Malaysia Case Law: Decisions & Judgments

Topic

Indemnity vs guarantee

Legal area

Court

24 Aug 2021

GRANSTEP DEVELOPMENT SDN BHD TAN CHONG HENG & 4 LAGI

Citation

WA-222-116-11/2020 (Mahkamah Tinggi)
Court

High Court
Case number

WA-222-116-11/2020 (Mahkamah Tinggi)

The instrument was ambiguous and irreconcilable as between provisions that suggested pay-on-demand and provisions requiring proof of default and indemnity for actual loss; applying contra proferentem against the plaintiff who drafted the guarantee, the court construed it as a conditional contract of indemnity (not a performance bond), requiring proof of contractor default and loss; plaintiff's claim was premature and summary judgment was dismissed and the suit struck off.
15 Apr 2021

CAPASIA SOLAR ONE LTD SUN ENERGY VENTURES HOLDINGS (LABUAN) LTD DAN 7 LAGI

Citation

WA-22NCC-329-07/2020 (Mahkamah Tinggi)
Court

High Court
Case number

WA-22NCC-329-07/2020 (Mahkamah Tinggi)

Defendants raised sufficient triable issues — including whether the MOU varied the MIA, whether the consent order precludes reliance on the earlier dilution breach, estoppel/set-off and the proper construction of the Memorandum of Deposit (indemnity vs limited liability satisfied from mortgaged securities) — that required full trial and oral evidence; therefore summary judgment under Order 14 was inappropriate and the application was dismissed.
11 Mar 2021

GAN TECK LIM GJ CONSULTANCY SDN BHD

Citation

WA-27NCC-97-10/2020 (Mahkamah Tinggi)
Court

High Court
Case number

WA-27NCC-97-10/2020 (Mahkamah Tinggi)

The Letter of Indemnity and Guarantee is an indemnity, not a guarantee, because its terms impose a primary, independent liability on the Defendant (express personal liability for demurrage and an express clause preserving liability despite variation of the Fixture Note); therefore s.10 Arbitration Act 2005 does not mandate a stay and referral to arbitration and the strike out application under O.18 r.19 ROC 2012 fails.
3 Feb 2020

BANK PEMBANGUNAN MALAYSIA BERHAD SPRING HILL BIOVENTURES SDN BHD

Citation

W-02(NCC)(W)-1721-08/2017 (Mahkamah Rayuan)
Court

NCC
Case number

W-02(NCC)(W)-1721-08/2017 (Mahkamah Rayuan)

The Court held the impugned letters are contracts of guarantee under s79 (the principal debtor's request may be implied from surrounding documents and conduct), the letters do not impose an express obligation on the creditor to notify the surety of default, and variations to the facilities made without the surety's consent discharged the surety under section 86 (discharge as to transactions subsequent to the variation). Accordingly the Respondent was released from liabilities under the 1st Term Loan with effect from the variation date (23.10.2009) and had previously been released in respect o…

Malaysia Case Law

GRANSTEP DEVELOPMENT SDN BHD TAN CHONG HENG & 4 LAGI

CAPASIA SOLAR ONE LTD SUN ENERGY VENTURES HOLDINGS (LABUAN) LTD DAN 7 LAGI

GAN TECK LIM GJ CONSULTANCY SDN BHD

BANK PEMBANGUNAN MALAYSIA BERHAD SPRING HILL BIOVENTURES SDN BHD