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2011 MarsdenLR 3175
HIGH COURT MALAYA, KUALA LUMPUR
AL-RAJHI BANKING & INVESTMENT CORPORATION (MALAYSIAN) BERHAD – Appellant
Versus
MLC SHIPBUILDING SDN BHD & O.... – Respondent
[Civil Suit No: D-22NCC-2238-2010]
An ex parte injunction lapses after 21 days if not renewed or set aside, highlighting the need for timely hearings to uphold procedural integrity.
Headnote:(A) High Court 1980 - Order 29, Rule 1 - Ex parte injunction - Nature and duration - Ex parte injunction automatically lapses after 21 days unless renewed or set aside - Court must fix a hearing date on granting injunction. (Paras 11-14)
(B) Interim injunction - Requires timely hearing and adherence to procedural rules - Failure to do so may lead to lapse of injunction. (Paras 12-14)
Facts of the case:
The plaintiff provided a financing facility to the 1st defendant, which subsequently defaulted. Ex parte injunction granted to secure payment lapsed after 21 days due to procedural neglect. (Paras 8-10)
Findings of Court:
The ex parte injunction lapsed as no inter partes hearing date was set within the mandatory timeframe. (Para 16)
Issues: Whether the ex parte injunction granted remained valid beyond 21 days and the obligation to fix an inter partes hearing date. (Paras 12-13)
Ratio Decidendi: The court held that an ex parte injunction is temporary and only valid for 21 days unless stipulated otherwise; failure to fix a hearing date renders it void. (Paras 11-14)
Result: Application to discharge the injunction allowed with costs.
| Table of Content |
|---|
| 1. request for injunction and legal process initiation. (Para 1 , 2) |
| 2. background on financing agreements and defaults. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 3. rules governing interim injunctions and their lifespan. (Para 11 , 12 , 13 , 14) |
| 4. court's ruling on the lapse of the injunction. (Para 15) |
[1] By a Summons in Chambers dated 8 April 2011 (encl 22) the 3rd and 4th defendants apply for the following orders:
(1) To discharge and set aside the ex parte injunction order dated 9 March 2011 obtained by the plaintiff;
(2) That the plaintiff pay to the defendants the costs.
[2] Enclosure 22 is supported by the affidavit of the 4th defendant affirmed on 7 April 2011. The plaintiff's Affidavits in Reply are affirmed by Abdulhaq Abdul Hadi on 11 May 2011 and Nor Hakimah Abdul Latiff on 12 May 2011. The defendants' Affidavit in Reply affirmed by the 4th defendant on 30 May 2011 followed by the plaintiff's affidavit affirmed by Lim Yok Chaw on 7 July 2011.
Background Of Facts
[3] By way of a Letter of Offer dated 6 February 2009 issued by the plaintiff to the 1st defendant ("the Letter of Offer") and a Master Trade Agreement dated 26 February 2009 ("the Master Trade Agreement") executed between the plaintiff and the 1st defendant, the plaintiff agreed to provide an Islamic financing facility known as Structured Commodity Financing-I Facility up to RM50 million ("Financing Facility") to the 1st defendant for the purpose of the 1st defendant working capital requirement for its shipbuilding business, subject to and upon the terms and conditions as stated in the Letter of Offer and the Master Trade Agreement.
[4] By a Letter of Offer dated 26 February 2009 and the Master Trade Agreement dated 26 February 2009, the plaintiff had required the 1st defendant to provide securities to secure the repayment of the Financing Facility to the plaintiff. The 1st defendant then executed an Assignment of Contract Proceeds dated 26 February 2009 ("the Assignment of Contract Proceeds"),inter alia, that the 1st defendant, as the assignor assigned to the plaintiff its absolute right on the contract proceeds entered into between the 1st defendant and Alam Maritim (L) Inc (AML) as the security for the payment of the outstanding Sale Price and all amounts due to the plaintiff in relation to the Sale Transaction agreed between plaintiff and 1st defendant under the Master Trade Agreement. The 1st defendant issued two notices of assignment of contract proceeds to Alam Maritim Resources Berhad (hereinafter referred to as "AMRB") both on 26 February 2009.
[5] The 2nd to 4th defendants had executed a Joint and Several Guarantee dated 26 February 2009 ("the Guarantee") and had agreed to be jointly and severally liable to pay to the plaintiff on demand, all money and discharge the 1st defendant's debt due to the plaintiff. In addition to the personal guarantees of the 2nd to 4th defendants, Nantong MLC Tongbao Shipbuilding Pte Ltd (hereinafter referred to as "NTC") also provided a corporate guarantee. The 2nd to 4th defendant were the Directors of the 1st defendant at the time the Letter of Offer was issued to the 1st defendant. NTC is a company whereby at the material time its shareholding is 44% controlled by the 2nd and 3rd defendants in the ratio of 24% and 20% respectively. Pursuant to the Master Trade Agreement and the Sale Transaction, the 1st defendant was meant to repay the entire Sale Price by 26 February 2010. However, the 1st defendant failed to do so and sought an extension of time to make this payment. The plaintiff agreed to this request and was willing to extend the time to make payment to 9 April 2010 or upon receipt of proceeds of sale of the ships from AML and Sime Darby Marine Puteri Offshore (L) Inc (hereinafter referred to as "SDMPO"), whichever is earlier. The 1st defendant however had to provide additional security, as stipulated in the variation letter dated 23 February 2010 (exh 21).
[6] On 19 March 2010, t
