PETROCHEMICAL COMMERCIAL COMPANY INTERNATIONAL LTD & 2 ORS NEXUS MANAGEMENT GROUP SDN BHD & 21 ORS

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) SUIT NO.: WA-22NCC-601-12/2018 BETWEEN PETROCHEMICAL COMMERCIAL COMPANY INTERNATIONAL LTD (Company No.: LL08544) PCCI LTD (Company No.: LL08544) NAVAK ASIA KISH TRADING CO. (PJS) (Company No.: LL08544) AND NEXUS MANAGEMENT GROUP SDN BHD [Company No.: 671382-X] ASIAN TRADE INVESTMENT BANK LTD [Company No.: LL07211] MEHDI EBRAHIMIESHRATABADI [Passport No.: 195755889] MOHAMMAD REZA SHAHBAKHSH [Passport No.: H35211513] ..-PLAINTIFFS 10. 11. 12. 13. 14. MALEKSABET EBRAHIMI [Passport No.: K2540416] OMID LTD [Company No.: LL09574] 5M INVESTMENT HOLDING LTD [Company No.: LL10223] ATIB LTD [Company No.: LL11257] KHADIJEH TAGHAVI SABZEVARI [Passport No.: X96502827] MOHAMMAD EBRAHIMIESHRATABADI [Passport No.: U12994206] DATO MOHAMMED AB HALIM BIN AB RAHMAN [Identity Card No.: 510604035213] MEHRANEH EBRAHIMI ESHRATABAD! [Passport No.: Y28300425] AMIR KARGAR NEGHAB [Passport No.: J28779000] ALI VASHAEE [Passport No.: E96090487] 15. 16. 17. 18. 19. 20. 21. 22. SM CAPITAL INVESTMENT PTY LTD (Company No.: 612288632] 5M CAPITAL INVESTMENT PTY LTD [Company No.: 2517721] EBM CORPORATION [Company No.: LU11531] GLOBAL NEWMAN PTY LTD [Company No.: 615206454] HORIZON INVESTMENT HOLDING LTD [Company No.: LL09368] MPO LTD [Company No.: LL12023} NATURELAB AESTHETIC & WELLNCESS CENTRE SDN BHD [Company No.: 877867-W] UNITRADE CAPITAL SOLUTIONJ SDN BHD [Company No.: 1131835-X) GROUNDS OF JUDGMENT ...DEFENDANTS Introduction [1] [2] Vide enclosure 208, the Plaintiffs applied to amend the Writ and Statement of Claim dated 31.12.2018 pursuant to O. 15 rr. 6 and 8 and/or 0.20 r. 5 of the Rules of Court 2012 and/or the inherent jurisdiction of the court. This court allowed the application. The 9 40%, 12% 43% and 14 Defendants (“the Canadian Defendants’), being dissatisfied, appealed against the decision of this court. The following are the Grounds of Decision of this court. Background facts [3] [4] [5] [6] This suit was filed against the Defendants premised on purported fraud and conspiracy which resulted in loss to the Plaintiffs. Following the commencement of the present suit, the Plaintiffs had obtained various discovery orders made against banks in Malaysia, Australia, Singapore and Canada as part of the process of tracing the Plaintiffs’ purportedly misappropriated funds. As a result of the said discovery orders, the Plaintiffs discovered further information and transactions relating to their misappropriated funds which were not within the Plaintiffs’ knowledge as at the time of filing of the present suit. - The newly discovered information and transactions include the following: (d) (g) (h) The majority of the Plaintiffs' misappropriated funds, almost in the sum of USD 60 million was transferred by the 1st Defendant to accounts at Forex Capital Markets Limited ("FXCM") in London, United Kingdom; Over USD 56 million was subsequently transferred from the 4st Defendant's account in FXCM to the 1st Defendant's accounts in Australia, which was then laundered through the 7* and 15 Defendants’ accounts in Australia; Further sums were laundered using the 3rd, 5", 9" and 17" Defendants’ accounts in Australia; Further money laundering took place using the 3" and the 5" Defendants' accounts in Singapore; Further details were obtained in respect of the roles played by the 6% gnd 8 Defendants’ accounts in the said money laundering; Greater light has been shed in so far as the 11" Defendant's role in this matter is concerned; The Plaintiffs’ misappropriated funds were then laundered further in Canada to the 3%, 5! gih. oth. 44th 42th 43% 441 and 16 Defendants’ benefit; Further money laundering took place via accounts at Al Rajhi Bank in Malaysia in the names of the 3% and 7" Defendants; 5 [7] [8] (i) The money laundering and concealment of the Plaintiffs' funds included numerous transactions in breach of the Freezing Injunction granted by this Honourable Court ex-parfe on 03.01.2019; (j) The laundering included the transfer of substantial sums to Germany, Portugal and Iran; (k) The details of the 17" to 22°4 Defendants’ receipt and laundering of the Plaintiffs’ misappropriated funds were obtained; and (1) The details of real property and shares acquired by the Defendants using the proceeds of the Plaintiffs’ misappropriated funds were also obtained. The amendments sought to be introduced by the Plaintiffs are primarily elaborate details of specific monies being moved from one financial account to another. Earlier on 25.09.2019, this court granted leave to the Plaintiffs to amend the Writ to add eight (8) defendants, namely the 15" to 22" Defendants. The Plaintiffs explained that they had to make the proposed amendments at this stage due to the challenges they faced during the course of the proceedings. The Plaintiffs were not employing a strategy to amongst others, make selective disclosures. Instead, it was contended that it has been the Canadian Defendants’ obligation to make disclosures as it was ordered by this court. [9] [10] [11] [12] Further, it was argued that the Canadian Defendants have refused to give the Plaintiffs an account of what happened to purported misappropriated funds, despite the “prima facie evidence of fraud and their involvement in laundering substantial parts of the funds’. It