The court upheld that obligations regarding contract specifications must be met, and reliance on unverified test results was insufficient to refute accepted evidence.

[4] For ease of reference, in this judgment, parties will be referred to as they were in the High Court.

Facts Of The Case

[5] The facts of the case, as culled from the records may be shortly stated as follows:

(a) By a letter dated 19 November 2016, the defendant invited the plaintiff to quote its best prices for fertilizers to be supplied to its plantations for the year 2011.

(b) By a letter dated 26 November 2010, the plaintiff submitted its tender quotation per the specifications and subsequently a revised quotation on 9 December 2010, which were both subject to FIAM's Uniform Terms and Conditions for the supply of fertilizers.

(c) By a letter of Award dated 15 December 2010, the defendant awarded the plaintiff the contract for the supply of fertilizer type "FMP" 18% P2O5 min, 10% MgO. The plaintiff alleged that the letter stated that the conditions of tender under the invitation letter shall form an integral part of the supply agreement.

(d) Between the months of April and September 2011, the plaintiff supplied and delivered FMP and this was duly received by the defendant.

(e) On 12 September 2011, the defendant wrote a letter to the plaintiff requesting it to stop further delivery of FMP to its estate with immediate effect. The defendant alleged that the FMP sent for laboratory analysis revealed that the quality of FMP is not normal because the "citric acid solubility of P2O5 should not be less than 80% of the total P2O5 contents".

(f) On 12 October 2011, the plaintiff sent the defendant the result of the tests done on the samples of FMP to the labs. The defendant was informed that the results were within the acceptable range and within the specification of the tender award.

(g) By a letter dated 23 December 2011, the defendant claimed that the quality of the FMP supplied was substandard and appended its calculation on its claim for the FMP's quality shortfall based on 90% CAS of P2O5 and 85% CAS of P2O5.

(h) By a letter in reply dated 29 December 2011, the plaintiff maintained that CAS of P2O5 was not part of the specifications. However, as a conciliatory gesture, it offered compensation in the sum of RM170,352.22 on a without prejudice basis which it later increased to RM200,000.00.

(i) On 6 August 2013, the plaintiff filed the instant action. As we have alluded to earlier, the learned trial judge dismissed the plaintiff's claim and allowed the defendant's counterclaim. Hence, this appeal before us.

The Issue

[6] The main issue before the High Court was whether the fertilizer supplied by the plaintiff to the defendant was genuine FMP with the specifications of 18% P2O5 and 10% MgO or not.

Findings Of The Learned Trial Judge

[7] After carefully considering all the evidence on record and the legal arguments by the parties, the learned trial judge found in favour of defendant. The learned trial judge's reasoning can be summarised as follows:

(a) that the FIAM's Uniform Terms and Conditions did not form part of the contract although His Lordship had relied on the said terms and conditions to hold that the China Standard was the only applicable standard;

(b) that the reference to P2O5 nutrient specification in the FMP is a reference to "17% citric acid soluble P2O5" and not total P2O5 because FMP is graded by citric acid soluble P2O5 based on the oral evidence of PW8 and DW2;

(c) that the fertilizer supplied by the plaintiff to the defendant contained only 9.5% effective P2O5 based on the test results of Applied Agricultural Resources and it was therefore not FMP; and

(d) that the amount of RM1,614,904.33 claimed by the defendant