The court determined that unjustified seizure of delivered goods and the contractual terms regarding late deliveries upheld the Plaintiff's claims, holding the Defendants liable for payment and deposit forfeiture.

1. The Plaintiff by its Statement of Claim dated 3 November 06 claimed for the total sum of RM1,504,241.38 together with interest and costs against the 3 Defendants in respect of goods sold and purchased for the use and/or repair of the ship known as KD SRI INDERAPURA (the Ship)

2. The goods sold and purchased comprised of inter alia , spares for circuit breakers, switchboards and other marine parts (the said Goods) that were ordered by the Second Defendant through the First Defendant vide official Purchase Orders issued to the Plaintiff.

3. It was a term of the contract that the said Goods were to be supplied and delivered by the Plaintiff to the store of the First Defendant at its Navy Base in Lumut, Perak.

4. It was also stated in the Purchase Orders that the said Goods were to be delivered by the Plaintiff to the First Defendant , mostly within a period of 4 weeks from the dates of the Purchase Orders (Exhibit P1).

5. Part of the said Goods were supplied and delivered to the First Defendant but some of the said Goods were not.

6. For ease of reference, the Plaintiff's claim in respect of the said Goods can be divided into 3 groups namely:

7. Plaintiff's claim for Group A goods

Between 5 December 2000 and 19 December 2000, the Second Defendant issued Purchase Orders for Group A goods to the Plaintiff. The Plaintiff accordingly purchased the Group A goods from its US Suppliers. All the Group A goods were delivered on 8 March 2001 to the First Defendant's store at its Navy Base in Lumut in accordance with the contract.

The Group A goods were however later seized by the Navy Police known as PROTELA on 14 June 2001 on suspicion that the goods were either stolen, recycled or smuggled into the country without payment of custom duties. The Group A goods were then handed over by PROTELA to the Customs Department for investigations. The Group A goods remained in the custody of the Customs Department until July 2007. As the Group A goods were in the custody of the Customs Department they could not be used in the repair of the Ship. The Defendants refused to pay the Plaintiff for the Group A goods on the ground that the Plaintiff did not follow the proper procedure when importing the Group A goods thereby causing the seizure of the same by PROTELA and which were then handed to the Customs Department for further investigations.

The Plaintiff contended that the seizure of the Group A goods by PROTELA was unjustified as the goods were neither stolen, recycled nor smuggled into the country.

Sometime in mid July 2007, almost 7 years after the Group A goods were seized, the Customs Department contacted the Plaintiff to collect the said Group A goods as they were being returned unconditionally to the Plaintiff. The Plaintiff was not required to pay the custom duties (estimated to be in the sum of RM108,086.18) nor was the Plaintiff required to pay any compound to the Customs Department. Importantly, the Plaintiff and/or its Directors were not charged for any offence under the Customs Act .

8. Plaintiff's claim for Group B Goods

The Group B goods were also ordered by the Second Defendant from 5 December 2000 to 19 December 2000. The Group B goods were to be delivered by the Plaintiff to the First Defendant's store at its Navy Base in Lumut, mostly within the period of 4 weeks, from the dates stated in the Purchase Orders that is, between 4 January 2001 and 11 January 2001. The Plaintiff was unable to deliver the Group B goods on or before 11 January 2001. The Plaintiff had been informed by its US Suppliers that there were delays in the del