SYED IBRAHIM & CO 1. ) Trans Fame Offshore Sdn Bhd 2. ) Malaysia Marine And Heavy Engineering Sdn Bhd PENCELAH 1. ) BAP RESOURCES SDN BHD 2. ) PENGIRAN DATO AWANG DAUD BIN AWANG PUTRA PIHAK TERKILAN BEN LINE AGENCIES (MALAYSIA) SDN BHD

SYED IBRAHIM & CO 1. ) Trans Fame Offshore Sdn Bhd 2. ) Malaysia Marine And Heavy Engineering Sdn Bhd PENCELAH 1. ) BAP RESOURCES SDN BHD 2. ) PENGIRAN DATO AWANG DAUD BIN AWANG PUTRA PIHAK TERKILAN BEN LINE AGENCIES (MALAYSIA) SDN BHD

The bank guarantee and the monies paid by UOB under it are not proprietary assets of the company in judicial management; encashment of the guarantee by the beneficiary is not a step to enforce a security over the company's property within ss.410 or 411 of the Companies Act 2016. Consequently MMHE did not contravene the Companies Act and the prayers for refund were dismissed because restoration, if applicable, would restore UOB not the company.

Citation
WA-28JM-22-12/2021 (Mahkamah Tinggi)
Parties
Applicant (law Firm Applying): SYED IBRAHIM & CO; First Respondent (company Under Judicial Management): TRANS FAME OFFSHORE SDN BHD (DI BAWAH PENGURUSAN KEHAKIMAN); Second Respondent (beneficiary of Bank Guarantee): MALAYSIA MARINE AND HEAVY ENGINEERING SDN BHD; Intervener: BAP RESOURCES SDN BHD; Intervener: PENGIRAN DATO’ AWANG DAUD BIN AWANG PUTRA
Court
High Court
Jurisdiction
Malaysia
Judgment Date
16 February 2023
Case Number
WA-28JM-22-12/2021 (Mahkamah Tinggi)
Procedural Posture
Originating Summons (judicial Management) / Judgment on Enclosure 59 (grounds of Judgment)
Outcome
Prayers 1 and 2 (adding MMHE as respondent and amending title) allowed by consent; prayers 3 and 4 (declaration of contravention and order to refund RM5,150,000) dismissed; Enclosure 59 dismissed with costs.
Legal Topics
Judicial Management, Enforcement of Bank Guarantees, Proprietary Rights in Encashed Guarantees, Companies Act 2016 Ss.410, 411, 414
Source Language
Malay/English
Company Law Insolvency and Corporate Rescue Banking Law Judicial Management Enforcement of Bank Guarantees Proprietary Rights in Encashed Guarantees Companies Act 2016 Ss.410,411,414

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Parties

SYED IBRAHIM & CO

Applicant (law Firm Applying)

TRANS FAME OFFSHORE SDN BHD (DI BAWAH PENGURUSAN KEHAKIMAN)

First Respondent (company Under Judicial Management)

MALAYSIA MARINE AND HEAVY ENGINEERING SDN BHD

Second Respondent (beneficiary of Bank Guarantee)

BAP RESOURCES SDN BHD

Intervener

PENGIRAN DATO’ AWANG DAUD BIN AWANG PUTRA

Intervener

Procedural Posture

Originating Summons (judicial Management) / Judgment on Enclosure 59 (grounds of Judgment)

Legal Issues

  1. 1 Whether monies paid by UOB under the bank guarantee are property of the company in judicial management (TFO)
  2. 2 Whether MMHE's encashment of the bank guarantee amounted to enforcing a security over the company's property within ss.410 and 411 Companies Act 2016
  3. 3 Whether MMHE must refund RM5,150,000 to TFO

Ratio Decidendi

The bank guarantee and the monies paid by UOB under it are not proprietary assets of the company in judicial management; encashment of the guarantee by the beneficiary is not a step to enforce a security over the company's property within ss.410 or 411 of the Companies Act 2016. Consequently MMHE did not contravene the Companies Act and the prayers for refund were dismissed because restoration, if applicable, would restore UOB not the company.

Court Disposition

Prayers 1 and 2 (adding MMHE as respondent and amending title) allowed by consent; prayers 3 and 4 (declaration of contravention and order to refund RM5,150,000) dismissed; Enclosure 59 dismissed with costs.

Orders

  • MMHE to be added as a respondent and the originating summons title amended (prayers 1 and 2 allowed by consent)
  • Prayers 3 and 4 in Enclosure 59 dismissed (no declaration of contravention under ss.410, 411, 414; no order to refund RM5,150,000)