was also contended that in many cases, the discovery obtained from banks has been of the Canadian Defendants’ own bank accounts, showing their further role in laundering huge sums. The Canadian Defendants have adopted a line of only giving disclosure of assets/accounts as and when they have been tracked down by the Plaintiffs. The Plaintiffs therefore had to obtain a series of discovery orders against banks in Malaysia, Singapore, Australia, Canada and Cyprus in order to trace their stolen funds, obtain Mareva injunctions and serve the injunctions on numerous banks in order to freeze proceeds of the fraud before the Defendants became aware that the Plaintiffs knew of the location of such proceeds and thus moved and/or further concealed such funds and assets. This required confidentiality at the time when the Plaintiffs applied for Norwich Pharmacal discovery orders against the banks, so that the Plaintiffs could first obtain the discovery, review it and take such steps as were necessary to apply for further discovery orders and/or freeze proceeds of fraud revealed by the discovery; thereafter, the discovery obtained has since been served on the Canadian Defendants. To this end, the Plaintiffs applied the English case of Omar and others v Omar and others [1995] 3 All ER 571, wherein 7 information discovered through discovery orders were allowed to be used to amend the pleadings. Despite this, it was contended that the Defendants have continued to conceal and launder the funds after 31.12.2018, including in breach of this Court's worldwide freezing injunction as set out in the Amended Statement of Claim. [13] Given the above background, the Plaintiffs argued that they were therefore entitled to make the amendment application. [14] In resisting the amendment application, the Canadian Defendants’ grounds of objection can be summarised as follows: (a) the proposed amendments are not bona fide; (b) the proposed amendments would in effect turn the Plaintiffs’ suit into a suit of inconsistent character; (c) the Plaintiffs sought to plead evidence; (d) the Plaintiffs delayed the filing of enclosure 208; (e) the Plaintiffs deliberately chosen not to disclose any evidence in relation the purported results from the discovery orders; and (f) the Plaintiffs had failed to put forward any evidence to substantiate the averments in relation to the purported nexus between the Proposed 15" to the 224 Defendants and the existing Defendants. [15] In addition to the above general objections, the Canadian Defendants also raised that the amendment was done with bad faith and was done by pleading post-Writ events. This according to the Canadian Defendants was calculated to “adversely and emotively colour the Defendants ahead of trial’. It was also contended that the 8 pleadings contained evidence rather than material facts and that if allowed, the amendments would “colour the neutrality of the judge well before the trial’ and this would expose the Canadian Defendants to prejudgment, prejudice and probably the truth. Analysis and findings of this court The applicable law [16] The application to amend was made under O. 20 r. 5 of the Rules of Court 2012, which reads: Order 20 - Amendments Rule 5. Amendment of writ or pleading with leave (1) @ubject to Order 15, rules 6, 6A, 7 and 8 and the fc-‘swing provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such a manner, if any, as it may direct. (2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of the issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so. (3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not 9 [17] [18] [19] misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued. (4) An amendment to alter the capacity in which a party sues (whether as plaintiff or as defendant by counterclaim) may be allowed under paragraph (2) if the capacity in which, if the amendment is made, the party will sue is one in which at the date of issue of the writ or the making of the counterclaim, as the case may be, he might have sued. (5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave fo make the amendment. Ultimately, the judge has a discretion to allow an application to ‘amend a pleading but such powers must &# exercised judicially. The two leading cases on the principles applicable to an application to amend pleadings are Yamaha Motor Co Ltd v. Yamaha (M) Sdn Bhd [1983] CLJ (Rep) 428 and Hong Leong Finance Berhad v. Low Thiam Hoe and Another Appeal [2015] 8 CLJ 7. In the Federal Court case of Yamaha Motor, Mohd Azmi FCJ in delivering the judgment held that the general principle is that the court will allow such amendments as will cause no injustice to the other parties. 