Back
2010 MarsdenLR 1534
HIGH COURT, SHAH ALAM
A & AT ADVANCED POWER SYSTEMS SDN BHD – Appellant
Versus
PERNEC CORPORATION BHD – Respondent
[Civil Suit No: 22-510-2003]
A plaintiff can claim consultancy fees based on the terms of a contract when it is established that the purchase orders in question fall within the contractual scope.
Headnote:(A) Consultancy Agreement - Claim for fees - Disputed Purchase Order - Plaintiff's claim for consultancy fees of RM496,656/- for PO No. 6 was based on the assertion that this order fell under Phase 6 of the consultancy agreement, as established by the terms of the agreement and the nature of Celcom's requirements. The Defendant denied this claim stating that PO No. 6 was outside the scope of the agreement. (Paras 1-5, 6-8, 11, 16).
(B) Contractual obligation - The court confirmed that the Plaintiff was instrumental in securing contracts and therefore entitled to remuneration per the agreement. It was established that the framework of the contractual agreement allowed for Celcom to issue additional Purchase Orders as required. (Paras 1, 9, 10, 12).
Facts of the case:
The Plaintiff and Defendant entered into a consultancy agreement for procurement of contracts from Celcom. The Plaintiff claimed fees for a purchase order made by Celcom that the Defendant denied was within the scope of the agreement (Paras 1-4).
Findings of Court:
The Plaintiff proved the claim regarding PO No. 6, establishing the Defendant's liability for consultancy fees of RM496,656/- under the contract terms and overall market practices in procurement processes (Paras 11-16).
Issues: Whether Purchase Order No. 6 falls within the defined scope of Phase 6 and hence the Defendant's obligation to pay the Plaintiff.
Ratio Decidendi: The court reasoned that the Plaintiff's involvement in securing the contracts, along with the contract's allowance for additional PO issuance, affirmed the Plaintiff's rightful claim to fees for PO No. 6 (Paras 11-12).
Result: Plaintiff's claim allowed in full with costs.
| Table of Content |
|---|
| 1. consultancy agreement terms and obligations (Para 1 , 2 , 3 , 4) |
JUDGMENT
[1] Plaintiff alleged that he had been helping the Defendant procure contracts from Celcom all the way from Phase 1 to Phase 6. On 1-2-2001, Plaintiff and Defendant entered into a Consultancy Agreement (CA) (Exhibit D23) for the Expansion of the Mobile Prepaid Card System of Celcom (Phase 6). The CA provide amongst others that in consideration for the successful procurement of the contract by the Plaintiff, the Defendant agrees to pay the Defendant a consultancy fees for a sum equivalent of 12% of the purchase orders (PO) made by Celcom to the Defendant for Phase 6. The rates for the consultancy fees shall be reduced to 10% or lower for future projects.
[2] The Plaintiff now claim that for purchase order (PO) number 6 dated 15-7-2002 the Defendant failed to pay his consultancy fees for the amount of RM496,656/- together with interest and cost. The Defendant denied that PO No. 6 is within Phase 6 and that Celcom had order PO No. 6 directly from the Defendant without going through Plaintiff.
[3] At the trial, Plaintiff had 1 witness and the Defendant had 2 witnesses.
[4] The issue before the Court is whether PO No. 6 is within Phase 6 and whether the Defendant is liable to pay the Plaintiff RM496,656/-.
[5] The Consultancy Agreement (CA) dated 1-2-2001 (Exh. D23) provides the following:-
"For the Expansion of the Mobile Prepaid Card System of Celcom (Phase 6) for 2, 5 Million customer Base and also the related items listed below:
(i) Integrated Voice Response (IVR) system
(ii) Comprehensive Maintenance Contract
(Hi) MPC Database upgrade from 1M to 1.5M subscribers
(iv) NMS (OSI Solution).
THIS AGREEMENT is made on the 1st February 2001 between:-
WHEREAS:-
1. the Consultant is a company having n its employed personnel with considerable skill knowledge and experience in the field of telecommunications and are in the position to procure contracts for PERNEC to construct and implement Intelligent Network Platform for and on behalf of CELCOM (Malaysia) Sdn. Bhd (hereinafter known as "the Customer")
2. PERNEC is desirous of engaging the services of the Consultant and the Consultants hereby agreed to provide their assistance in respect of procuring the contract for PENEC from CELCOM to construct and implement Intelligent Network Platform for and on their behalf.
3. The parties have agreed to regulate their relationship in the manner herein set out in this Agreement.
NOW THEREFORE, in consideration of them mutual convents contained herein the parties hereby agree as follows:
(i) The consideration for the successful procurement of the contract by the Consultant in favor of PERNEC, PERNEC agrees to pay the Consultant the sum equivalent of total Twelve percent (12%) of the purchase order amount from CELCOM to PERNEC. This rates for the consultant fee shall be reduced to Ten percent (10%) or lower for future projects.
...
6. During the continuance of this Agreement, the Consultant shall not provide the same services or assistance to any other party which has submitted a similar bid for the above said RFP to the Customer."
[6] PW1 in his Witness Statement stated that Plaintiff helped secure contracts from Celcom to the Defendant from Phase 1 to Phase 6 of the IN Project. Phase 4 was to build up Celcom's customer base to 500,000. The IN equipment purchased by Celcom for Phase 5 was to cater for Celcom's increased to 1.5 million customer base. Due to the rapid growth of Celcom's customer base, Celcom had to start purchasing equipment for Phase 6, which would allow them to cater for a customer base of up to 2.5 million. PW1 then described the process of securing contracts from Celcom. He said, first Celcom puts out a tender. Bidders then furnish a quotation to Celcom. The plaintiff was actively involved during the evaluation of the bids by Celcom. Upon completion of the tender evaluation, Celcom issues a Letter of Award (LOA) to the successful bidder which in this case is t
