PERAK INTEGRATED NETWORK SERVICES SDN BHD (Company No.: 522474-U) 1. URBAN DOMAIN SDN BHD (Company No.: 652499-P) (suing on behalf of PINS OSC & MAINTENANCE SERVICES SDN BHD vide derivative action) 2. PINS OSC & MAINTENANCE SERVICES SDN BHD

PERAK INTEGRATED NETWORK SERVICES SDN BHD (Company No.: 522474-U) 1. URBAN DOMAIN SDN BHD (Company No.: 652499-P) (suing on behalf of PINS OSC & MAINTENANCE SERVICES SDN BHD vide derivative action) 2. PINS OSC & MAINTENANCE SERVICES SDN BHD

The Court affirmed the High Court: clause 3.1 of the First Supplemental Management Agreement entitled the 1st Defendant to a 20% maintenance fee computed from 'Rental Proceeds' and 'Other Payments' (which expressly includes payments from other telecommunication providers), Priority Payments are to be deducted in calculation but non-payment did not operate as a condition precedent to forfeit the maintenance fee, and absent valid termination the 2nd Defendant could not unilaterally extinguish the 1st Defendant’s contractual entitlement and was limited to pursuing damages/account and inquiry.

Citation
W-02(NCC)(W)-2442-11/2013 (Mahkamah Rayuan)
Parties
Appellant: Perak Integrated Network Services Sdn Bhd; 1st Respondent: Urban Domain Sdn Bhd; 2nd Respondent: PINS OSC & Maintenance Services Sdn Bhd
Court
NCC
Jurisdiction
Malaysia
Judgment Date
10 August 2020
Case Number
W-02(NCC)(W)-2442-11/2013 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal From High Court (derivative Action) / Court of Appeal Judgment (appeal Dismissed)
Outcome
Appeal dismissed; High Court judgment affirmed
Legal Topics
Breach of Contract, Contract Interpretation, Priority Payments to Regulator (mcmc), Licence Compliance, Remedies: Account and Inquiry, Damages, Fundamental Breach and Election to Terminate
Source Language
Malay/English
Contract Company Law Derivative Action Telecommunications Regulation Breach of Contract Contract Interpretation Priority Payments to Regulator (mcmc) Licence Compliance +2 more

Case Brief

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Parties

Perak Integrated Network Services Sdn Bhd

Appellant

Urban Domain Sdn Bhd

1st Respondent

PINS OSC & Maintenance Services Sdn Bhd

2nd Respondent

Procedural Posture

Civil Appeal From High Court (derivative Action) / Court of Appeal Judgment (appeal Dismissed)

Legal Issues

  1. 1 Whether the 1st Defendant was entitled to a 20% maintenance fee under the Management Agreement and First Supplemental Management Agreement from payments by both the defined Operators (Group A) and other telecommunication providers (Group B)
  2. 2 Whether failure by the 1st Defendant to make Priority Payments to MCMC disentitled it to its maintenance fee (i.e. whether payment of Priority Payments was a condition precedent)
  3. 3 Whether the 2nd Defendant’s takeover of functions without formal termination amounted to termination or forfeiture of the 1st Defendant’s contractual rights

Ratio Decidendi

The Court affirmed the High Court: clause 3.1 of the First Supplemental Management Agreement entitled the 1st Defendant to a 20% maintenance fee computed from 'Rental Proceeds' and 'Other Payments' (which expressly includes payments from other telecommunication providers), Priority Payments are to be deducted in calculation but non-payment did not operate as a condition precedent to forfeit the maintenance fee, and absent valid termination the 2nd Defendant could not unilaterally extinguish the 1st Defendant’s contractual entitlement and was limited to pursuing damages/account and inquiry.

Court Disposition

Appeal dismissed; High Court judgment affirmed

Orders

  • Appeal dismissed with costs
  • High Court judgment dated 26 September 2013 affirmed in all material respects