The court dismissed the application for an interim injunction as the plaintiff failed to establish a strong prima facie case of unconscionability.

Introduction

[1] This is an application for an interim injunction to restrain the 2nd defendant from receiving monies under the performance bond issued by the 3rd defendant (encl 3). The injunction is to hold till the hearing of the substantive matters which initially were raised by way of an originating summons. The court has however converted the originating summons into a writ pursuant to O 28 r 12 of the Rules of 2012 as there were obvious substantial disputes on the facts. The parties were also directed to file a fresh statement of claim and defences in place of the affidavits filed. These matters are being attended to presently.

Material Facts

[2] The 1st defendant was awarded a contract by the 2nd defendant to develop a project known as "Perumahan Generasi Baharu Felda" (PGBF) using IBS system package (C2-1) at Felda Bukit Sagu 1, Wilayah Kuantan, Pahang. By letter dated 28 January 2014, the 1st defendant sub-contracted the said project to the plaintiff (said sub-contract).

[3] In his affidavit in support of the application, Tan Seah Lim @ Tan Swee Lim, the Managing Director of the plaintiff inter alia claims that at all material times, the 1st defendant represented to the plaintiff that it had been appointed by the 2nd defendant as the main contractor vide letter of appointment dated 19 November 2013 (letter of appointment). It also claimed that this letter was subject to the execution of a formal contract to be drawn up between the 1st and 2nd defendants. At all times, the 1st defendant is said to have consistently made representations and assured the plaintiff that the formal contract was "going to be executed immediately and that the formal sub-contract between the 1st defendant and the plaintiff would then be entered into simultaneously or shortly after the execution of the formal contract."

[4] Under the said sub-contract, the 1st defendant is said to have agreed that it "shall consult and involve the plaintiff at all times in the dealings and negotiations for the drafting, vetting and finalisation of the terms of the formal contract" and that the 1st defendant "shall obtain the written approval of the plaintiff for the execution of the same". The plaintiff arranged a bank guarantee to be issued in the 1st defendant's name for the sum of RM1,672,500.00 in favour of the 2nd defendant. This bank guarantee is required under the 1st defendant's letter of appointment with the 2nd defendant. In return, the plaintiff shall be entitled to all payments by the 2nd defendant to the 1st defendant made under the formal contract without any claim and/or set-off whatsoever.

[5] The plaintiff was also to pay the 1st defendant a sum of RM3.45 million. The plaintiff says it has paid the 1st defendant RM500,000.00 on 28 January 2014; another RM500,000.00 within the final week of February 2014; and the balance of RM2,450,000.00 in monthly instalments of RM222,000.00 from February 2014 to November 2014; and the final instalment of RM230,000.00 to be paid in December 2014.

[6] In relation to the bank guarantee (BG), the plaintiff and the 1st defendant further agreed that the 1st defendant was to open a designated collection account (DCA) controlled solely by the 3rd defendant for the purpose of channeling all proceeds of the main contract. All monies in that DCA was to be credited into the plaintiff's designated collection account (PDCA). Thereafter, the monies were to be utilised in a particular manner: 10% of each contract proceeds or RM222,000.00 whichever is lower to be deposited with the DCA for each consecutive month until November 2014. Subsequently, 10% of the contract proceeds or RM230,000.00 was to