10 [20] Three basic questions should be considered to determine whether injustice would or would not result: i. whether the application is bona fide; ii. whether prejudice caused to the other side can be compensated by costs; and iii. | whether the amendments would not in effect turn the suit from one character into a suit of another and inconsistent character. [21] After the introduction of the pre-trial case management regime under O. 34 of the Rules of Court 2012, the Federal Court in Hong Leong Finance outlined a new approach to be taken to prevent delay in the progress of a case to trial and for its completion, Zulkefli Ahmad Makinuddin FCJ provided the following parameters: (a) When dealing with an application to amend the pleadings which introduce a new case in the claim or defence on the eve of the trial, the principles in Yamaha Motor are not the sole considerations; (b) The principles in Yamaha Motor applies to cases where the application to amend the pleadings is made at an early siage of the proceedings; 11 (c) That there has to be a cogent and reasonable explanation in the applicant's affidavit as to why the application was filed late; (d) That the application to amend the pleadings is not a tactical manoeuvre; (e) That the proposed amendment must disclose full particulars for the court to ascertain if there is a real prospect of success in proving the same; and (f) Thatlateness in the application to amend the pleadings cannot necessarily be compensated by payment of costs. [22] The Federal Court in Hong Leong Finance in essence opined that on the issue of delay, the onus is on the applicant to furnish a reasonable explanation for such a delay and that the failure to do so would result in the application being disallowed. In addition, the application to amend a pleading will also be disallowed if it is made as a tactical manoeuvre. [23] In essence, this court is guided by the following principles: (a) Amendments can be made at any stage of the proceedings, although it is preferential to allow the same before trial; (b) The application must be made bona fide; (c) The prejudice caused to the other side, if any, should be compensable with costs; 12 (d) The amendments should not in effect turn the suit from one character into a suit of another and inconsistent character; (e) Amendments should be made for the purpose of determining the real controversy between the parties to any proceedings or of correcting any defect or error in any proceedings; and (f) Amendments may be allowed even if the effect of the same would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim. Decision of this court [24] [25] It must be mentioned up front that this court in considering this application, must be reminded that this application is made based on a case which involves a multi jurisdiction asset tracing exercise. With the worldwide freezing order, it was only to be expected that there will be evidence that would surface after the filing of the original pleadings. This court accepts the argument of the Plaintiffs that at the start of the commencement of a tracing claim, the Plaintiffs do not know the full details of what has happened to the money to be traced. 13 [26] [27] [28] [30] One of the purposes of the action is to trace and follow the funds and to identify new defendants who have received the proceeds of the fraud and/or assisted in the fraud and money laundering. As such, due consideration must be given to the peculiarity of this case as to apply the usual considerations when considering amendment of pleading maybe unfair to the Plaintiffs. The argument that the amendments contain post Writ events is not denied by the Plaintiffs. As mentioned above, the peculiarity of the facts pleaded and the background of the case merits this court to allow the post Writ facts to be included in the proposed amendments. It would be unfair to the Plaintiffs to deny the amendment simply because additional information was discovered only after the Writ was filed. The fundamental question is whether the amendments is pegged to the original cause of action. In the assessment of this court, the amendments do originate from the same cause of action. {t would grossly unfair to disallow the Plaintiffs to amend the pleadings as it would deprive them of pleading their case which may result in their case to be prematurely terminated (see Dato’ Tan Hen Chew v Tan Kim Hor and another appeal [2009] 5 MLJ 7903). The argument that the neutrality of this court would be coloured as a result of the amendment wholly unfounded. It would be overly simplistic to say that a Judge would be removed of its objectivity by merely what is pleaded. A trial is determined by the evaluation of evidence. The evidence must support the pleaded case of each 14 [31] party. Even if the pleadings contain facts that are so compelling, without the necessary evidence to back the pleaded case, it would mean nothing. Such a claim is an affront to the objectivity of the court and its ability to adjudicate judiciously. Be that as it may, this court is guided by principles in Yamaha Motor and Hong Leong Finance. These are the guiding principles that must be considered by any court in the exercise discretion whether to allow or to dismiss an application for amendment of pleadings. Bona fide [32] [33] It is the finding of this court that the proposed amendments sought by the Plaintiffs are bona fide given that they arise from the information and transactions that were discovered as a result of the various discovery orders. This information was not within the Plaintiffs’ knowledge at the time this suit was commenced. The principles outlined in the English case of Omar and others are applicable. It was a case where the plaintiff had applied to court seeking leave to use the information disclosed from discovery orders to amend their statement of claim in an existing tracing action. Jacob J held, allowing the application: “ Accordingly, | hold that the disclosed documents can be used to amend the pleadings in the existing tracing claim. | add that if there had not been a strong prima