JUDGMENT

Sulong Matjeraie J:

Ruling

[1] The defendant was a holder of a Special Timber Licence No. SK7/90 ('the said licence') issued by the Sabah Forestry Department for and on behalf of the State Government to fell, convert and extract timber from within a timber concession area of approximately 258,584 hectares of timber land situated in the districts of Sipitang, Beaufort and Tenom in the State of Sabah ('the said area'). The said licence was for a period of five years expiring on 15 October 1995.

[2] The plaintiff was the contractor to fell and to purchase the extracted timber from the said area.

[3] Two agreements for the extraction and purchasing of timber were signed between the plaintiff and defendant. One was dated 28 June 1993 ('the first agreement') and the second agreement was dated 13 August 1993 ('the second agreement'). Where appropriate the first agreement and the second agreement shall jointly be referred to as 'the first and second agreements'.

[4] The first agreement allows the plaintiff to extract commercial timber logs from 2,825 hectares of the said area and to purchase commercial timber logs therefrom while the second agreement permits the plaintiff to extra