Electricity suppliers have a duty to exercise a high standard of care, applicable to claims arising from power disruptions leading to economic loss.

[1] These appeals arose from the decision of the Court of Appeal dated 2 July 2015 which reversed the decision of the trial Court and allowed all claims by the plaintiff. For ease of reference, we would refer to the parties as plaintiff (Batu Kemas Industri Sdn Bhd), 1st defendant (Kerajaan Malaysia) and 2nd defendant (Tenaga Nasional Berhad).

[2] The plaintiffs factory (factory) at Lot 2795, Jalan Tanjong Malim - Slim River, Perak used automated hydraulic presses and other electronically controlled machinery to produce calcium silicate bricks. The 2nd defendant supplied electricity to the factory whereat was a power substation.

[3] The Public Works Department (PWD) had appointed Markas Perdana Sdn Bhd (Markas) to execute works at the rest and recreation area at the 106km Ipoh to Kuala Lumpur highway. On 13 October 1997, the PWD handed the project site to Markas. On 31 October 1997, 9 January 1998, and 27 February 1998, the PWD requested the 2nd defendant to remove and relocate the electrical lines and cables from the project site. But the underground cable was not removed or relocated. Then disaster struck. On 5 August 1998, in the course of its installation at the R&R area, a guard rail column struck and ruptured the 1st defendants 11KV cable. Power to the factory was disrupted. The plaintiff claimed that the power disruption damaged its manufacturing equipment and processes and caused general, special and exemplary damages.

[4] Both the plaintiff and 2nd defendant summoned experts:

(PW8 for plaintiff, DW5 and DW7 for 2nd defendant) to testify on the probable cause for the damage. But insofar as the trial Court was concerned, the singular issue that would dispose of the entire case was whether there was a "protective scheme... to protect the state-of-the-art machines imported from Germany". In relation to that singular issue, the trial Court held: (a) the plaintiff omitted to install "a comprehensive and credible protection system... against any foreseeable electricity breakdown or faults which would include over-voltage and under-voltage"; (b) that omission "totally cancelled out and annulled any breach by the 2nd defendant"; (c) "the plaintiffs contributory negligence was absolute"; (d) "the 2nd defendant was not informed of piling works at the location of the underground cable";

(e) "there was no evidence that the project site extended to the location of the underground cable, in the middle of the road"; (f) the loss purportedly suffered by the plaintiff was a direct result of its failure to provide "a credible form of protective system for its production lines from the time they were set up. The plaintiff owed itself the innate duty to ensure that the state- of-the-art and highly sensitive machines and presses were fully protected and insured against electrical breakdown and failure which was highly foreseeable, whatever the cause for them. This negligence and breach had to be ruled in favour of the 1st and 2nd defendants". For those reasons, the trial Court dismissed the claim against the defendants and Markas as third party.

[5] The first argument raised by the plaintiff at the Court of Appeal was that the trial Court failed to evaluate the competing views of the experts. The evidence of PW4 and PW8 was that the equipment was damaged by a surge in the voltage attributable to a severe voltage transient caused by a momentary shorting that caused the fuses in the sub-station to explode. But it was the evidence of DW5 and DW7 that the damage was caused by undervoltage. Expert opinion was divided. All the sam