A winding-up petition cannot be restrained where the debt is undisputed and the statutory notice complies with the legal requirements.

A. Introduction

[1] The plaintiff filed an originating summons, seeking a Fortuna Injunction to restrain the defendant from presenting a winding-up petition or continuing with winding-up proceedings against it.

[2] The court dismissed the originating summons, after finding that the debt owed by the plaintiff to the defendant is an undisputed debt.

B. Background Facts

[3] By a letter of award dated 19 October 2020 ("Letter of Award"), the defendant was appointed by the plaintiff as a contractor for works involving the construction of a residential apartment in Pantai Dalam, Kuala Lumpur ("Project").

[4] The defendant claimed it ceased works due to non-payment by the plaintiff. The defendant initiated adjudication proceedings against the plaintiff, and an adjudication decision dated 30 June 2022 was issued in favour of the defendant.

[5] On 22 July 2022, the plaintiff and the defendant entered into a settlement agreement ("Settlement Agreement"). The Settlement Agreement provides, amongst others, that:

a. The Letter of Award shall be mutually terminated; and

b. Any retention sums that have been paid under the Letter of Award shall be returned.

[6] The defendant issued letters of demand to the plaintiff seeking a return of the retention sum amounting to RM462,545.10 ("Retention Sum") that had been paid by the defendant to the plaintiff. The plaintiff did not respond, and as such, the defendant issued a statutory notice of demand dated 6 September 2023 for the Retention Sum, pursuant to s 466 of the Companies Act 2016 ("Winding-Up Notice").

[7] In response to the Winding-Up Notice, the plaintiff filed an originating summons, seeking to restrain the defendant from filing and presenting a winding-up petition against it.

C. Considerations And Findings

[8] The court's power to restrain the presentation of a winding-up petition can be traced back to the Australian case of Fortuna Holdings Pty Ltd v. Deputy Federal Commissioner of Taxation [1976] 2 ACLR 349. The Supreme court of Victoria held that an injunction may be granted:

a. Where the presentation of the petition might produce irreparable damage to the company and where the proposed petition has no chance of success; and

b. Where a petitioner has chosen to assert a disputed claim by a procedure which might produce irreparable damage to the company rather than by a suitable alternative procedure.

[9] The principles set out in Fortuna Holdings (supra) have been recognised by the Malaysian courts (see Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd ; ; and Pacific & Orient Insurance Co Bhd v. Muniammah Muniandy ; ).

[10] The approach of the courts in considering the grant of a Fortuna Injunction has been clear, in that the injunction will only be granted when there is a debt that is bona fide disputed on substantial grounds.

[11] In the present case, the plaintiff argued that the intended winding- up petition against it has no likelihood of success and will produce irreparable damage to it, as the debt alleged to be owing by the plaintiff to the defendant, namely the Retention Sum, is disputed on substantial grounds.

[12] After considering documentary evidence before the court, the court finds that the Retention Sum does not qualify as a debt that is disputed on substantial grounds.

[13] The Retention Sum is due under the Settlement Agreement. The relevant terms of the Settlement Agreement are as follows:

a. Clause 1.1: "In consideration of the mutual promises contained in this Agreement, Impero Land shall pay Aneka Jaringan the sum of Ringgit Malaysia Five Million and Two Hundred Thousand Only (RM5,200,000.00) in accordance w