facie claim to trace (as | have held there is, otherwise | would not have made my first order against the bank) then the matter would have been different. If there was no material to found a statement of claim at all apart from the disclosed documents, 15 then it might truly be said that the use of the material was oppressive. Then it could be said that the obtaining of the disclosed documents was merely ‘fishing’, in the sense of seeking to discover a cause of action as opposed to supporting one, | do not think this case is remotely near ‘fishing’. The claim in the unamended writ is a tracing claim. It is also a claim in conversion, conversion of the bearer shares. The Plaintiffs want to use the disclosed documents to aid their inquiries as to the whereabouts of the shares and the identity of their present holders. It seems to me this is perfectly legitimate. in Wilden Pump and Engineering Co v Fusfeld [1985] FSR 581 it was held legitimate to use in a separate action against a third party documents disclosed on discovery in a main action where the separate action was solely for the purpose of obtaining information for the main action. The reason was that such use was within the implied undertaking not to use the documents disclosed save for the purpose of the main action. Since the main action here is for the ec.zversion and if possible the recovery of the bearer shares; and this was manifestly apparent when the Bankers Trust discovery was sought, | have no doubt that if the matter had been left to an implied undertaking, use of the documents would have been within the permission allowed by it. As it is there was an express undertaking. | think that that undertaking also permitted the use of the documents to pursue the conversion claim — not only was it already part of the action, it was an essential part of the tracing claim. If | were wrong about this | would grant leave. To save any doubt about the maiter | propose to grant an express order in the terms sought...” (Emphasis Added) 16 The amendment does not change the character of the suit [34] Itis the finding of this court the new facts arises has its origins from the same set of facts originally pleaded in the Statement of Claim. The amendments set out further details as to how the purportedly misappropriated funds were laundered through the international banking system and the involvement of the 15" to 224 Defendants. It is the finding of this court that such averments in the pleadings does turn the current suit into another of inconsistent character is both baseless and unfounded. The amendments are facts [35] Although at first blush there seems to be the introduction of evidence in the amendment, however, upon considering the facts and overall manner in which the case has been pleaded, it is the view of this court that the proposed amendments are not evidence but facts in support of the reliefs sought. Therefore, the proposed amendments do not offend O. 18 r. 7 of the Rules of Court 2012 in any manner. No delay [36] There is no delay. At the date of the application, trial dates have yet to be fixed and therefore, it does not suffer from any form of delay that could fall under the category outlined in Hong Leong Finance. V7 Costs [37] The prejudice caused to the other side, if any, is compensable by costs. Amendments allow court to determine the real controversy between the parties [38] The proposed amendments will enable the court to determine the real controversy between the parties, including between the Plaintiffs and the 15" to 22"4 Defendants. As mentioned previously, amendments may be allowed even if the effect of the same would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim. In the current application, there is no new cause of action. The original pleaded cause of action remains. In any event, these claims all arise out of the same facts. Conclusion [39] The court is not concerned with the merits of the Plaintiffs’ claim at this early stage of proceedings. The burden still remains on the Plaintiffs to prove what they pleaded. So long as this court is satisfied in the course of exercising its discretion that the amendments are within the parameters outlined under O. 20 r. 5 and the guidance in Yamaha Motor and Hong Leong Finance, the amendments should be allowed. 18 [40] The application in enclosure 208 is therefore allowed with no order as to costs. / 1+ (AHMAD FAIRUZ BIN ZAINOL ABIDIN) Judge High Court of Malaya Kuala Lumpur Dated: 20 November 2020 19 Counsels Aniz Ahmad Amiruddin together with him Shabana Amiruddin for 1° - 3 Plaintiffs Messrs Cecil Abraham & Partners Suite 12.01, Level 12, Menara 1MK No. 1, Jalan Kiara, Mont Kiara 50480 Kuala Lumpur Kee Mohd Tharig together with Mohd Hifdzi Hamzah for 2" - Defendants Messrs Hifdzi Salmiah Kee Hanisah & Co. B-1-3, Vista Alam No. 3, Presint 4.5, Section 14 Jalan Ikhtisas 14/1 40000 Shah Alam Selangor Ho Kok Yew together with Sharmaine Mok for 5" Defendant Messrs Ho Kok Yew D-2-2, Block D Pusat Komersil Parklane No, 21, Jalan SS7/26 Kelana Jaya 47301 Petaling Jaya Selangor Izzudin Zahidi for 11 Defendant Messrs Izral Partnership 2™4 Floor, Wisma Hamzah KH No. 1 Leboh Ampang 50100 Kuala Lumpur Gopal Sreenevasan together with S. Bhuvaneswary & Kenneth Hiew for 9%, 10%, 12%, 13% & 14% Defendants Messrs Daniel & Wong B3-3-16, Solaris Dutamas No. 1, Jalan Dutamas 1 50480, Kuala Lumpur 20 4th