1. ) ARMADA TPCE SDN BHD 2. ) WASI KHAN @ WASIYU ZAMA BIN ISRAR AHMAD SMALL MEDIUM ENTERPRISE DEVELOPMENT BANK MALAYSIA BERHAD

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA (COMMERCIAL DIVISION) SUIT NO: WA-22M-58-01/2020 Between Small Medium Enterprise Development Bank Malaysia Berhad [Company No.: 49572-H] ... Plaintiff And 1. Armada TPCE Sdn Bhd [Company No.: 826078-U] 2. Armada Holdings Sdn Bhd [Company No.: 1168024-T] 3. Suhairi Bin Abdul Ghani [NRIC No.: 671031-07-5185] 4. Wasi Khan @ Wasiyu Zama Bin Israr Ahmad [NRIC No.: 691216-71-5001] 5. Mohamed Za'Aba Bin Abbas [NRIC No.: 640321-08-6067] 6. Azrul Rizal Bin Ruslin [NRIC No.: 770413-14-5891] 7. Rosli Bin Abu Bakar [NRIC No.:680610-03-6185] 8. Khairil Anuar Bin Mustafa [NRIC No.: 700915-08-5039] ... Defendants 1 JUDGMENT [1] This judgment concerns the Plaintiff’s summary judgment application (encl. 149) against the 1st Defendant and the 4th Defendant arising from a writ action filed by the Plaintiff against the Defendants in this suit for recovery under Commodity Murabahah Revolving Financing-i facilities granted by the Plaintiff to the 1st Defendant and related guarantors. [2] At the hearing of this application I granted summary judgment for the Plaintiff. This judgment contains the full grounds for my decision. I refer to the 1st Defendant and the 4th Defendant, the relevant defendants in this application as “the Defendants”. Background Facts [3] At the request of the 1st Defendant, the Plaintiff granted the 1st Defendant and the 1st Defendant accepted a Commodity Murabahah Revolving Financing-i (CMRF-I) facility of RM10,000,000.00 (“the 1st Facility”), a Commodity Murabahah Revolving Financing-i (CMRF-I) facility of RM3,000,000.00 (“the 2nd Facility”) and Commodity Murabahah Revolving Financing-i (CMRF-I) facility of RM15,000,000.00 (“the 3rd Facility”). All 3 facilities are referred to together as “the Facilities”. The stated purpose of the Facilities in the relevant letter of offer was to “To finance working capital requirement for 2 preliminary work inclusive of manpower mobilization cost, renovation works, purchase/lease of computers, office equipment upgrading system and software in relation to the- contract of "Provision Of Facilities Improvement. Proposal (FJP). Engineering And Project interface Support Services For Petronas Carigali Sarawak Operations (SKO) And Peninsular Malaysia Operations (FMO)” Contract No. CBO/2013/SKO-B1E/OOG5 received from Petronas Carigali Sdn. Bhd. [4] The Facilities were documented by the following documents: a) Letter of Offer dated 24.4.2015; b) Asset Sale Agreement dated 2.6.2015; c) Letter of Changes 8.6.2015; d) Facility Agreement dated 9.6.2015; e) Letter of changes dated 29.11.2016; f) Letter of Offer dated 9.5.2017; g) Wakalah Agreement dated 30.5.2017; h) Murabahah Sale Contracts executed on 30.5.2017; 3 i) Facility Agreements dated 30.5.2017; j) Letter of Offer dated 1.6.2017; and k) Letter of Offer 20.6.2017. [5] As part of the security arrangement under the Facilities, the 2nd Defendant to 8th Defendant executed a Guarantee and Indemnity dated 30.5.2017 (“the Guarantee”) whereby in consideration of the Plaintiff inter alia granting or continuing to make available the Facilities to the 1st Defendant, jointly and severally guaranteed and agreed unconditionally and irrevocably to pay on demand all and any sums due and owing by the 1st Defendant to the Plaintiff on the financing facilities advanced by the Plaintiff including all commission, costs, charges and expenses including legal costs on a solicitor client basis. [6] Additonally the 1st Facility was secured by assignments and charges on the 1st Defendant’s project accounts and contract proceeds documented by the following: a) Specific Deed of Assignment of Contract Proceeds dated 9.6.2015; b) Charge over Project Account both dated 9.6.2015; c) Charge over Project Account dated 30.5.2017; 4 d) General Deed of Assignment of Contract Proceeds dated 30.5.2017; and e) General Deed of Assignment of Contract Proceeds dated 30.7.2017. [7] The 1st Defendant, according to the Plaintiff, defaulted by failing to pay the Plaintiff the amounts due for payment on the relevant due dates and the Plaintiff issued a letter dated 1.7.2019 to the 1st Defendant through the Plaintiff’s solicitor demanding for the sum owing. Despite the said demand, the 1st Defendant did not pay the amount owing to the Plaintiff, constituting an event of default under the Facilities. The