Directors are required to act in good faith and in the best interests of the company, with any breaches needing to be proven on a balance of probabilities along with demonstrating actual damages.

[1]This appeal raises two novel questions, namely:

(1)if two inferences are equally open to the court from the same set of facts and these inferences do not concern the credibility of a witness, is there a rule that the court should accept the non-sinister inference and reject the sinister inference (‘non-sinister inference rule’)? and

(2)with regard to the tort of conspiracy to injure a claimant by unlawful means, whether Malaysian courts should substitute the requirement of actual knowledge regarding the unlawful means on the part of the conspirators and accept a lower threshold of ‘constructive intent’ as laid down by the apex courts in Canada and the United Kingdom (‘UK’) as follows:

(a)the decision of the Supreme Court of Canada in Canada Cement LaFarge Ltd v British Columbia Lightweight Aggregate Ltd [1983] 1 SCR 452; and

(b)the joint judgment of Lord Sumption and Lord Lloyd-Jones JJSC in UK’s Supreme Court case of JSC BTA Bank v Ablyazov and another [2018] 2 WLR 1125

[2]A draft of this judgment (‘draft’) had been previously forwarded to Hanipah bt Farikullah FCJ (who heard this appeal in the Court of Appeal) and Mariana bt Haji Yahya JCA. Both my learned sisters had expressed their agreement with the draft.

B. BACKGROUND

[3]We shall refer to the parties as they were in the High Court.

[4]With regard to the plaintiff company (‘plaintiff’):

(1)the shareholders of the plaintiff are as follows:

(a)the first defendant company (‘first defendant’) holds 20% of the shares in the plaintiff (‘first defendant’s 20% shares (plaintiff)’); and

(b)80% of the plaintiff’s shares (‘AMSB’s 80% shares (plaintiff)’) belong to Azimuth Marine Sdn Bhd (‘AMSB’);

(2)the first defendant had nominated the second and third defendants (‘second defendant’ and ‘third defendant’) to be non-executive directors of the plaintiff. The second and third defendants are also directors of the first defendant;

(3)Dato’ Seri Suresh Emmanuel Abishegam (‘Captain Suresh’) is:

AMSB is a member of Azimuth group of companies which is ultimately owned by East India Shipping Corp Sdn Bhd (‘EISC’). Captain Suresh is the majority shareholder of EISC;

(a)the managing director (‘MD’) and Chief Executive Officer (‘CEO’) of the plaintiff; and

(b)a director of AMSB.

(4)Dato’ Ahmad Johari bin Abdul Razak (‘Johari’) is a director of the plaintiff and the chairman of its board of directors (‘BOD’);

(5)Dato’ Abdul Latiff bin Ahmad (‘Latiff’) is a director of the plaintiff. Mr Jaya Sudhir a/l Jayaram (‘Sudhir’) is an alternate director of Latiff in the plaintiff as at 7 March 2016. With effect from 2 November 2016, Sudhir is a director of the plaintiff; and

(6)the plaintiff’s Financial Controller is Puan Azian bt Abdul Aziz (‘Azian’).

[5]The plaintiff is a ‘special purpose vehicle’ to undertake a project with Vale Malaysia Minerals Sdn Bhd (‘Vale’) in Lumut, Perak Darul Ridzuan (‘Project’). With regard to the project:

(1)the plaintiff was required to construct, own and operate seven harbour tug boats (‘Tug Boats’) to:

For the purpose of the project, the plaintiff and Vale entered into a ‘Harbour Tugs Services Agreement’ on 11 April 2013 (‘Harbour Tugs services agreement (plaintiff-Vale)’).

(a)be chartered to Vale; and

(b)provide harbour tug services.

(2)by way of a ‘BIMCO’ (Baltic and International Maritime Council) standard ship management agreement dated 12 April 2013 (‘BIMCO agreement’), the plaintiff appointed Azimuth Ship Management Sdn Bhd (‘ASM’) to manage and operate the Tug Boats on behalf of the plaintiff; and

(3)the plaintiff obtained a US$51,845.183 banking facility from Export-Import Bank of Malaysia Bhd (‘Bank’) to finance 70% of the plaintiff’s expenditure for the project — please refer to the facility agreement dated 9 April 2013 between the plaintiff and the Bank (‘plaintiff’s facility’). The balance 30% for the project was to be funded by the plaintiff’s shareholders.

[6]On 12 April 2013, the plaintiff entered