PAN NORTHERN AIR SERVICES SDN. BHD. MAYBANK ISLAMIC BERHAD

PAN NORTHERN AIR SERVICES SDN. BHD. MAYBANK ISLAMIC BERHAD

The court held that the Asset Sale Agreements expressly fixed Ta’widh at 1% per annum calculated on the balance sale price for defaults paid before maturity; the Bank could not unilaterally impose a higher IIMM/'r' rate absent contractual notice or an enabling contractual provision; the Borrower’s payment was expressly made WITHOUT PREJUDICE and subject to reservation of rights so it did not bar a later claim; limitation did not bar the claim because payment and reserved rights, moratorium and discovery/mistake principles postponed accrual; consequently the Bank was ordered to refund the excess Ta’widh and the Bank’s counterclaim regarding the RM1,000,000 discount was consequentially...

Citation
W-02(MUA)(W)-2512-12/2018 (Mahkamah Rayuan)
Parties
Appellant / Borrower: Pan Northern Air Services Sdn. Bhd.; Respondent / Bank: Maybank Islamic Berhad
Court
MUA
Jurisdiction
Malaysia
Judgment Date
19 November 2020
Case Number
W-02(MUA)(W)-2512-12/2018 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Court of Appeal Decision
Outcome
Appellant's appeal allowed in part; High Court decision set aside in relevant respects; Bank ordered to refund excess Ta’widh; Bank's counterclaim on RM1,000,000 discount consequentially allowed
Legal Topics
Ta’widh (late Payment Compensation), BNM Guidelines and LPC Guidelines 2012, Shariah Advisory Council Reference, Accord and Satisfaction, Limitation and Postponement (moratorium), Calculation and Refund of Overcharged Sums
Source Language
Malay/English
Islamic Banking Contract Law Banking Regulation Shariah Law Civil Procedure Limitation Law Ta’widh (late Payment Compensation) BNM Guidelines and LPC Guidelines 2012 +4 more

Case Brief

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Parties

Pan Northern Air Services Sdn. Bhd.

Appellant / Borrower

Maybank Islamic Berhad

Respondent / Bank

Procedural Posture

Civil Appeal / Court of Appeal Decision

Legal Issues

  1. 1 What Ta’widh rate is chargeable for defaults paid before maturity under BBA asset sale agreements
  2. 2 Whether the civil court must refer disputed Shariah issues to the Shariah Advisory Council or may apply existing SAC/BNM rulings
  3. 3 Whether the payment of the settlement sum constituted an accord and satisfaction barring later challenge

Ratio Decidendi

The court held that the Asset Sale Agreements expressly fixed Ta’widh at 1% per annum calculated on the balance sale price for defaults paid before maturity; the Bank could not unilaterally impose a higher IIMM/'r' rate absent contractual notice or an enabling contractual provision; the Borrower’s payment was expressly made WITHOUT PREJUDICE and subject to reservation of rights so it did not bar a later claim; limitation did not bar the claim because payment and reserved rights, moratorium and discovery/mistake principles postponed accrual; consequently the Bank was ordered to refund the excess Ta’widh and the Bank’s counterclaim regarding the RM1,000,000 discount was consequentially...

Court Disposition

Appellant's appeal allowed in part; High Court decision set aside in relevant respects; Bank ordered to refund excess Ta’widh; Bank's counterclaim on RM1,000,000 discount consequentially allowed

Orders

  • Set aside relevant parts of the High Court judgment
  • Order Maybank Islamic Berhad to pay Pan Northern Air Services Sdn. Bhd. RM5,005,285.79 as refund of excess Ta’widh