Low Hop Bing Jca:

Appeal

[1] This is the appellants' ("the plaintiffs") appeal against the variations ordered by the High Court on 4 April 2007. The variations were made to Mareva injunctions which restrained some of the respondents ("the Mareva defendants") from dissipating their assets pending trial of the civil suit there.

[2] The relevant factual background is set out below.

Bonds

[3] On 1 April 2004, the first defendant, Pesaka Astana Sdn. Bhd ("Pesaka) issued RM140 million worth of ABBA bonds ("the bonds") which were purchased by all the 10 plaintiffs. The amount and tenure of the bonds ranged from 1 1/2 years to 2 1/2 years, the particulars of which are:

Amount Maturity Date

(1) RM30 million 30 September 2005

(2) RM50 million 30 March 2006

(3) RM60 million 30 September 2006

[4] The plaintiffs alleged that:

(1) Pesaka failed to redeem any of the bonds on the respective maturity dates;

(2) Pesaka was obliged to pay the plaintiffs the total redemption sum of RM157,815,000 payable under the Syariah compliant bonds;

(3) By a proposed debt restructuring scheme dated 22 December 2005, on behalf of Pesaka, BDO Capital agreed to repay monies due and payable to the plaintiffs, by way of a five year instalment period;

(4) Four designated accounts were to be opened by Pesaka prior to its issuance of the bonds;

(5) Pursuant to the terms of bond contracts, Pesaka was not to open and maintain any other bank account apart from the four designated accounts which are also to be Syariah compliant;

(6) Three out of the four designated accounts had to be operated at all times by Mayban Trustees as the sole signatory ("the Trustee Accounts") while Pesaka was to operate the fourth account; and

(7) The bonds were designed to provide comfort and protection to the bondholders, by ensuring that the proceeds of Government contracts (which Pesaka was going to receive and which were ear-marked as the principal sources of funds for the redemption of the bonds by Pesaka) would be paid into, and maintained, at one of the Trustee Accounts ie the "Revenue Account", operated solely by Mayban Trustees as "ring-fencing".

Bond Contracts

[5] The plaintiffs claimed that on 9 March 2004, three contracts, (1) to (3) below, were executed, while the fourth contract, (4) below, was executed on 1 April 2004. These four bond contracts are:

(1) Trust Deed, entered into between Pesaka and Mayban Trustees, the second defendant;

(2) Subscription and Facility Agreement, entered into between Pesaka and KAF Discounts, the third defendant;

(3) Deed of Assignment and Charge, entered into between Pesaka and Mayban Trustees, the second defendant; and

(4) Deed of Assignment, executed by Pesaka in favour of the second defendant, Mayban Trustees.

[6] The plaintiffs' case is that the bonds are governed by the four bond contracts executed prior to the issuance and sale of the bonds. None of the bondholders are parties thereto.

[7] The principal terms of the Trust Deed are:

(1) Mayban Trustees shall be appointed Trustee for each and every bondholder: cl. 2.1;

(2) The bonds are Pesaka's direct, secured and unconditional obligations: cl. 3.1(a);

(3) The Trust Deed binds all bondholders, present and future, and the bonds are issued subject to the Trust Deed: cl. 3.1(b);

(4) By way of a positive undertaking, Pesaka shall open and maintain four designated accounts, and make the necessary deposits into and withdraw payments therefrom only in accordance with the provisions of Trust Deed: cl. 7.1(w); and deposit into the Finance Service Reserve Account, one of the four designated accounts, the minimum required balance to be applied towards the payment of any monies due and owing under the bonds: cl. 8.3;

(5) By way of negative undertakings, Pesaka shall not:

(a) make or grant any loan or advance to any of its directors or any other person, firm or organization;

(b) open and maintain other accounts except the four designated accounts; and

(c) enter into any related transaction with a