Plaintiff then issued a letter dated 20.8.2019 through its solicitor to the 1st Defendant to give notice that the entire balance payable on the Facilities together with compensation (ta'widh), costs and charges was immediately due and owing and sought that the 1st Defendant within 14 days from the said letter make payment of RM10,077,259.47 as at 14.8.2019. By the said letter the Plaintiff also gave notice that the Facilities stood terminated and recalled. [8] The Plaintiff then issued a letter dated 20.8.2019 through its solicitors to the 3rd to 8th Defendants who stood as guarantors under the Guarantee demanding payment of all amounts outstanding due and owing under the Facilities. 5 [9] No payment was forthcoming from all the defendants in this action and the Plaintiff filed this action, claiming, together with with compensation for late payment (ta'widh), the following sums as prayed in the Re-Amended Statement of Claim: a) A sum of RM4,216,525.77 due and owing as at 31.12.2019 for the 1st Facility; b) A sum of 3,245,727.42 due and owing as at 31.12.2019 for the 2nd Facility; and c) A sum of RM466,847.30 due and owing as at 31.12.2019 for the 3rd Facility together with late payment charges (Ta’widh). [10] On 16.10.2020, the Plaintiff filed this application (encl. 149) to record judgment for the sum prayed for under the Reamended Statement of Claim above together with late payment charges (Ta’widh). Law on Summary Judgment (Order 14) [11] It is trite that once an application under O. 14 of the Rules of Court 2012 (“ROC”) is shown to have been correctly and properly filed, the burden shifts and thus rests on the defendant who desires to resist the application to raise a defence which shows a “bona fide triable issue”, in the 6 sense of an issue which justifies and warrants the matter to be considered at the trial proper. [12] Order 14 r. 3 of the ROC provides that unless the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that:- (a) there is an issue or question in dispute which ought to be tried or (b) there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against the Defendant on that claim or part as may be just having regard to the nature of the remedy or relied claimed. [13] It is useful to refer once again to the often quoted decision of the former Supreme Court in National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 MLJ 300 which ruled as follows: “We think it appropriate to remind ourselves once again that in every application under Order 14 the 1st considerations are (1) whether the case comes within the Order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under Order 14. For the purposes of an application under Order 14 the preliminary requirements are:- i. the defendant must have entered an appearance; 7 ii. defendant; and iii. the affidavit in support of the application must comply with the requirements of Rule 2 of the Order 14. ... If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him.” [14] The Plaintiff has satisfied these preliminary requirements, and this is not disputed by the Defendants. Thus the burden is now firmly on the Defendants to show that there is a triable issue that does not justify summary judgment to be entered against them. If the Defendants can demonstrate even one triable issue, this Court will not grant summary judgment. But it has to be a genuinely triable issue as would require a trial in order to determine it (see Voo Min En & Ors v. Leong Chung Fatt [1982] 2 MLJ 241). Issues [15] The Defendants raised a preliminary issue, submitting that the Plaintiff’s affidavits is hearsay evidence as the deponent of the affidavits was not involved in the transactions relating to the 1st Defendant. [16] The Defendants further submitted that there were triable issues as follows: 8 a) The sum of debt claimed by the Plaintiff is unproven; b) The contents of the Plaintiff’s affidavit in support do not clearly set out the cause of action against the 1st Defendant or against all the Defendants as a whole; c) There was a wrongful deposit of the sum of RM6,923,167.00 made by the 1st Defendant’s customer, Petronas SKO, into the 1st Defendant’s designate account which is a triable issue or is a reason for there be a trial of the Plaintiff’s claim; d) The terms relating to the trading of commodities in respect of the Facilities were not followed by the Plaintiff; and e) The Guarantee is unenforceable as the Plaintiff failed to conduct its part of the obligations