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2025 MarsdenLR 4017
HIGH COURT MALAYA KUALA LUMPUR
TH HEAVY ENGINEERING BERHAD – Appellant
Versus
GLOBALMARINER OFFSHORE SERVICES SDN BHD & ORS AND ANOTHER CASE – Respondent
[Originating Summons Nos: WA-24NCC-403-07/2023 & WA-24NCC-409-07/2023]
The court established that withdrawal of originating summons may be permitted if proceedings are not at an advanced stage and potential prejudice favors withdrawal over continuation.
Headnote:(A) Companies Act 2016 - Section 366 - Withdrawal Applications - Applicants sought to withdraw originating summonses to call a creditors' meeting for approving a scheme of arrangement - Court assessed factors for discontinuance based on precedent cases - Applicants' decision to commence voluntary liquidation was the main reason for withdrawal. (Paras 4, 9, 11, 22)
(B) Considerations - Court evaluated the status of proceedings, the status of respondents, and potential prejudice - Court found proceedings not in an advanced stage, respondents not dominus litis, and greater prejudice in continuing the case. (Paras 12-20)
(C) Issues - The court considered if the withdraw should be allowed given the absence of advanced stage in proceedings and parties' rights. (Paras 19-20)
(D) Ratio Decidendi - The court ruled that allowing the withdrawal was justified as continuation had no practical purpose and would incur unnecessary costs. (Para 22) (E) Result - Withdrawal Applications allowed, parties to bear their own costs.
| Table of Content |
|---|
| 1. introduction of applicants and respondents. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. withdrawal applications and legal requirements. (Para 7 , 8 , 9) |
| 3. consideration factors for withdrawal. (Para 10 , 11) |
| 4. status of proceedings in withdrawal. (Para 12 , 13) |
| 5. dominus litis principle explained. (Para 14 , 15 , 16 , 17 , 18) |
| 6. balancing prejudice in withdrawal decisions. (Para 19 , 20 , 21) |
A. Introduction
[1] TH Heavy Engineering Berhad ("THHE"), the applicant in Kuala Lumpur High Court Originating Summons No WA-24NCC-403-07/2023 ("OS 403") and THHE Fabricators Sdn Bhd ("THHE Fabricators"), the applicant in Kuala Lumpur High Court Originating Summons No WA-24NCC-409-07/2023 ("OS 409") filed applications to withdraw their respective originating summonses ("Withdrawal Applications").
[2] The Court allowed the Withdrawal Applications, for the reasons set out below.
B. Background Facts
[3] THHE and THHE Fabricators shall collectively be referred to as the "applicants", while Globalmariner Offshore Services Sdn Bhd, Blackstone Technology Sdn Bhd and Dynac Sdn Bhd who are the respondents in OS 403 and OS 409, shall collectively be referred to as the "respondents".
[4] The applicants filed OS 403 and OS 409 to obtain an order of Court under s 366(1) of the Companies Act 2016 (" CA 2016") to call for a creditors' meeting for the purpose of approving a scheme of arrangement proposed between the applicants and their creditors. OS 403 and OS 409 were heard together as they involve related parties and are based on the same scheme of arrangement.
[5] Although both OS 403 and OS 409 were ex-parte applications, the respondents had filed applications to intervene in these proceedings, to be allowed to oppose OS 43 and 409 on an opposed ex-parte basis.
[6] THHE did not object to the application to intervene in OS 403, and as such, a consent order dated 7 August 2023 was entered into between THHE and the respondents. THHE Fabricators however objected to the application to intervene in OS 409. After hearing counsel's submissions on the application to intervene in OS 409, the Court allowed the application on 18 August 2023.
C. The Withdrawal Applications
[7] On 11 September 2023, the date fixed for the hearing of the originating summonses, the Court was notified of the applicants' intention to withdraw the originating summonses. The respondents objected to the withdrawal, and the Court directed the applicants to file an application for leave to withdraw, to ensure compliance with O 21 r 3 of the Rules of Court 2012.
[8] Order 21 r 3 states that:
"(1) Except as provided by r 2, a party may not discontinue an action (whether begun by writ or otherwise) or counterclaim, or withdraw any particular claim made by him therein, without the leave of the Court, and the Court hearing an application for the grant of such leave may order the action or counterclaim to be discontinued, or any particular claim made therein to be struck out, as against any or all of the parties against whom it is brought or made on such terms as to costs, the bringing of a subsequent action or otherwise as it thinks just.
(2) An application for leave under this rule shall be made by a notice of application."
[9] The applicants complied with the Court's direction and filed the Withdrawal Applications. The main reason given for the withdrawal is that THHE Fabricators had resolved to commence voluntary liquidation on 6 September 2023, while THHE had resolved to commence voluntary liquidation on 8 September 2023.
[10] In considering the Withdrawal Applications, I first turned to Newlake Development Sdn Bhd v. Zenith Delight Sdn Bhd & Ors , a case relied on by both sides to support their respective positions. The Court of Appeal provided guidance on factors that must be taken into account when the Court considers an application to discontinue an action:
"[23] Before granting the order for discontinuance of an action, the Court must be satisfied that:
