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2023 MarsdenLR 3066
HIGH COURT (KUALA LUMPUR)
Eversendai Constructions (M) Sdn Bhd – Plaintiff
Versus
Samsung C&T Corporation UEM Construction JV Sdn Bhd – Defendant
ORIGINATING SUMMONS NO WA-24C-156-08 OF 2022
James Monteiro (with Vishal V Kumar and Ban Qiao Hui) (James Monteiro) for the plaintiff.
Kuhendran Thanapalasingam (with Daniel Lau Hsien Yuong, Michael Koh Boon Han and Agesh Krishendra Jeyaratnam) (Zul Rafique & Partners) for the defendant.
The court upheld the principle of unconscionability in restraining a demand on a bank guarantee when the demand violates contractual notice requirements, highlighting the need for fair decision-making.
Headnote:(A) Specific Relief Act 1950 - Sections 50 and 51 - Courts of Judicature Act 1964 - Section 25(2) and paragraph 6 - Arbitration Act 2005 - Section 11(1) - Injunctive Relief - Application to restrain Defendant from making a demand on Bank Guarantee on grounds of unconscionability - Court found that Defendant failed to comply with contractual requirements, including notice provisions, prior to calling on Bank Guarantee. (Paras 1-3, 60-70).
(B) Legal principle of unconscionability - Court stated that unconscionability allows for intervention in calls on bank guarantees under certain circumstances: showing clear evidence of unconscionable conduct can justify such intervention. (Paras 40-44).
(C) Dismissal of Defendant's claims as they were made without complying with mandatory notice and consultation requirements of the Subcontract Agreement. (Paras 64-66).
(D) Result of the case: Injunction Application allowed; Defendant prohibited from calling on the Bank Guarantee. (Paras 91-92).
| Table of Content |
|---|
| 1. injunction application procedural context. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. parties’ corporate identities and contract details. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 3. course of events leading to adjudication. (Para 21 , 22 , 23 , 24 , 25 , 26 , 30 , 31 , 32) |
| 4. allegations of unconscionability. (Para 41 , 42 , 44 , 45) |
| 5. issues of process and their impact on unconscionability. (Para 54 , 76 , 84) |
| 6. final decision on the injunctive relief. (Para 87 , 89 , 90) |
| 7. court's conclusion and order. (Para 91 , 92) |
Aliza Sulaiman J:
GROUNDS OF JUDGMENT
Introduction
[1]This is basically an application by the Plaintiff for an order for injunctive relief against the Defendant to prevent the Defendant from making a demand on the Bank Guarantee dated 31.5.2016 (‘BG’) issued by HSBC Amanah Malaysia Berhad (‘HSBC’) on behalf of the Plaintiff in favour of the Defendant on the ground of unconscionable conduct by the Defendant (‘Injunction Application’).
[2]Specifically, vide Originating Summons (‘O.S.’) dated 11.8.2022 (encl.1), the Plaintiff sought, among others, for the following orders:
“1. that the Defendant whether by themselves or through their servants, agents, employees and/or anyone who acts under the instructions of the Defendant, its agents and/or its employees and/or otherwise howsoever shall and hereby be restrained from making a demand or issuing a demand on the entire and/or part of the sum of the performance security in the sum of RM32,849,223.61 (“Performance Security”) by way of a Bank Guarantee No. APNKI401061 dated 31.5.2016 issued by HSBC Amanah Malaysia Berhad on behalf of the Plaintiff in favour of the Defendant (“Bank Guarantee”) until final disposal of all disputes between the Plaintiff and the Defendant pursuant Clause 20.4 and Clause 20.5 of the Subcontract Agreement dated 1.5.2016 (Reference No.: SSUEM/201512/DSC/8)
(“Subcontract Agreement”) or until further order;
2. that the Defendant whether by themselves or through their servants, agents, employees and/or anyone who acts under the instructions of the Defendant, its agents and/or its employees and/or otherwise howsoever shall and hereby be restrained from receiving the full sum or any part of the said Bank Guarantee until final disposal of all disputes between the Plaintiff and the Defendant pursuant Clause 20.4 and Clause 20.5 of the Subcontract Agreement or until further order;
3. further and in the alternative, in the event the Performance Security guaranteed under the Bank Guarantee has been paid to the Defendant, that the Defendant whether by themselves or through their servants, agents, employees and/or anyone who acts under the instructions of the Defendant, its agents and/or its employees and/or otherwise howsoever shall and hereby be restrained from utilising the sum received under the said Bank Guarantee until final disposal of all disputes between the Plaintiff and the Defendant pursuant Clause 20.4 and Clause 20.5 of the Subcontract Agreement dated 1.5.2016 or until further order;
4. further to prayer (3) above, the Defendant shall be ordered to refund the sums received under the said Bank Guarantee to HSBC Amanah Malaysia Berhad or alternatively to place the sum received under a stakeholder account with accruing interest with HSBC Amanah Malaysia Berhad until final disposal of all disputes between the Plaintiff and the Defendant pursuant Clause 20.4 and Clause 20.5 of the Subcontract Agreement or until further order;
5. further and/in the alternative, a declaration that it is unconscionable for the Defendant to call on the Bank Guarantee;
6. exemplary damages;
7. costs;
8. liberty to apply ...”.
[3]On the same date, the Plaintiff had also filed an Ex-Parte Notice of Application (encl. 2) for an order for injunctive relief against the Defendant pending disposal of encl. 1 together with a Certificate of Urgency (encl. 6)
[4]The same provisions are cited in the intitulement of encls. 1 and 2 namely, ss 5051 Specific Relief Ac