in accordance the financing agreements executed by the 1st Defendant and the Plaintiff has not proved its claim against the 1st Defendant. Analysis and Findings Deponent’s Personal knowledge [17] It is submitted by the Plaintiff that the contents of the Plaintiff’s affidavits is hearsay evidence as Lee Kuan Vun, the deponent of the affidavits, was not involved in the 9 transactions relating to the 1st Defendant and does not have personal knowledge of matters that have transpired in relation to the 1st Defendant or any other Defendants named in this suit. Further to this, the Defendants submitted: a) The deponent has failed to provide any specific sources or grounds for the statement of information or belief relating to his assertions as required under O. 14 r. 2 ROC; and b) The Plaintiff has not produced the documents to support the facts asserted in the affidavits although the Defendants in their affidavits have questioned the validity and veracity of most of the facts deposed by Lee Kuan Vun. [18] I do not find any merit in this submission. [19] The position in law with regards belief relating to assertions in a plaintiff’s affidavits in an O. 14 application is for the deponent to state his belief that there is no defence to the claim and there is no requirement to say any more than that as decided in Fulcrum Capital Sdn Bhd v. Low Kon Yang [2003] 4 MLJ 509, HC. Abdul Aziz JCA stated the following: “In my opinion, since O 14 r 2(1) requires the affidavit to state only that in the deponent's belief there is no defence to the claim, there is no justification for asking the deponent to say more than that. The deponent must be presumed to have the statement 10 of defence in mind when he affirmed that in his belief there was no defence to the claim. He must be taken to be so affirming notwithstanding the statement of defence. As to explaining why he believes there is no defence notwithstanding the statement of defence, I do not think that the plaintiffs ought to bear the onus of showing that there is no defence. The onus is on the defendant to show by affidavit that there is a triable defence.” [20] In any event, the Plaintiff's deponent was the Head, Special Assets of the Plaintiff which is the division managing the Facilities availed to the 1st Defendant since April 2019 and he has access to accounts and relevant records on the Facilities thus possessing sufficient knowledge to depose matters stated in the Plaintiff’s affidavits. From the affidavit evidence, the 1st Defendant was, at all times, aware that the Facilities were managed by the Special Assets Department and cannot now raise any challenge to the same when the Defendants have previously dealt with the very same Special Assets Department without complaint. [21] I am also guided by CIMB Bank Berhad v. Mohd Shah Hashim [2011] 1 LNS 561 where it was held that it is illogical for someone from a bank to affirm an affidavit without authority or has no knowledge of the facts deposed in the affidavit. Challenge to the Certificate of Indebtedness [22] It is submitted by the Defendants that despite the Certificate of Indebtedness produced by the Plaintiff in exh. “SME-10”, the sum of debt claimed by the Plaintiff is unproven and this 11 suit should be set down for trial. The Defendants’ submissions and contention in relation to this position is as follows: a) In the Defendants’ affidavits, they questioned and challenged the facts asserted by the Plaintiff in regard to the calculation of the debt claimed and challenged the Plaintiff to produce documentary proof in the form of statements of accounts as averred in para. 14 of encl. 47 para.s 10 and 13.4 of encl. 75 and para. 13.5 of encl. 88. b) Apart from the Certificate of Indebtedness to establish the Defendants’ debt, the Plaintiff has failed to produce any accounts documents to prove the debt claimed by the Plaintiff when challenged. c) The Certificate of Indebtedness is not valid as: i) Exhibit “SME-10” was exhibited to amend the certificate to state that the loan facility was “Pembiayaan-i Komoditi Berputar Murabahah (CMRF-i)-I RM15,000,000.00 and not “Pembiayaan-i Terma Bai’lnah RM440,000.00” only after objections were raised by the Defendants in their affidavits to oppose encl. 23, the earlier notice of application filed by the Plaintiff which was later amended and filed as enc. 149; 12 ii) Exhibit “SME-10” was not prepared with earnestness or with conscientiousness for it to be accepted as accurate or