Abdul Malik Ishak J:

Introduction

The plaintiff, ABDA AIRFREIGHT SDN BHD, was and is at all material times, a freight forwarding and cargo handling company (hereinafter referred to as "ABDA"), while the defendant, was and is our National Flag Carrier that goes by the name of Sistem Penerbangan Malaysia Berhad (hereinafter referred to as "MAS").

By way of a sales agency agreement dated 28 September 1995, ABDA entered into an agreement with MAS (see p. 1 to p. 3 of L15 marked as exh. "D12") which appeared to be mutually beneficial to both parties. There was also an agreement between ABDA and MAS in regard to the "Uplift of Unaccompanied Baggage" dated 22 November 1995 (hereinafter referred to as an "agreement") which can clearly be seen at p. 14 to p. 15 of L15 marked as exh. "D12" and this agreement was worded as follows:

AGREEMENT BETWEEN MALAYSIA AIRLINES BHD

AND ABDA AIRFREIGHT SDN BHD ON

UPLIFT OF UNACCOMPANIED BAGGAGE

Malaysia Airlines (MH) and ABDA Airfreight Sdn Bhd (ABDA) hereby agree to the carriage of unaccompanied baggage for ABDA on MH services as stated below.

1.Sector.

KUL-MAA, KUL-KHI and KUL-DEL.

2.Rate.

2.1Between 1st December 1995 to 31 May 1996.

LD3 rate: RM 1100 per LD 3 Nett (Pivot weight 550 kg).

Over pivot rate: RM2.00/KG Nett.

2.2.Between 1st June 1996 to 30 November 1996.

LD3 rate: RM1,650 per LD3 Nett (pivot weight 550 kg).

Over pivot rate: RM3.00/KG Nett.

3.Each container has a guaranteed pivot weight of 550 kgs.

4.Effective 1st December 1995, with exclusive rights granted to ABDA for up to 24 months with a view to consider a further extension of another 12 months after completion of the 24 months.

5.Rates to be reviewed after a 12 months period.

6.Operational conditions are as per minutes of meeting dated 16 November 1995.

7.MH will not be responsible for any claims from this arrangement.

for MALAYSIA AIRLINESfor ABDA AIRFREIGHT SDN BHD

Signature Sgd. (Illegible)Signature Sgd. (Illegible)

JJ ONGZAINAL ABIDIN

General Manager (Cargo Sales)Managing Director

Name: ONG JYH JONGName: ZAINAL ABIDIN

Title: GENERAL MANAGERTitle: MANAGING DIRECTOR

(CARGO SALES)Date: 22/11/95

Date: 22 Nov '95

and the focal point of attention would be this very agreement. This agreement was short-lived. Three months thereafter, the agreement was brought to an end by MAS, notwithstanding the fact that both parties mutually enjoyed the benefits that accrued under the agreement. It was sometime in March 1996 that MAS terminated the agreement. To be exact, the termination took place on 16 March 1996.

The learned counsel, in the person of Mr Saranjit Singh who acted for MAS, aptly described the demise of the agreement as timely "before extensive and irreparable damage could have been inflicted onto our National Airline and to our national pride in general."

ABDA filed a writ of summons and in its statement of claim as seen at p. 7 of the "Ikatan Pliding" marked as exh. "D11" particularly at para. 7 it sought for (i) special damages to the tune of RM365,224.88 and (ii) general damages consequent upon the damage to its image and reputation. ABDA too sought for:

(iii)interest at the rate of 8% per year from the date of filing of the writ to the date of full settlement;

(iv)costs; and

(v)any other relief which this Honourable court deems fit and fair.

Product Offered By ABDA Under The Agreement

Under the agreement, ABDA proposed and invited MAS to become partners of a special product known as "ABDA Baggage Service." This special product offered by ABDA was distinct and independent from the services envisaged under the sales agency agreement. The scope of ABDA as an agent under the sales agency agreement was quite limited and it was governed by cl. 1 which laid down the following terms:

1.(a)The authority of the Agent to represent the Carrier shall be specifically limited to the authority expressly granted by this Agreement and any other documents between the parties as forming part of this Agreement. Any reference to "this Agree