Time is essential in contingent contracts; failure to meet stipulated deadlines renders contracts void under the Contracts Act 1950.

Azimah Omar JCA:

Introduction

[1] The appeal before us is a case of breach of contract and it is essentially concerning a miscomprehension of the tenets or workings of a 'contingent' or 'conditional' contract under ss 32 and 36 of the Contracts Act 1950 where the validity or continuity of a contract was contingent or conditional upon the respondent upholding its end of the bargain within a contractually agreed time.

[2] Before us, a contract is entered between the appellant and the respondent which contractually requires the respondent to perform a certain obligation within a set contractual time period. The respondent was unable to perform the said obligation within the prescribed contract period.

[3] At the outset, it is our view that the learned High Court Judge ("learned judge") had misread ss 32 and 36 of the Contracts Act 1950 and had incorrectly held that when the parties agreed to the said time contingency or time condition, it was incumbent upon the parties to elect to continue with the contract so long as the contingency or condition was 'possible to be performed' (albeit out of contractual time). The reading of the provisions by the learned judge in such manner, in our view was entirely contradictory to the literal stipulations of the provisions. We identified that this incorrect reading was also influenced by the respondent's misconceived reliance of s 33 of the which was entirely inapplicable in the appeal before us.

[4] Before we embark in demystifying this misinterpretation of both law and fact, it is only apposite that we appreciate the factual matrix of the case leading up to this Appeal.

Facts Of The Case

[5] Under the 11th Malaysian Plan, the Government of Malaysia was committed to reduce its carbon footprint (and emission) by increasing the use of renewable energy. One such renewable energy being solar energy. The Energy Commission/Suruhanjaya Tenaga ("the appellant") was the statutory body established under the Energy Commission Act 2001 by the Government of Malaysia to undertake initiatives to increase the capacity of large scale solar photovoltaic installations to achieve the government's zero emission target ("the LSS project").

[6] Beckoned by the LSS Project, the appellant had issued a request for proposal ("RFP") to the industry players in Malaysia to participate in a tender exercise to construct, operate and maintain a large scale solar photovoltaic plant ("LSSPVP").

[7] We must be appropriately minded that there were multiple RFPs issued for separate and distinct phases within the LSS project. In total, there were four phases within the LSS project being LSS-1, LSS-2, LSS-3, and LSS-4.

[8] Strong Elegance Sdn Bhd ("the respondent/SESB") participated (as the designated corporate vehicle representing the successful bidder) in the RFP for LSS-1. The subject LSS project in the appeal before is LSS-1. Thus, we are aware that the respondent had wrongly referred to and related matters in LSS-3 despite the subject LSS in the appeal before us was only LSS-1.

[9] SESB was incorporated to undertake the LSS-1 project on behalf of the successful bidders for LSS-1 (who were also shareholders of SESB) namely Synergy Generated Sdn Bhd, Scomi Group Berhad, and Lembaga Tabung Angkatan Tentera (collectively referred to as "the consortium").

[10] The RFP for LSS-1 under RFP: ST(IP/JPIKSE/PI)19/1/4 ("RFP 1") was issued by the appellant on 26 May 2016. RFP 1 calls for bidders for the construction, operation, and maintenance of a LSSPVP of 30MW capacity. Apart from the terms stipulated under the RFP 1, the terms and obligations of parties are to be collectively read together with 1) the solar power purchase agreement with Tenaga Nasional Berhad ("SPPA") and 2) the land lease agreement of at least 23 years of the project land ("LLA") to be identified by the successful bidder (the respondent):

PART 2 - Project Document

1.0 Project Document

The Project Document which will be entered into by each Successful Bidder include: