ISMAIL BIN OTHMAN 1. ) DUTA SKYLINE SDN. BHD. 2. ) AMAZING SYMPHONY SDN BHD

ISMAIL BIN OTHMAN 1. ) DUTA SKYLINE SDN. BHD. 2. ) AMAZING SYMPHONY SDN BHD

The Share Sale Agreement (clause 11.2) vested the plaintiff with a contractual protective right over the land such that the 1st Defendant could not create encumbrances without the plaintiff's prior written consent; the JVA and attendant power of attorney were executed without that consent and without required shareholder approvals under s.223 Companies Act 2016, rendering the JVA void and unenforceable; the plaintiff therefore had standing to seek declaratory and injunctive relief and the interlocutory injunction should be maintained; striking out was inappropriate as the claim was not plainly unsustainable.

Citation
BA-24NCC-122-08/2019 (Mahkamah Tinggi)
Parties
Plaintiff: Ismail bin Othman; 1st Defendant: Duta Skyline Sdn Bhd; 2nd Defendant: Amazing Symphony Sdn Bhd
Court
High Court
Jurisdiction
Malaysia
Judgment Date
27 May 2022
Case Number
BA-24NCC-122-08/2019 (Mahkamah Tinggi)
Procedural Posture
Originating Summons for Declaratory Relief and Interlocutory Injunction; Issues Under Companies Act 2016 S.223 and Specific Relief Act / Judgment on Applications: Originating Summons and Interlocutory Injunction Allowed; Striking Out Applications Dismissed
Outcome
Enclosure 1 (originating summons) and Enclosure 3 (interlocutory injunction) allowed; Enclosures 13 and 18 (striking out applications) dismissed
Legal Topics
Joint Venture Agreement, Share Sale Agreement, Section 223 Companies Act 2016, Interlocutory Injunction, Power of Attorney, Striking Out Under O18 R19 ROC 2012
Source Language
Malay/English
Contract Company Law Civil Procedure Equity Specific Relief Joint Venture Agreement Share Sale Agreement Section 223 Companies Act 2016 +3 more

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Parties

Ismail bin Othman

Plaintiff

Duta Skyline Sdn Bhd

1st Defendant

Amazing Symphony Sdn Bhd

2nd Defendant

Procedural Posture

Originating Summons for Declaratory Relief and Interlocutory Injunction; Issues Under Companies Act 2016 S.223 and Specific Relief Act / Judgment on Applications: Originating Summons and Interlocutory Injunction Allowed; Striking Out Applications Dismissed

Legal Issues

  1. 1 Whether the Joint Venture Agreement and Power of Attorney were valid or void for breach of the Share Sale Agreement (clause 11.2)
  2. 2 Whether plaintiff (director but not registered member) had locus to invoke s.223 Companies Act 2016 and to seek declaratory relief
  3. 3 Whether directors entered into arrangement without shareholders' approval contrary to s.223 CA 2016

Ratio Decidendi

The Share Sale Agreement (clause 11.2) vested the plaintiff with a contractual protective right over the land such that the 1st Defendant could not create encumbrances without the plaintiff's prior written consent; the JVA and attendant power of attorney were executed without that consent and without required shareholder approvals under s.223 Companies Act 2016, rendering the JVA void and unenforceable; the plaintiff therefore had standing to seek declaratory and injunctive relief and the interlocutory injunction should be maintained; striking out was inappropriate as the claim was not plainly unsustainable.

Court Disposition

Enclosure 1 (originating summons) and Enclosure 3 (interlocutory injunction) allowed; Enclosures 13 and 18 (striking out applications) dismissed

Orders

  • Declaration that the Joint Venture Agreement dated 22 April 2019 is null and void ab initio and of no effect
  • Consequential order that the Power of Attorney granted pursuant to the JVA be revoked/cancelled