to 300,000 shares or 30% of the Issued Shares in SPSB (the Sale Shares) to the plaintiff.

[8] The agreed purchase price of the Sale Shares was RM8,500,000.00 (the Purchase Price). The Purchase price was paid to the defendant on 9 December 2002.

[9] Clause 8 of the SSA specified the manner in which the SSA was to be completed by the parties. The SSA was subject to fulfilment of conditions precedent (CP) in cl 5 and special conditions in cl 9 of the SSA.

[10] For ease of reference, relevant parts of cls 9 and 19 are reproduced in verbatim:-

"9.8 Notwithstanding the Completion of the sale and purchase of the Sale Shares pursuant to this Agreement, in the event that the TNB-MLSB SPA is not completed, MLSB may elect to terminate this Agreement and the Parties agree to proceed in accordance with cl 9.9.

9.9 In the event of the situations in cl 9.3, 9.5(b) or cl 9.8 above arising then, mindful of cl 13, the Parties agree to proceed as follows:

(a) ...

(b) if Completion has taken place and remittance of the Purchase Price made, either party may opt to terminate this Agreement and MLSB or its nominee company, as the case may be, shall return the Sale Shares to KDEB and KDEB shall refund the Purchase Price to MLSB free of interest in which case the Party opting to termin