true as the Certificate of Indebtedness carries the heading “TO BE ISSUED ON BANK’S LETTERHEAD” indicating that most likely it was prepared by a third party and that Lee Kuan Vun did not give thought to the contents of said exh. “SME- 10”; iii) Exhibit “SME-10” does not contain the Interbank Islamic Money Market (IIMM) Rate for the calculation of the Compensation; and iv) Exhibit “SME-10” is undated. [23] To appreciate the submissions of the Defendants, the Certificate of Indebtedness exhibited in encl. 24 as exh. “SME-4” is reproduced below: (This space is intentionally left blank) 13 14 [24] The Certificate of Indebtedness exhibited in encl. 69 as exh. “SME-10” is reproduced below: 15 16 [25] In encl. 149, the amended notice of application, prayer A(v) shows the amendment to the earlier prayer A(v) in enc 23: 17 [26] I do not accept the Defendants’ submissions on this point. [27] The Defendants merely challenged the calculation of the debt claimed and challenged the Plaintiff to produce documentary proof of the Defendants’ indebtedness without proving any manifest error on the Plaintiff’s Certificate of Indebtedness. Pursuant to Section W Schedule 2 Standard Terms and Conditions to the Letter of Offer dated 9.5.2017, sections 16.2(a) and 16.2(b) of the Facility Agreement dated 9.6.2015, sections 16.2(a) and 16.2(b) of the Facility Agreement dated 3.5.2017 and cl. 12 and cl. 17 of the Guarantee, the Defendants have agreed that a certificate or statement of account of the Plaintiff showing the indebtedness of the Defendants certified or signed by the Plaintiff’s authorised officer shall be binding and conclusive against the Defendants. The Plaintiff’s Certificate of Indebtedness operates as a conclusive proof of evidence of indebtedness unless the Defendants can show a manifest error on the face of the Certificate of Indebtedness: Cempaka Finance Berhad v. Ho Lai Ying (Trading as KH Trading) & Anor (2006) 2 MLJ 685. Here, the Defendants 18 have failed to discharge their burden to establish manifest error on the calculations of the outstanding sum set out in the Certificate of Indebtedness. The Certificate of Indebtedness binds the Defendants and is conclusive evidence of the debt due and owing by the Defendants to the Plaintiff as claimed by the Plaintiff. [28] I am satisfied that the Certificate of Indebtedness in exh. “SME-10” of encl. 69, relied on by the Plaintiff was an amendment to correct the typographical error in exh. “SME- 4” of encl. 24 to properly set out the amount due on the 3rd Facility of RM15,000,000,00. Exhibit “SME-10” is identical to the Certificate of Indebtedness in exh. “SME-4” save that the RM466,847.30 due as at 31.12.2019 is confirmed as due on the 3rd Facility of RM15,000,000.00 instead of the Bai Inah Term-i Financing stated earlier in error. [29] The words “TO BE ISSUED ON BANK'S LETTERHEAD” do not detract from the conclusivity of the Certificate of Indebtedness. The deponent of encl. 69 has confirmed that exh. “SME-10” is issued to correct a typographical error in exh. “SME-4” and is intended to serve as a certificate of indebtedness. The contents of exh. “SME-10” all confirm the indebtedness of the Defendants without any doubt as to its purpose. As for exh. “SME-10” being undated, what matters is the amounts stated by the Plaintiff to be what was outstanding as at 31.12.2019, the same date as at which the same amounts are outstanding as pleaded in the Amended Statement of Claim. 19 [30] As for exh. “SME-10” not containing the Interbank Islamic Money Market (IIMM) Rate for the calculation of the Compensation, this was already exhibited within exh. “SME- 4”. I agree with the Plaintiff that there is no need for this to be exhibited again. Further the conclusive evidence clauses do not require this to be exhibited and the Defendants have never challenged the Bank Negara Malaysia Money Market Rate in their affidavits. Wrong payments by Petronas SKO [31] Relying on Mills v. Bull [1968] 3 All ER 623 and O. 14 r. 3(1) ROC, it is submitted by the Defendants that there was a wrongful deposit of the sum of RM6,923,167.00 made into the 1st Defendant’s designate account which is a triable issue or is a reason for there be a trial of the Plaintiff’s claim which necessitates this matter to be set down for trial. The Defendants’ further submissions and contentions relating to this are as follows: a) The 1st Defendant’s client Petronas SKO informed the 1st Defendant that a total sum of RM6,923,167.00 was wrongly deposited into the 1st Defendant’s designate account with the Plaintiff. b) Neither the 1st Defendant nor the Plaintiff has any proprietary rights over this sum of RM6,923,167.00. 