PESTECH TECHNOLOGY SDN BHD 1. ) MAYBANK ISLAMIC BERHAD 2. ) SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD

PESTECH TECHNOLOGY SDN BHD 1. ) MAYBANK ISLAMIC BERHAD 2. ) SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD

Plaintiff failed to discharge the high threshold to establish fraud or unconscionability; the Performance Bond is an unconditional on‑demand bond and the demand was prima facie made in accordance with its terms (termination relied upon); the contested factual and contractual issues are suited to arbitration; therefore injunctive relief to restrain payment was refused and the applications dismissed with costs.

Citation
WA-24C-92-06/2023 (Mahkamah Tinggi)
Parties
Plaintiff: PESTECH SDN BHD; 1st Defendant: MAYBANK ISLAMIC BERHAD; 2nd Defendant: SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD
Court
High Court
Jurisdiction
Malaysia
Judgment Date
20 November 2023
Case Number
WA-24C-92-06/2023 (Mahkamah Tinggi)
Procedural Posture
Originating Summons (injunctive Relief Under Arbitration Act 2005) / Decision / Grounds of Judgment (inter Partes Hearing)
Outcome
Originating Summons dismissed
Legal Topics
Performance Bond, On Demand Guarantee, Interim Injunction, Unconscionability, Fraud Exception, Termination of Contract, Arbitration Vs Court Jurisdiction, Over Securitisation
Source Language
Malay/English
Arbitration Law Civil Procedure Contract Law Banking and Finance (guarantees) Performance Bond On Demand Guarantee Interim Injunction Unconscionability +4 more

Case Brief

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Parties

PESTECH SDN BHD

Plaintiff

MAYBANK ISLAMIC BERHAD

1st Defendant

SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD

2nd Defendant

Procedural Posture

Originating Summons (injunctive Relief Under Arbitration Act 2005) / Decision / Grounds of Judgment (inter Partes Hearing)

Legal Issues

  1. 1 Whether an injunction should restrain payment under an unconditional on-demand performance bond
  2. 2 Whether the beneficiary's demand on the bond was fraudulent or unconscionable
  3. 3 Whether the court should maintain status quo pending arbitration

Ratio Decidendi

Plaintiff failed to discharge the high threshold to establish fraud or unconscionability; the Performance Bond is an unconditional on‑demand bond and the demand was prima facie made in accordance with its terms (termination relied upon); the contested factual and contractual issues are suited to arbitration; therefore injunctive relief to restrain payment was refused and the applications dismissed with costs.

Court Disposition

Originating Summons dismissed

Orders

  • Applications in Enclosure 1 and Enclosure 2 for injunctions against 1st and 2nd Defendants dismissed with costs