JUDGMENT

Hashim Yeop Sani CJ (Malaya):

On 10 December 1987 Morgan Guaranty Trust Company of New York (the petitioner) presented a petition to have Lian Seng Properties Sdn. Bhd. (the company) wound up. It was not disputed that the company had taken a loan of RM30 million from the American International Assurance Co. Ltd. (AIA) the repayment of which together with interests and costs was guaranteed by the petitioner. The guarantee agreement between the company and the petitioner inter alia provided that if the guarantor notified the company that AIA had required the guarantor to pay any part of the amount guaranteed, the company should forthwith on demand pay such amount to the guarantor notwithstanding that the sum called for might not have been properly due.

It was also not disputed that there were other lenders of the company. The company's debts were secured in several other ways. One such security was a piece of land in Kuala Lumpur on which the respondent was constructing offices and apartments for sale to the general public.

Some time in April 1987 the lenders combined by entering into an agreement with the company to share among themselves the proceeds from the sales of the