Elaine Yap JC:

INTRODUCTION

[1]In this originating summons, the plaintiffs seek a declaration that a sale and purchase agreement dated 15 September 2020 (‘SPA’) has been mutually terminated after the first defendant failed to deliver the goods purchased and consequently, the sum RM1,194,000 held under a stakeholders’ agreement dated 21 September 2020 (‘stakeholders’ agreement’) should be refunded.

[2]More than a year after the initiation of the suit, the first defendant through its solicitors, Messrs M Raman & Associates, filed encl 56 on 31 March 2024 for various relief. The prayers sought can be summarised as follows:

(a)plaintiffs to furnish security for costs in the sum of RM150,000 each to the first defendant’s solicitors as stakeholders (under s 11(1)(e)Arbitration Act 2005O 23 of the Rules of Court 2012

(b)plaintiffs be compelled to commence arbitration proceeding within six months from an order (to stay proceedings under s 10Arbitration Act

(c)the sum of RM1,194,000 held by Messrs Fahmi Zafri Ashraf & Co (‘FZA & Co’) be at status quo pursuant to s 11(1)(a)Arbitration Act 2005

[3]I dismissed encl 56 on 8 November 2024 with costs of RM10,000 and these are my reasons.

BACKGROUND FACTS

[4]Simfoni Humaira Resources (as buyer) and the first defendant (as seller) entered into the SPA for the sale and purchase of disposable nitrile gloves. The total contract value was RM7,164,000. A deposit of RM1,194,000 (‘deposit’) was paid to the account of FZA & Co as the seller’s solicitors.

[5]FZA & Co, Simfoni Humaira Resources and the first defendant then entered into the stakeholders’ agreement under which FZA & Co undertook to hold the deposit as a neutral stakeholder. The monies were deposited into the client account of the firm.

[6]Issues arose with the delivery of the goods purchased under the SPA. Based on a series of email exchanges in March/April 2021 between one Ronnie Lim, Sales & Marketing Malaysia of the first defendant, Abdillah of the first plaintiff and Sylwia Kostecka for the second plaintiff, the plaintiffs say the SPA was mutually terminated.

PRELIMINARY OBJECTIONS

[7]The first defendant raised various ‘preliminary objections’ in written submissions filed by counsel on 28 October 2024 in support of encl 56 found in encl 99 (‘D1’s written submissions’). The ‘preliminary objections’ were as follows:

(a)based on s 8Registration of Business Act 1956 (‘the RBA’)

(b)according to Polish company registration documents found by the first defendant, the second plaintiff was registered on 1 September 2022 and did not exist when the matters in dispute transpired between 15 September 2020 and 17 May 2021;

(c)the content of the plaintiffs’ affidavits is hearsay and inadmissible and/or scandalous and constitutes contempt in the face of the court by reference to various factual assertions made in paras 14 and 15 of D1’s written submissions; and

(d)the action is time-barred.

The first plaintiff’s locus standi

[8]The first defendant contended that the expiry of the registration of Simfoni Humaira Resources under the RBA on 28 October 2022 before this suit was filed, rendered the first plaintiff incompetent to enforce the SPA and/or the stakeholders’ agreement without leave of court.

[9]This court was of the view that the matter of the first plaintiff’s locus standi is a substantive matter that ought not to have been addressed as a preliminary objection. It was not specifically put in issue in the affidavits filed. Since the issue was ventilated in written submissions and may be an issue taken up on appeal, I will address it here.

[10]The unchallenged averment by the first plaintiff is that Hasnor Afifah bt Mohd Noor was at all material times the sole proprietor of Simfoni Humairah Resources when the SPA and the stakeholders’ agreement were entered into and when the facts setting up the pleaded cause of action arose in 2021.

[11]The first defendant relied on the case of Arci Enterprise (suing as a firm) v Selinsing Mining Sdn Bhd & Ors Arci Enterprise. The