KNM PROCESS SYSTEMS SDN BHD CYPARK SDN BHD

KNM PROCESS SYSTEMS SDN BHD CYPARK SDN BHD

The Court of Appeal dismissed all four appeals and upheld the High Court: (1) s.11 Arbitration Act 2005 permits the High Court to grant interim measures (including injunctions) to preserve status quo pending arbitration but not to grant final declaratory relief or damages; (2) the High Court did not err in finding a seriously arguable case of unconscionability sufficient to grant interlocutory injunctions restraining calls on the two bank guarantees; (3) non‑joinder of Hitachi was not fatal under the Rules of Court; and (4) the High Court validly imposed conditions requiring extension of the BGs’ validity to protect the defendant’s interests and refusal to stay those conditions absent...

Citation
B-02(C)(A)-579-04/2020 (Mahkamah Rayuan)
Parties
Plaintiff: KNM Process Systems Sdn. Bhd.; Defendant: Cypark Sdn. Bhd.
Court
C
Jurisdiction
Malaysia
Judgment Date
15 October 2021
Case Number
B-02(C)(A)-579-04/2020 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (interlocutory/arbitration Related) / Court of Appeal Judgment
Outcome
All four appeals dismissed; High Court orders (as varied) upheld; parties to bear their own costs.
Legal Topics
Interim Measures Under Arbitration Act 2005 S.11, On Demand Bank Guarantees, Unconscionability, Fraud Exception to Calls, Non Joinder, Conditions to Injunctions, Stay of Execution
Source Language
Malay/English
Arbitration Bank Guarantees Contract Law Civil Procedure Injunctions Interim Measures Under Arbitration Act 2005 S.11 On Demand Bank Guarantees Unconscionability +4 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 10 Party arguments 2 Amounts and remedies 9
Sign in to unlock

Parties

KNM Process Systems Sdn. Bhd.

Plaintiff

Cypark Sdn. Bhd.

Defendant

Procedural Posture

Civil Appeal (interlocutory/arbitration Related) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether High Court can order declarations/damages under s.11 Arbitration Act 2005
  2. 2 Whether plaintiff could sue without joining consortium co-member Hitachi Zosen as co-plaintiff
  3. 3 Whether High Court may grant injunctions restraining calls on on‑demand bank guarantees pending arbitration

Ratio Decidendi

The Court of Appeal dismissed all four appeals and upheld the High Court: (1) s.11 Arbitration Act 2005 permits the High Court to grant interim measures (including injunctions) to preserve status quo pending arbitration but not to grant final declaratory relief or damages; (2) the High Court did not err in finding a seriously arguable case of unconscionability sufficient to grant interlocutory injunctions restraining calls on the two bank guarantees; (3) non‑joinder of Hitachi was not fatal under the Rules of Court; and (4) the High Court validly imposed conditions requiring extension of the BGs’ validity to protect the defendant’s interests and refusal to stay those conditions absent...

Court Disposition

All four appeals dismissed; High Court orders (as varied) upheld; parties to bear their own costs.

Orders

  • Dismiss Appeal Nos. B-02(C)(A)-551-03/2020, B-02(IM)(C)-552-03/2020, B-02(C)(A)-579-04/2020 and B-02(C)(A)-581-04/2020
  • Uphold High Court orders dated 23.03.2020 and 28.03.2020 as varied (interim injunctions restraining calls/receipt of proceeds on Performance Bank Guarantee No. 06702153310001 and Advance Payment Bank Guarantee No. 07101IGK1601144 pending final arbitral award, subject to conditions)