Malaysia Case Law: Decisions & Judgments

Topic

Penalty clause

Legal area

Court

30 Jul 2025

NOOR AMALIENA BINTI MOHD HAMRAAZS ABU KASSIM BIN ABD KARIM

Citation

BA-22NCvC-157-04/2023 (Mahkamah Tinggi)
Court

High Court
Case number

BA-22NCvC-157-04/2023 (Mahkamah Tinggi)

The court concluded that time was not rendered 'of the essence' by the defendant's notices because the notices sought penalty payments rather than serve as a clear 30‑day notice to make time of the essence as required by clause 21; delays were justified by external events amounting to force majeure and by failures on the part of the landowner to cooperate; the defendant failed to follow clause 21's notice and remedy procedure before termination; defendant breached clause 6.5 by dealing with the subject plots; accordingly the termination was invalid and plaintiff was entitled to a declaration…
8 Apr 2025

THE NEW STRAITS TIMES PRESS (MALAYSIA) BERHAD AIDEAH COMMUNICATION SDN BHD

Citation

02(f)-30-08/2024(W) (Mahkamah Persekutuan)
Court

f
Case number

02(f)-30-08/2024(W) (Mahkamah Persekutuan)

Clauses 4.1 and 4.2 of the 2013 Agreement did not create an absolute or unconditional Minimum Guaranteed Sum; they established payment percentages and targets qualified by Clause 4.3's requirement that the plaintiff use reasonable endeavour, therefore the defendant was not entitled to automatic set-off absent proof the plaintiff failed to use reasonable endeavour; burden to prove failure lay on the defendant; Court of Appeal's decision in favour of the plaintiff is affirmed.
4 Mar 2025

Marwiya Binti Miswan Dede Resources Sdn Bhd

Citation

BA-12BNCvC-44-07/2024 (Mahkamah Tinggi)
Court

High Court
Case number

BA-12BNCvC-44-07/2024 (Mahkamah Tinggi)

The High Court held that the contractual phrase 'Floral Design Training Course' objectively required a structured, identifiable training program delivered over an identifiable period by identifiable trainers; routine on-the-job instruction did not meet that standard. Consequently the respondent failed to prove provision of such a course. Alternatively, even if training had been provided, the RM60,000 stipulation constituted an extravagant and disproportionate sum relative to the respondent's legitimate interest and was therefore unenforceable as unreasonable compensation under s.75 Contracts…
27 May 2024

Impress Eight (M) Sdn Bhd Ultrabliss Sdn Bhd

Citation

BA-24NCC-97-08/2023 (Mahkamah Tinggi)
Court

High Court
Case number

BA-24NCC-97-08/2023 (Mahkamah Tinggi)

The court held the Sale and Purchase Agreement became void when the State Authority consent was not obtained within the contractual periods and the plaintiff validly terminated the contract; there was no substantial dispute of fact so originating summons was the correct mode; the contractual 8% p.a. interest is a stipulated sum and not an excessive penalty under the law as clarified by the Federal Court in Cubic Electronics; the defendant's strike-out application failed and plaintiff's claim for refund of deposit with interest succeeds.
7 May 2024

LE BOURNE SDN BHD ISC SDN BHD

Citation

BL-B52NCC-77-11/2023 (Mahkamah Sesyen)
Court

Sessions Court
Case number

BL-B52NCC-77-11/2023 (Mahkamah Sesyen)

The court found no triable issues: the contract was a lump-sum contract with delivery obligation ended October 2022; Defendant breached by refusing the balance deliveries; Defendant had acknowledged and accepted storage charges by email and is estopped from denying them; the historic meeting minute was a one-off goodwill adjustment and not a standing business practice to treat unfulfilled quantities as cancelled; the cancellation-fee clause is a penal imposition, not a cap on liability; accordingly summary judgment was appropriate and entered for Plaintiff for the claimed sums with costs.
21 Mar 2024

ABDUL HADI BIN HAJI BAHAROM MUHAMMAD HARIZ BIN MD YUSOFF

Citation

WA-11BNCC-12-07/2023 (Mahkamah Tinggi)
Court

High Court
Case number

WA-11BNCC-12-07/2023 (Mahkamah Tinggi)

Appeal allowed: the RM50,000 clause is an excessive and unenforceable penalty under section 75 because it is disproportionate to the plaintiff's legitimate interest and the highest conceivable loss (RM15,000), the Magistrate erred in applying the burden of proof such that the appellant discharged the burden of showing unreasonableness by reliance on disproportion (over three times the investment).
5 Mar 2024

AIDEAH COMMUNICATION SDN BHD THE NEW STRAITS TIMES PRESS (MALAYSIA) BERHAD

Citation

W-02(NCvC)(W)-1274-07/2021 (Mahkamah Rayuan)
Court

NCvC
Case number

W-02(NCvC)(W)-1274-07/2021 (Mahkamah Rayuan)

The Court held clause 4.3 of the 2013 Agreement imposed only a duty to use reasonable endeavour to achieve the MGS and not an absolute unconditional warranty; the High Court failed to appreciate clause 4.3 and thus erred in finding appellant liable for shortfall and allowing the respondent's set-off and damages; respondent was estopped from denying approval/acquiescence to the reduced advertising rates; appeal allowed and judgment entered for appellant for RM1,178,369.97 plus 5% p.a. interest and costs RM80,000 subject to allocator.
15 Jun 2023

KHOO EE KEAT BROWNLAND PROPERTIES (M) SDN BHD

Citation

WA-12BNCvC-155-11/2022 (Mahkamah Tinggi)
Court

High Court
Case number

WA-12BNCvC-155-11/2022 (Mahkamah Tinggi)

The High Court held the signed employment contract was valid and binding; the plaintiff breached the contract by resigning before the 3‑year term and by working for a competitor; the defendant proved breach and the existence of a contractual termination fee of RM300,000 such that under s75 Contracts Act the defendant is entitled to compensation up to that amount and the plaintiff failed to prove the clause unreasonable; accordingly the appeal is dismissed.
13 Apr 2023

CIMB BANK BERHAD RODWIN V BAHADUR

Citation

WA-22NCC-723-12/2019 (Mahkamah Tinggi)
Court

High Court
Case number

WA-22NCC-723-12/2019 (Mahkamah Tinggi)

The court held the Plaintiff proved the debt on a balance of probabilities and the relevant loan documents validly authorized default and penalty interest and capitalisation; BNM Fair Treatment Guidelines did not render the contractual terms void or operate retrospectively to void the 2012 agreement; FSA saving provision and established contract law principles preserved enforceability; Defendant failed to rebut the bank's accounts or show manifest error, so judgment entered for Plaintiff.
30 May 2022

1. ) WAN IBRAHIM BIN WAN LONG 2. ) WAN NAJIHAH BINTI WAN KAMAL XXXX

Citation

WA-12ANCvC-203-07/2021 (Mahkamah Tinggi)
Court

High Court
Case number

WA-12ANCvC-203-07/2021 (Mahkamah Tinggi)

The counterclaim was struck out because the defendants failed to obtain PTG approval within the contractual time (a fundamental condition precedent/time‑essence term), there was no contractual basis to claim RM5,950,000 and the counterclaim was plainly and obviously unsustainable under Order 18 r 19.