20 c) The 1st Defendant through its letter dated 3.3.2020 informed the Plaintiff regarding the payment that was wrongfully made to the 1st Defendant’s designate account which was brushed aside by the Plaintiff and the sum of RM6,923,167.00 is still retained by the Plaintiff. [32] The letter dated 3.3.2020 is reproduced below: (This space is intentionally left blank) 21 [33] I find that there is no merit to this submission. 22 [34] If there were merits to the assertions by the 1st Defendant in the letter dated 3.3.2020, Petronas SKO would have made a claim for refund, which was not shown by the Defendants. [35] Contractually, the Plaintiff is entitled to consolidate, debit and set-off any advance made on behalf of the Customer (the 1st Defendant) against all available balance in the Customer's accounts including current account, investment account or other accounts towards the settlement of any banking Facility granted by the Plaintiff pursuant to: a) Section GG Schedule 2 Standard Terms and Conditions to the Letter of Offer dated 9.5.2017 (superceding the previous Schedule 2 to the Letter of Offer dated 24.4.2015); b) Section 16.16 of the Facility Agreement dated 9.6.2015; c) Section 16.16 of the Facility Agreement dated 30.5.2017; d) Section 12.14 of the Charge over Project Account dated 9.6.2015; and e) Section 12.14 of the Charge over Project Account dated 30.5.2017. 23 [36] By the Specific Deed of Assignment of Contract Proceeds dated 9.6.2015 and General Deed of Assignment of Contract Proceeds dated 30.5.2017, the 1st Defendant agreed that any Proceeds in the 1st Defendant's Project Account shall be prioritised towards payment of all moneys which are due and owing to the Plaintiff and all other indebtedness of the 1st Defendant owing and payable to the Plaintiff before payment of surplus (if any) to the 1st Defendant or any other person. This was provided in: a) Section 16 (1) of the Specific Deed of Assignment of Contract Proceeds dated 9.6.2015; and b) Section 16 (1) General Deed of Assignment of Contract Proceeds dated 30.5.2017. [37] The 1st Defendant’s default under the Facility Agreements came about because there were insufficient funds to meet payment on the financings under the Facilities even after the alleged wrongful payments by Petronas SKO into the designated account. The Defendants have not shown to the Court how the liability of the 1st Defendant under the Facilities would be affected should the matter go to trial and the circumstances of the alleged overpayment by Petronas SKO be confirmed. 24 Vague cause of action [38] The Defendants submitted that the contents of the Plaintiff’s affidavit in support do not clearly set out the cause of action against the 1st Defendant or against all the Defendants as a whole. The Defendants contended that the Plaintiff merely bundled up the documents which were executed by the 1st Defendant as exhibits and then proceeded to make various allegations without specifying precisely the nature of the breach alleged against the 1st Defendant and other Defendants. [39] In furtherance to this submission the Defendants made other contentions: a) The Plaintiff had knowledge that there are at present payments which are due from 1st Defendant’s projects which are still unpaid by the 1st Defendant’s clients into the 1st Defendant’s designate account with the Plaintiff; b) Payments made wrongly by Petronas SKO; c) There was inaccurate calculation of the outstanding debt in the 1st Defendant’s account due to “Variation Orders” together with “Purchase Orders” not taken into account by the Plaintiff; 25 d) The Plaintiff was satisfied with how the 1st Defendant’s projects were managed leading to yearly “Letters of Annual Review” which increased the financing; and e) Monies received by the Plaintiff directly from the 1st Defendant’s clients were not utilized by the Plaintiff to settle the financing in an orderly fashion. [40] I do not accept that the Defendants have raised any triable issue on this point. [41] The pleaded cause of action against the Defendants which is based on the breach of the terms of the Facilities and the Guarantee is clearly set out in the cause papers filed by the Plaintiff. The cause of action is founded on the failure of the 1st Defendant and its guarantors (including the 4th Defendant) in meeting the repayment for total outstanding due and owing under the Facilities of RM15,000,000.00, RM10,00,000.00 and RM3,000,000.00 availed to the 1st Defendant. [42] When the Defendants were alerted of the insufficient payments received into the Project Account, the Defendants did not at any time contemporaneous to the Facilities and failure to pay arrears installments suggest irregular administration of the Project Account. I agree with the Plaintiff that in any event, discrepancies of the Purchase Orders, Debit Notes and Variation Orders are matters as 26 between the 1st Defendant and its client and also with regards the alleged mistaken payment by Petronas SKO (which I had addressed above) is immaterial to the instant proceeding between the Plaintiff and the Defendants. [43] The Plaintiff further submitted, and I agree, that the earlier favourable review of the financings at the 1st Defendant's request, subject to the terms and conditions of the Facilities, does not operate to prohibit the Plaintiff from recovering the outstanding sum from the Defendants, nor do previous payments made by the 1st Defendant and/or its client into the Project Account allow continuous default and breach by the Defendants. No trading of commodities [44] The Defendants submitted that the Plaintiff has no basis to make the present claim in this suit based on the documents exhibited at exh. “SME-1” (letters of offer, letters of changes and Facility Agreements) in the Plaintiff’s affidavit in support as the terms contained in the documents were not followed by the Plaintiff. In relation to this, Defendants submitted and contended as follows: a) The 1st Defendant never traded at the Bursa Sua Al Sila (BSAS) although the Plaintiff contended that the documents are intended for financing of revolving trading of commodities which are bought and sold at the BSAS. 27 b) Further documents in the Plaintiff’s affidavit in reply (encl. 69) do not show the trading of commodities but show or raised different causes of action which supports the Defendants’ assertion that the Plaintiff’s cause of action is vague. [45] From an examination of the affidavits filed by the Defendants, the following were also averred in relation to the Defendants’ submissions: a) The 1st Defendant was never involved in any trading transaction at BSAS and the Plaintiff has no basis to make a claim now in relation to the documents exhibited in exh. “SME-1” [para. 7 and para. 9(b) of encl. 47; para. 9.3 of encl. 75]; b) The Plaintiff is not entitled to enforce the terms of the Facilities as this was not managed for the purpose of financing the sale and purchase of commodities at BSAS (para. 8 of encl. 47); and c) The Defendants have no knowledge of the purchase of the underlying commodity at BSAS and dispute the validity of the Wakalah Agreement dated 30.5.2017 and Murabah Sale Contracts which were not executed by the 1st Defendant or its officers exhibited in exh. “SME-8 exh.” of encl. 69 (para. 10 of encl. 75). 28 [46] I find no merit in these submissions. [47] There is no requirement in law for the 1st Defendant, the recipient of the financings under the Facilities, to have been made a party to the purchase of the underlying commodity under the 3 Facilities, all Commodity Murabahah-i Financing. This mode of financing, based on an underlying asset, “Crude Palm Oil” traded at the BSAS is recognised in law as is provided for in the Facility Agreements dated 9.6.2015 and 30.5.2017. [48] The documents relating to the Facilities expressly authorize the Plaintiff to purchase the Commodity with the 1st Defendant’s undertaking to purchase the specified commodity at the Plaintiff’s Sale Price. [49] In respect of the 3rd Facility (CMRF-i Financing of RM15,000,000.00): a) Under “Method of Financing”, at page 2 of the Letter of Offer dated 24.4.2015 it is prescribed that the 1st Defendant is to request for the Plaintiff to purchase Commodity from Commodity Trader and sell to 1st Defendant; b) Pursuant to sections 4, 6 and 7 of Appendix 12 of the Facility Agreement dated 9.5.2015, the 1st Defendant is to request for Plaintiff to purchase 29 Commodity from Commodity Trader and sell to 1st Defendant as per the Asset Sale Agreement; and c) The recital of the Asset Sale Agreement dated 2.6.2015 confirms the 1st Defendant’s agreement to purchase Crude Palm Oil traded at BSAS at the Plaintiff’s stipulated Selling Price of RM16,753,761.98 for the