Lee Swee Seng J:

THE JUDGMENT OF Y.A. LEE SWEE SENG

[1]This was an application for an injunction by the plaintiff to restrain the first defendant (“D1”) from calling upon a Bond and if the call had already been made by D1 as in this case, then the injunction would be to restrain D1 from receiving the Bond Sum from the second defendant (“D2”), AmBank Islamic Berhad, the issuer of the Bond.

[2]The context of this Bond of RM15.79m was that under a contract between HCM-Hatimuda JV (“Contractor”) and D1, the Contractor was to procure a Bond equivalent to 5% of the contract sum of RM315,800,000.00. The Contractor is an unincorporated joint venture (“JV”) between HCM Engineering Sdn Bhd and Hatimuda Sdn Bhd, the plaintiff. The Bond was instead procured by the plaintiff from D2 in favour of D1 in the form of an on-demand, irrevocable and unconditional bank guarantee.

[3]The Contract by way of a Letter of Acceptance dated 4.8.2016 and a contract dated 24.2.2017 was for the “Design, Construction and Completion” of a particular package from CH.2400 TO CH.4200 of an elevated highway called SUKE (“Project”) which is the Sungai Besi Ulu Klang Expressway and other associated works (“the Works”) for RM315,800,000.00.

[4]D1 had in turn been appointed as a turnkey contractor by the concessionaire of the Project i.e. the Projek Lintasan Sungai Besi - Ulu Kelang Sdn Bhd (“PROLINTAS”).

[5]The Project was supposed to be completed within 30 months of site possession which was given on 29.8.2016 and Completion Date was 28.2.2019.

[6]The lead consultant engineer for the Project is Sepakat Setia Perunding Sdn Bhd (“the Lead Consultant”) and the Quantity Surveyor for the Project is ARH Juruukur Bahan Sdn Bhd (“the QS”).

[7]There were problems all along the way and these were specially highlighted by the plaintiff as showing unconscionable conduct on the part of D1 such that the call on the Bond should be restrained. They were as follows:

(a)Inaccurate Control Point Data;

(b)Relocation of Monsoon Drain;

(c)Delay in JKR Approvals;

(d)Relocation of Utility Cables and Submission to Indah Water Konsortium.

[8]The plaintiff argued that they were entitled to an extension of time (“EOT”) and that the EOT of 193 days allowed was inadequate when the plaintiff had applied for 300 days EOT.

[9]The D1 on the other hand argued that these delays cannot be attributed to them as contractually the plaintiff was to independently check the Control Point (“CP”) Data and be satisfied that the CP Data are correct for a proper synchronization of the lines. D1 submitted that the delay said to be caused by the relocation of the monsoon drain, JKR’s approvals and relocation of utility cables and Indah Water Konsortium (“IWK”) sewerage pipes are all under the contractual obligations of the plaintiff.

[10]D1 further argued that there was increasing delay in the Works for which numerous Notices of Default had been issued to the plaintiff with no avail such that ultimately D1 had not choice but to terminate the Contract and call on the Bond.

Principles

[11]The application was made under section 11Arbitration Act 2005section 50

[12]Section 11AA

“(1) A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and the High Court may make the following orders for the party to -

(a) maintain or restore the status quo pending the determination of the dispute;

......”

[13]The position with respect to when a beneficiary’s call on a Bond may be restrained had been authoritatively decided in the Federal Court’s case in Sumatec Engineering and Construction Sdn Bhd v Malaysia Refining Co Sdn Bhd 10

“[19] The fundamental principle behind a bank guarantee is that it is separate and independent of the underlying contract between the disputing immediate parties and the contract between the account party and the bank. Thus in this case, MRC could, relying on this autonomy principle, call upon BIMB to make payment on the bank guarantee at any time and without proof of any breaches aris