JUDGMENT

Mohd Hishamudin J:

[1] This is an appeal by the appellant to the judge in chambers against the decision of the learned Senior Assistant Registrar, High Court, Shah Alam, who had allowed the plaintiffs/respondent's application for summary judgment against the defendant/appellant pursuant to O 14 of the Rules of the High 1980 ('the RHC').

I Have Allowed The Appeal With Costs

[2] As a brief background, in September 1990, the plaintiff/respondent and the defendant/appellant entered into an agreement known as the 'distributor agreement' ('the agreement'). The contract commenced on 1 January 1991. Under this agreement, it is provided, inter alia, that the plaintiff appointed the defendant as a general distributor for the plaintiff in respect of a product known as KHD DEUTZ Aircooled Engines together with the spare parts ('the goods') for West Malaysia. Pursuant to the terms and conditions of the agreement, the plaintiff from time to time supplied the goods to the defendant. It is stipulated by the agreement that payment by the defendant to the plaintiff for the goods delivered by the plaintiff to the defendant may be made by way of bills of exchange. Accordingly, the defendant had been making payments to the plaintiff by way of bills of exchange.

[3] On 20 June 1997, the plaintiff terminated the agreement with effect from 1 January 1998.

[4] The plaintiff alleges that the defendant, having been supplied with the goods, had defaulted on the bills of exchange by not honouring them when presented for payments.

[5] The defendant, in the statement of defence and in the affidavit opposing the application for summary judgment, on the other hand, denies owing the plaintiff any money. Instead, the defendant alleges that the plaintiff had agreed to take back from the defendant a certain quantity of engines and spare parts which had a total value of RM947,188 but had failed to do so. It is further alleged by the defendant that it is the plaintiff instead who owed them money as the defendant had carried out various warranty repairs and/or replacement of parts on behalf of the plaintiff.

[6] The plaintiff, however, denies the above claims by the defendant. The plaintiff further argues that, in any event, the defendant's allegations were irrelevant as the dispute is governed solely by the Bills of Exchange Act 1949 and not by the agreement.

[7] The defendant, however, argues that the dispute between the plaintiff and them is governed by the agreement.

[8] The writ and statement of claim were filed by the plaintiff on 2 June 1998.

[9] The unconditional memorandum of appearance was filed by the defendant on 26 June 1998.

[10] The statement of defence was filed by the defendant on 9 July 1998.

[11] The application for summary judgment was filed by the plaintiff on 30 July 1998.

[12] I am of the view that the defendant/appellant has succeeded in proving to the Court that there is a bona fide dispute as to the alleged debt and that the dispute between the plaintiff and the defendant is governed by the agreement.

I Shall Explain Why I Hold As Such

[13] I take the view that the contention by the defendant (that the dispute is governed by the agreement), as reflected in the statement of defence (see para 9) and the affidavit in opposition, cannot be summarily dismissed but must be accepted because of the following reasons. First, as has been pointed earlier, there is in existence between the parties an agreement known as the distributor agreement. Second, the statement of claim relies substantially on the agreement and this is borne out by paras 3, 4, 5 and 9 of the statement of claim. It is averred in these paragraphs as follows:

3 By a distributorship agreement entered between the plaintiff and the defendant dated 12 September 1990 ('distributor agreement'), the defendant was appointed as a general distributor for the full range of KHD DEUTZ Aircooled Engines together with the spare parts for peninsular Malaysia.

4 The following are, inter alia, the terms and