Facility being the Bank's Purchase Pice and the Plaintiff’s profit upon deferred payment terms. [50] In respect of the the 1st Facility (CMRF-i Financing of RM10,000,000.00) and the 2nd Facility (CMRF-i Financing of RM3,000,000.00): a) Under “Underlying Asset” and “Method of Financing” in the Letter of Offer dated 9.5.2017, it is provided that the underlying asset is Commodity Traded at BSAS and the 1st Defendant is to request for the Plaintiff to purchase the Commodity from Commodity Trader and sell to the 1st Defendant as per the Wakalah Agreement and Murabahah Sale Contract; b) Pursuant to cl. 3.2 (Nature and method of the Facility) of the Facility Agreement dated 30.5.2017, the 1st Defendant is to request for the Plaintiff to purchase the Commodity from the Commodity Trader and sell to the 1st Defendant as per the Wakalah Agreement and Murabahah Sale Contract; 30 c) In Recital B of the Wakalah Agreement dated 30.5.2017 it is stated that “the Customer is desirous of appointing the Bank as the Customer's agent stated herein” with Plaintiff’s roles of agent that include execution of the Murabahah Sale Contract, Purchase of the Commodity and sale thereof provided in section 2. Section 2.5 and section 4 recognise that the 1st Defendant shall hold the Plaintiff harmless from any claim or loss by reason of acting as such agent; and d) In sections 1 and 3 of the Murabahah Sale Contract for CMRF-i of RM3,000,000.00 it is provided that the Bank (the Plaintiff) sells and the Customer (the 1st Defendant) purchases the Commodity at the Plaintiff’s Sale Price which includes the Plaintiff’s Purchase Price and the Plaintiff’s profit upon deferred payment terms. [51] The mode of financing pursuant to the Commodity Murabahah concept was duly complied with all the necessary documents were duly executed and cannot be challenged by the Defendants. The validity of financing under the Commodity Murabahah concept has consistently been recognised by the Courts. See: Kuwait Finance House Malaysia Bhd v. Vesta Energy Sdn Bhd & Ors [2012] 9 CLJ 516; RHB Islamic Bank Berhad v. Veheng Global Trade Sdn Bhd & Ors [2011] 1 LNS 684. 31 [52] The appointment of the Plaintiff as the 1st Defendant’s agent to sell the commodity in the market at the customer’s sale price was to facilitate the transaction so as to be compliant with the Shariah requirements of the Commodity Murabahah transactions. It was observed by Rohana Yusuf J (as she then was) in Tan Sri Abdul Khalid Ibrahim v. Bank Islam Malaysia Bhd & Another Case [2010] 4 CLJ 388 (High Court) that the demand on a person to fulfil contractual obligations in Shariah is an onerous one and challenges on the validity of an agreement of Islamic financing transactions after reaping the benefit is considered to be an attempt to renege contractual obligations which have been voluntarily agreed and acted upon. Also in Dato’ Hj Nik Mahmud Daud v. Bank Islam Malaysia Bhd [1998] 3 CLJ 605 (Court of Appeal), the Court did not concern itself with the intention of the parties to involve any transfer of proprietorship of the asset which was the basis of the Islamic financing transaction as what was important was the execution of the relevant property purchase agreement and the property sale agreement constituted part of the process required by the Islamic banking procedure before a party could avail itself of the financial facilities provided by the customer. The contention by the Defendants that the Defendants have no knowledge of the purchase of the underlying commodity at BSAS and the Wakalah Agreement dated 30.5.2017 and Murabah Sale Contracts are not valid is farcical especially since the 1st Defendant has benefited from the Facilities granted by the Plaintiff to the 1st Defendant. 32 [53] The Courts have consistently held that parties cannot dispute the validity of financing facilities when they have enjoyed the full benefits of the financings. See Maybank Islamic Bhd v. Kamarulzaman bin Mohamed Nordin [2014] 7 MLJ 685; United Trade Arena (M) Sdn Bhd & Ors v. Bank Pertanian Malaysia Bhd [2016] 2 MLJ 65; Bank Muamalat Malaysia Bhd & Ors v. Redha Resources Sdn Bhd & Ors [2017] 2 MLJ 686. Similarly, the 4th Defendant together with his co-directors, had accepted the Letters of Offer and the contemporaneous documents for and on behalf of the 1st Defendant who had enjoyed the full benefits of the Facilities. The Defendants cannot now 5 years after execution of the 9.6.2015 Facility Agreement and all documents related thereto dispute the sale and purchase of the underlying commodity and the validity of the Facilities. Unenforceable Guarantee [54] The Defendants submitted that the Guarantee executed by the 4th Defendant is unenforceable as the Plaintiff failed to conduct its part of the obligations in accordance the financing agreements executed by the 1st Defendant. [55] The Defendants submitted further that the Plaintiff has not proved its claim against the 1st Defendant in this suit and it is therefore premature for the Plaintiff to enforce the Guarantee against the 4th Defendant. 