The court emphasized the principles of res judicata and the independence of on-demand performance bonds, asserting the lack of unconscionability claims against the appellant.

The Appeals

[1] The respondents formed a joint venture company (Inai Kiara-Hwa Chi JV) to undertake a project known as the 'Proposed Construction and Completion of Breakwater for the New Deep Water Terminal at Kuantan Port, Pahang' for the East Coast Economic Region Development Council, (ECERDC) (the appellant) pursuant to a contract dated 23 July 2013.

[2] By a notice dated 25 November 2016, the appellant terminated the contract. By a notice, on the same date, the appellant called upon Malayan Banking Berhad (Maybank) to pay a sum of RM40,416,511.11 under a bank guarantee as stipulated in the contract.

[3] On 9 November 2017, the respondents filed Kuala Lumpur High Court Suit No: WA-22NCvC-621-11-2017 (the KL Suit) against the appellant, including for a declaratory order that the contract was reinstated and binding on the parties and for specific performance and injunctive relief.

[4] The next day, by encl 5, the respondents applied for an interim injunction to restrain the appellant from effecting any claim against the bank guarantee until the disposal of this suit and was granted an ex parte injunction. By encl 10, the appellant applied to set aside the ex parte injunction. At the inter partes hearing, the learned judge allowed encl 5 (Appeal No 1050) and dismissed encl 10 (Appeal No 1049). Hence, these two appeals.

[5] By an Originating Summons (encl 35), the respondents applied to expunge certain letters marked 'without prejudice' which were referred to and annexed as exhibits in the Affidavit of one Arizan bin Arifin, affirmed on behalf of the appellant, to be used in encl 5 and encl 10. The learned judge allowed the OS application. The appellant has filed an appeal against that decision. This is Appeal No 1048.

[6] By encl 22, the appellant applied to stay the proceedings of this suit pending reference of the parties' disputes to arbitration. The learned judge dismissed the application. The appellant filed an appeal (Appeal No 1488) against that decision.

[7] The parties agreed that the four appeals be heard together and that parties would submit on Appeals 1049 and 1050 together first and then submitted on Appeal 1048 and Appeal 1488.

Background Facts

[8] By a letter of acceptance, dated 19 March 2013, and a contract, dated 23 July 2013, the respondents were appointed the contractor for the project. Clause 51 of the contract required the respondents to provide a performance bond equivalent to 5% of the total contract sum of RM808,330,222.20 by way of an irrevocable and unconditional bank guarantee for the due performance and observance of the contract and this was provided via a Maybank bank guarantee in the sum of RM40,416,511.11.

[9] The project commenced in April 2013. By a notice, dated 15 November 2016, Maybank appointed Duar Tuan Kiat of Messrs Ernst & Young as the Receiver and Manager (R & M) of the 1st respondent.

[10] Pursuant to the notice to appoint the R&M, on 25 November 2016, the appellant gave notice to terminate the contract pursuant to cl 51.2 of the contract and gave notice to demand payment of the sum of RM40,416,511.11 under the bank guarantee.

[11] On 30 November 2016, the respondents filed an Originating Summons (OS No: 24NCvC-349-11-2016) in the High Court, Kuantan (the Kuantan Suit) against the appellant for unlawful termination of the contract and for an injunction to restrain the appellant from effecting the demand for payment under the bank guarantee. On the same day, the respondents filed and obtained an ex parte injunction restraining the appellant and Maybank from eff