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2025 MarsdenLR 4659
HIGH COURT MALAYA PENANG
S L NG TRADING AGENCY SDN BHD – Appellant
Versus
TOHTONKU SDN BHD – Respondent
[Civil Suit No: PA-22NCvC-7-01/2025]
The court may strike out a suit as an abuse of process when it is initiated in bad faith, such as forum shopping, especially when a similar case is already proceeding in another jurisdiction.
Headnote:(A) Specific Relief Act 1950 - Sections 50 and 51(1) - Rules of Court 2012 - Order 18 rule 19(1)(d), Order 29 rule 1 - An application to strike out a suit alleging forum shopping and abuse of process where the Plaintiff filed a subsequent suit while a prior suit on the same subject matter was pending - Dismissal of interim injunction application on grounds of adequacy of damages and non-compliance with procedural rules - Resulted in striking out of the Plaintiff's suit as an abuse of process. (Paras 3, 24, 41, 78)
(B) Abuse of Process - Courts possess an inherent jurisdiction to prevent abuse of process and may strike out actions where the true purpose is oppressive - The Plaintiff guilty of forum shopping by filing a new suit to gain tactical advantage over the Defendant. (Paras 42, 46)
(C) Jurisdiction Clauses - Jurisdiction of Kuala Lumpur Court specified in the Master Distributor Agreement, establishing the venue for disputes. (Paras 7, 19)
Facts of the case:
Plaintiff and Defendant entered into a Master Distributor Agreement. The Defendant claimed substantial debts due from the Plaintiff under the Agreement. The Plaintiff initiated a suit in Penang intending to obtain an ex parte injunction despite an earlier suit filed by the Defendant in Kuala Lumpur.
Findings of Court:
The court found the Plaintiff's conduct amounted to an abuse of process and granted the Defendant's striking out application.
Issues: Whether the Plaintiff's suit constituted an abuse of court process through tactical forum shopping; the legitimacy of claims and venue on jurisdiction.
Ratio Decidendi: The court ruled that the Plaintiff's attempt to seek an injunction while knowing of the prior pending action and jurisdiction clause demonstrated bad faith and manipulation of court procedures.
Result: The Plaintiff's suit was struck out.
| Table of Content |
|---|
| 1. introduction of the applications before the court. (Para 1 , 2) |
| 2. arguments regarding the applications to strike out and injunctions. (Para 3 , 4 , 20 , 21) |
| 3. facts regarding the master distributor agreement and breaches. (Para 5 , 6 , 10 , 12 , 13 , 16) |
| 4. legal principles regarding striking out claims. (Para 40 , 41 , 42) |
| 5. discussion on abuse of process and forum shopping. (Para 46 , 47 , 68) |
Introduction
[1] These three applications were heard together.
(i) Enclosure 9 dated 20 January 2025. This is the Plaintiff's ("P") application on an inter partes basis for an interim injunction ("inter partes injunction application"), pending the disposal of this suit ("PGHC suit"). Enclosure 9 is made under ss 50 and 51(1) of the Specific Reliefs Act 1950 and O 29 r 1 of the Rules of Court 2012.
(ii) Enclosure 17 dated 7 February 2025. This is the Defendant's ("D") application to strike out the PGHC suit ("striking out application"). Enclosure 17 is made under O 18 r 19(1)(d) of the Rules of Court 2012.
(iii) Enclosure 25 dated 14 February 2025. This is P's application to transfer the PGHC suit to the Kuala Lumpur High Court ("transfer application"), to be consolidated and heard together with Suit No WA - 22 NCvC - 16 - 01 / 2025 ("KLHC suit"). Enclosure 25 is made under O 57 r 1 of the Rules of Court 2012.
[2] On 27 March 2025, I dismissed encl 9 (P's inter partes injunction application). Further, I allowed encl 17 (D's striking out application), and struck out the PGHC suit. Consequently, I granted leave for P to withdraw encl 25 (P's transfer application), since it had become academic. As a result of the PGHC suit being struck out, there is nothing left to be transferred. Here are the grounds of my decision.
Striking Out Application (Enclosure 17)
[3] Enclosure 17 is D's application to strike out the PGHC suit on the ground that P is guilty of forum - shopping and tactical manoeuvre. In that P filed this subsequent PGHC suit with the ulterior motive of trying to steal a march on D. And to obtain an ex parte injunction to restrain D's KLHC suit against P, that was filed earlier in time.
Transfer Application (Enclosure 25)
[4] Enclosure 25 is P's application to transfer this subsequent PGHC suit to the Kuala Lumpur High Court, to be consolidated and heard together with the KLHC suit. This is on the ground that the Kuala Lumpur High Court is the forum conveniens.
Background Facts
Parties
[5] D carries on the business of manufacturing and supplying household consumer products. P is in the business of distributing consumer products.
Master Distributor Agreement
[6] The parties entered into a Master Distributor Agreement dated 18 February 2019 ("Master Distributor Agreement"), for P to purchase consumer products from D and distribute the same within Peninsular Malaysia.
[7] Clause 13.8 of the Master Distributor Agreement stipulates that both parties agree to submit to the jurisdiction and venue of the courts in Kuala Lumpur. It reads:
"13.8 This Agreement shall be construed and interpreted in accordance with the laws of Malaysia and both parties agree to submit to the jurisdiction and venue of the Courts in Kuala Lumpur. "
[8] As per the preamble of the Master Distributor Agreement, D's business office is situated in the Klang Valley (ie Subang Jaya, Selangor).
BETWEEN
TOHTONKU SDN BHD (COMPANY NO. 38311-A) a company incorporated in Malaysia and having its business office at No. 10, Jalan TP 2, Taman Perindustrian UEP Subang Jaya, 47620 Subang Jaya, Selangor barul Ehsan, Malaysla (hereinafter referred to as "TTK");
AND
S L NG TRADING AGENCY SDN BHD (Company No. 413026-K), a company incorporated in Malaysia and having its registered office at HS (M) 3700, PTD 149229, Jalan Berjaya 8, Taman Perindustrian Berjaya, Kempas Lama, 81200 Johor Bahru, Malaysia. (hereinafter referred to as "Distributor").
[9] This is also reflected in the notice clause at cl 13.6 of the Master Distributor Agreement.
Main Business Operations In