33 [56] I do not agree with these submissions. The Plaintiff can pursue an action against the 4th Defendant without the Plaintiff having to first recover from the 1st Defendant pursuant to the terms and conditions of the Facility Agreements and the Guarantee and as recognised in law. [57] Section 10.2 of the Facility Agreement dated 30.5.2017 provides as follows: “Right to proceed concurrently: Notwithstanding any provision to the contrary herein, it is hereby expressly agreed that in the event of default or breach by the Customer of any term, covenant stipulation and/or undertaking herein provided on the part of the Customer to be observed and performed, the Bank shall, at its absolute discretion, have the exclusive right to exercise all or any of the remedies available to the Bank whether-by this Agreement or Security Documents or by statute or otherwise and shall be entitled to exercise such or all the remedies concurrently including pursuing all remedies of sale or possession or other remedies available and/or concurrently or otherwise institute civil proceedings against the Customer for the recovory of all monies due and payable owing to the Bank.” [58] Clause 2 of the Guarantee provides as follows: “In the event of the Customer failing to observe and perform any of the covenants, undertakings, stipulations and terms contained in the Facility which have been executed by the Customer in your favour in respect of the payment of the monthly instalments and ail sums payable thereunder and on the part of the Customer to be observed and performed you are at your absolute discretion notwithstanding anything to the contrary contained in the said Facility entitled to demand repayment in full from us of the whole of the instalments or such amount as may be outstanding including all moneys that are payable by the Customer pursuant to the said Facility. All 34 payments by us under this Guarantee shall be made in full without any deduction or withholding whether in respect of set-off, counterclaim or otherwise whatsoever.” [59] The Plaintiff is not precluded from pursuing its remedies against the 4th Defendant as guarantor for the 1st Defendant under the Facilities as the Guarantee does not contain such a condition before demand can be made on the Guarantors. Further the 4th Defendant and the other guarantors as principal debtors, irrevocably and unconditionally guaranteed jointly and severally to the Plaintiff the payment of all sums of money owing to the Plaintiff from the 1st Defendant. See cl. 15 of the Guarantee. See also EON Bank Berhad v. Mohd Yunus Alias & Anor (No 2) [2010] 1 LNS 419 where it was held that the effect of principal debtor clauses in a guarantee was that the Bank was not obliged to realise other securities or proceed against the borrower before pursuing the guarantor. [60] In any event, the Defendants have failed to show that the Plaintiff failed to conduct its part of the obligations in accordance the financing agreements executed by the 1st Defendant as I have found above. Conclusion [61] Considering the totality of the facts and circumstances of the case as disclosed in the affidavit evidence, It was quite 35 clear to me that the Plaintiff had clearly met the preliminary requirements in an O. 14 application in accordance with the principles established by National Company For Foreign Trade v. Kayu Raya Sdn Bhd [supra] and further, applying the leading Supreme Court case of Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 CLJ 627. Accordingly I held that the contentions of the Defendants do not amount to triable issues or constitute any reasonable defence. 30 March 2021 ATAN MUSTAFFA YUSSOF AHMAD Judicial Commissioner Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Datin Jeyanthini Kannaperan & Ms Chan Jia Lin (Messrs Shearn Delamore & Co.) For the 1st and 4th Mr Ebenezer Ramesh Defendants: (Messrs. Yahna SG) 36