JUDGMENT

Elaine Yap Chin Gaik JC:

[1] The Plaintiff applied for summary judgment to be entered against the Defendants for monies owed under a written agreement called the Lyte Payor Services Agreement dated 18 August 2023 and addenda dated 5 September 2023 and 8 September 2023 ("Agreement"). The 1st Defendant's payment obligations under the Agreement are guaranteed by the 2nd and 3rd Defendants.

[2] The Defendants argued that it is a triable issue whether the Agreement is illegal for one or more of the following reasons:

(a) breach of the Moneylenders Act 1951 because the Plaintiff is not licensed under the Act

(b) breach of the Islamic Financial Services Act 2013 because the Plaintiff is not licensed under the Act

(c) the services provided are not proven to be Syariah compliant as represented.

[3] The underlying issue raised concerned the nature of the transaction that is evidenced by the Agreement ie whether it is fundamentally a moneylending agreement as contended by the Defendants or a Syariah compliant factoring product that can be provided without a license under the Islamic Financial Services Act 2013 as contended by the Plaintiff.

[4] Under the Agreement, the service is provided on a platform operated by Lyte Ventures Pte Ltd and is described as "Financing of Receivables pursuant to Developer Sales".

[5] According to the Plaintiff, the 1st Defendant is the "Payor" who, as a real estate agent selling developer properties, pays commissions to its agents on sales closed, and each agent is the "Payee" who requests for the financing of its receivables on the platform.

[6] The Plaintiff is the "Supplier" who pays the Payee a proportion or all of what is due to the Payee once the Payor approves the Payee's financing request. The said Syariah compliant Islamic financial services feature lies in the financing method for the financing of the Payee.

[7] In the Service Transaction (as it is called), the Supplier purchases the Payee's receivables but not with cash at a discount as in a conventional factoring business. The Islamic financial services element is present because:

(a) The Supplier in conducting its factoring business, purchases receivables from the Payee (creditor) with an exchange of commodities instead of cash

(b) The Payee gets cash when the commodity is sold by an agent while the Payor (the debtor) eventually pays the Supplier (the factor).

[8] The Service Transaction is accordingly said to mirror the Bay'-al-Dayn Bi al-Sila transaction that is sanctioned as Syariah compliant by Bank Negara Malaysia. On the face of the Agreement, this Court found that the elements of the Bay'-al-Dayn Bi al-Sila transaction are present in the method of financing, based on a description of the transaction in a Bank Negara Malaysia publication of Syariah council decisions produced by the Plaintiff. As the Plaintiff is essentially conducting a factoring business, it would also appear that it can be carried on without a license because it is not a business that requires a license or approval according to s 8 of the Islamic Financial Services Act 2013.

[9] The Defendants' principal argument is that the Service Transaction cannot be a factoring transaction because there is no assignment of a debt by a creditor. This argument is premised on the understanding that it is the 1st Defendant (a debtor) who purports to assign its book debts to the Plaintiff (the factor), which does not accord with the requirements of a factoring arrangement. From the Court 's interpretation of the Service Transaction, this understanding is not correct as detailed above.

[10] In the circumstances, this Court was able to conclude on the documents in the affidavits that the Agreement is not a moneylending agreement nor is it conceivably illegal for any other reason. Without a more cogent reason assigned for asserting that the Agreement is illegal, this Court found no need to convene a trial on a matter that turns on the construction of the Agreement.

[11] As there was no disp