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2011 MarsdenLR 1893
HIGH COURT MALAYA, KUALA LUMPUR
JAKS-KDEB CONSORTIUM SDN BHD V.PERBADANAN URUS AIR SELANGOR BERHAD & ORS
[Suit No: D-22-1452-2006]
The court affirmed that contractual interpretation relies on the ordinary meaning of terms, ruling that the supply agreement did not provide for exclusivity, thereby dismissing the Plaintiff's claims.
Headnote:(A) Companies Act 1965 - Agreement for supply of water pipes - Concession Agreement - The Plaintiff alleged that the Defendants failed to fulfill contractual obligations, causing damages - The Defendants contended the agreement was not exclusive and allowed for purchases from third parties. (Paras 11-14)
(B) Contractual Interpretation - The court ruled that contracts should be construed based on the ordinary meaning of the terms agreed upon by the parties. Exclusivity was not a negotiated term; thus the Plaintiff's claims were unsupported. (Paras 20-22)
Facts of the case:
The Plaintiff, a Malaysian company, entered an agreement to supply water pipes to the 3rd Defendant; post-2005, the 1st Defendant ceased orders, claiming the contract was non-exclusive. The Plaintiff alleged conspiracy and breach of contract against the Defendants. (Paras 2-8)
Findings of Court:
The contract was interpreted as non-exclusive, allowing the 1st Defendant to source from other suppliers without breaching the agreement. The Plaintiff’s claims of conspiracy were unsupported by credible evidence. (Paras 28-34)
Issues: The court addressed whether the 1st Defendant breached the supply contract, and whether the 2nd Defendant conspired against the Plaintiff with intent to cause harm. (Paras 12-13)
Ratio Decidendi: The agreement was determined to be non-exclusive, consistent with its terms and background negotiations, and the intent of the parties was upheld as reflected in the contract provisions. (Paras 24-27)
Result: Claim dismissed with costs awarded to Defendants totaling RM50,000.
Brief Background
On 25.10.2001 the Plaintiff and the 3rd Defendant executed an agreement to supply and sell to the 3rd Defendant water pipes and fittings for implementation of its waterworks projects. On 15.3.2002 the 1st Defendant and the 3rd Defendant entered into a corporatization agreement.
By Vesting Order (Sel.P.U.35) dated 26.9.2003 the Menteri Besar of Selangor appoints 15.3.2002 as the vesting date wherein all properties, rights and liabilities of the 3rd Defendant in respect of the supply and distribution of treated water supply services were transferred to and vested in the 1st Defendant.
The 1st Defendant shareholding were acquired by the 2nd Defendant by an agreement dated 8.12.2004 between the 1st, 2nd, 3rd Defendants and Kumpulan Darul Ehsan Berhad.
On 15.12.2004 the 2nd Defendant, the 3rd Defendant and the Federal Government executed a Concession Agreement. The 2nd Defendant was granted a concession of 30 years to supply and distribute treated water in the Selangor and the Federal Territories of Kula Lumpur and Putrajaya.
On 10.5.2006 the 2nd Vesting Order was issued vesting all rights and liabilities of the 3rd Defendant to the 1st Defendant.
Plaintiffs Case
It is the Plaintiff's contention that:
a) The 1st Defendant in breach of its obligations under the Supply Agreement, which had been statutorily transferred from the State Government and vested in the 1st Defendant and/or the 1st Defendant at the direction of the 2nd Defendant, from 1.1.2005, or thereabouts for no good nor apparent reason, unilaterally ceased to:-
(i) purchase from the Plaintiff or
(ii) cause to be purchased from the Plaintiff.
the pipes and fittings for all projects in respect of water distribution and/or supply services carried out in the State of Selangor including the Federal Territory of Kuala Lumpur and Putrajaya.
b) The 2nd Defendant with the full knowledge of the 1st Defendant's obligations under the said Supply Agreement used its position of control over the 1st Defendant to prevent the 1st Defendant from fulfilling its obligations under the Supply Agreement by causing the 1st Defendant to cease:
(i) purchasing or
(ii) cause to be purchased
from the Plaintiff the pipes and fittings for all projects in respect of water distributor and/or supply services carried out in the State of Selangor including the Federal Territory of Kuala Lumpur and Putrajaya. The 2nd Defendant instead directed all tenderers for these projects to procure such pipes and fittings from 3rd parties and/or its nominees Laksana Wibawa Sdn. Bhd. and/or Musa and Rahman Plastic Industries Sdn. Bhd.
c) The 2nd Defendant negligently and/or fully conspired and combined with the 1st Defendant, with the sole or predominant intention of injuring the Plaintiff and/or causing loss to the Plaintiff by ceasing to (i) purchase or (ii) cause to be purchased.
from the Plaintiff the pipes and fittings for all projects in respect of water supply services carried out in the State of Selangor including the Federal Territory of Kuala Lumpur and Putrajaya and instead directing all tenderers for these projects to, inter alia procure such pipes and fittings from 3rd parties and/or its nominees Laksana Wibawa Sdn. Bhd. and/or Musa and Rahman Plastic Industries Sdn. Bhd.
By reason of the above described breaches of contract and/or wrongful and/or negligent acts of the 1st, 2nd and/or 3rd Defendants, the Plaintiff contended that they suffered loss and damages.
According to the Statement of Claim the Plaintiff's claims are as follows:
As against the 1st and 2nd Defendant
(i) A declaration that the 2nd Defendant conspired and/or combined with the 1st Defendant with the sole or predominant intention of injuring the Plaintiff and/or causing loss to the Plaintiff;
(ii) An injunction to immediately restrain the 1st and/or 2nd Defendants whet
