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2025 MarsdenLR 2998
HIGH COURT (SHAH ALAM)
HELMI HAMZAH, JC
AHT Syngas Technology NV – Plaintiff
Versus
Future NRG Sdn Bhd – Defendant
SUIT NO BA-22NCC-104-08 OF 2021
odney Khor Say Aun (with Badrina Ibtisam bt Badrul Hisham) (Rodney & Co) for the plaintiff.
Jarret Ong Kah Lok (with Lee Chia Yee) (Ong, Ric & Partners) for the defendant.
Important Points
Subject
Civil Law - Banking and Finance
Act Referred
Contracts Act 1950: S.24(a), S.66
Evidence Act 1950: S.114(g)
Headnote
(B) Interpretation of documents - Contra proferentem rule - Where a document contains an ambiguity that cannot be resolved, it is construed adversely to the party who proffered it for execution (Para 29(c)).
(C) Choice of law - In the absence of a contractual provision on choice of law, the law of the jurisdiction where the funds emanated and the transaction was performed shall apply, especially where the application of foreign law would violate public policy against illegal moneylending (Paras 51(b), (d)).
Facts of the case:
The Plaintiff applied for and received a sum of €200,000 as a loan with a specified interest rate and penalty. The Defendant, who was not a licensed moneylender, disbursed the funds. The Plaintiff later denied the loan, claiming the sum was an advance payment for construction work. The Defendant filed a counterclaim for the recovery of the principal and interest.
Findings of Court:
The court found that the sum was a loan based on the language of the applications, the repayment terms, and an acknowledgement letter. The loan was illegal under the Moneylenders Act 1951 because the Defendant lacked a license. Consequently, the agreement was void under the Contracts Act 1950. The court further held that the Plaintiff could not utilize the sum as a set-off for other purported debts as there was no agreement to that effect.
Issues: 1. Whether the sum was a loan or an advance payment. 2. Which jurisdiction's law applied to the counterclaim. 3. The status of the loan under the Moneylenders Act 1951. 4. Whether the principal could be recovered via restitution under Section 66 of the Contracts Act 1950. 5. Whether the sum could be used as a set-off.
Ratio Decidendi: A single loan at interest raises a presumption that the lender is carrying on the business of moneylending. If the lender is unlicensed, the agreement is unenforceable. Restitution of the principal sum is refused in cases of unlicensed moneylending to deter such illegal activities and maintain the integrity of the statutory prohibition, as allowing recovery would give illegal lenders the best of both worlds.
Result: Defendant’s counterclaim dismissed with costs of RM20,000.00.
Helmi Hamzah JC:
GROUNDS OF JUDGMENT
(The Defendant’s Counterclaim)
INTRODUCTION
[1]After the Plaintiff’s claim was dismissed for failing to comply with a Consent Order dated 4 July 2022 regarding payment for security for costs (AHT Syngas Technology NV v. Future NRG Sdn Bhd [2025] MLRHU 2270 ; (“5.5% Interest”) and an additional 2.0% interest per annum (“2.0% Additional Interest”) if the loan remained unpaid by 31 July 2016.
[2]For the full trial, parties referred to documents in the Common Agreed Bundle of Documents in Enclosure 44 (“B1”) and Enclosure 45 (“B2”), marked as Part B. The authenticity of these documents was not disputed, but their contents were.
[3]The full trial took place on 9 September 2025, 30 September 2025, and 2 October 2025.
[4]On 1 December 2025, I dismissed the Defendant’s counterclaim with costs of RM20,000.00, subject to an allocatur fee.
[5]Basically, the €200,000.00 ‘friendly loan’ was illegal under the Moneylenders Act 1951 (“MLA 1951”) because the Defendant was not a licensed moneylender.
[6]As a result of the aforementioned illegality under MLA 1951, the €200,000.00 ‘friendly loan’ agreement was therefore void under Sections 24(a), (b), and (e)Contracts Act 1950(“CA 1950”).
[7]I also did not allow restitution under Section 66CA 1950
[8]I will now set forth my full grounds of judgment for doing so.
SALIENT FACTS
[9]On 4 April 2016, the Plaintiff sent a letter to the Defendant and applied for a €200,000.00 loan at 5.5% Interest and 2.0% Additional Interest (“First Loan Application”) [pages 60-61 of B1]. In the First Loan Application, the Plaintiff requested that the €200,000.00 loan be disbursed on 7 April 2016.
[10]On 4 April 2016, the Plaintiff sent another letter to the Defendant and applied for a €200,000.00 loan at 5.5% Interest and 2.0% Additional Interest (“Second Loan Application”) [pages 63-64 of B1 ]. In the Second Loan Application, the Plaintiff also requested that the €200,000.00 loan be disbursed on 7 April 2016.
[11]On 6 April 2016, the Defendant accepted the terms and conditions of the First Loan Application [page 62 of B1].
[12]On 7 April 2016, the Defendant remitted RM866,927.20 to the Plaintiff, which was equivalent to €200,000.00 [pages 1-2 of B2].
[13]On 26 July 2016, the Plaintiff acknowledged receipt of the €200,000.00 loan from the Defendant (“Acknowledgement Letter”) [page 66 of B1].
[14]On 31 July 2016, the Plaintiff was supposed to repay the €200,000.00 ‘friendly loan’ to the Defendant, but did not fulfil this obligation.
[15]On 1 August 2016, the Defendant issued a notice of demand requiring the Plaintiff to repay the €200,000.00 ‘friendly loan’ plus 5.5% Interest within 7 days from the date of the notice of demand (“First Notice of Demand”) [page 178 of B1].
[16]On 11 August 2016, Defendant issued another notice of demand requiring the Plaintiff to repay the €200,000.00 ‘friendly loan’ plus 5.5% Interest within 7 days from the date of the notice of demand (“Second Notice of Demand”) [page 179 of B1].
[17]The Plaintiff denied making any loan application to the Defendant and stated that it only received an advance payment of €200,000.00 from the Defendant, which had already been utilised to offset the amount purportedly owed by the Defendant in relation to the construction of the 1MW coal gasification system for another company named Fitters NRG Sdn Bhd.
ISSUES
[18]The Defendant’s counterclaim concerns the following issues:
(a)Loan or Advance Payment?
Did the Defendant give an advance or a ‘friendly loan’ of €200,000.00 (RM866,927.20) at 5.5% Interest and 2.0% Additional Interest to the Plaintiff? (“Issue No.1”).
(b)German law or Malaysian Law?
Which law, German or Malaysian, should be applied to dispose of the Defendant’s Counterclaim? (“Issue No.2”)
(c)Status Of The Loan Under MLA 1951
If the Defendant lent €200,000.00 to the Plaintiff at 5.5% Interest and 2.0% Additional Interest, what is the status of the said €200,000.00 ‘friendly loan’ under MLA 1951? (“Issue No.3”).
(d)Recovery Of The Principa
