386 Malayan Law Journal [2020] 10 MLJ

Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor for A
another appeal

HIGH COURT (KUALA LUMPUR) — ORIGINATING SUMMONS B

NOS WA-24C(ARB)-11–02 OF 2018 AND WA-24C(ARB)-12–02 OF
2018
LEE SWEE SENG J
19 SEPTEMBER 2019
C
Civil Procedure — Damages — Assessment of damages — Plaintiff gave
undertaking to pay damages if injunctions set aside — Court set aside interim
injunction and Erinford injunctions — Defendants applied for assessment of
damages — Whether undertaking enforceable when there was no application to set D
aside ad interim injunctions — Whether there was a need for finding from court
that ad interim injunction was wrongly granted — Whether applications for
assessment of damages pursuant to undertaking was premature due to arbitration
proceedings — Whether defendant proved any losses arising out of ad interim
injunction and ad interim Erinford Orders E

The plaintiff had filed an action to restrain Star Media Group Bhd (‘Star
Media’) from receiving the bank guarantees in the sum of RM25m each from
Ambank (M) Bhd (‘Ambank’) and United Overseas Bank (M) Bhd (‘UOB’).
The plaintiff had given undertaking to pay damages in the event the F
injunctions applied for were set aside (‘the undertaking’). In the present case,
the relevant injunctions were set aside, and Star Media had applied for
assessment of damages. The pertinent issues to be considered by the court were:
(a) whether the undertaking applied when interim injunctions and Erinford
injunctions were granted by the courts though finally set aside and decisions of G
which were affirmed by the Federal Court in that leave to further appeal was
dismissed; (b) whether the assessment of damages should wait until the
outcome of the arbitration; and (c) the rate at which the interest should be
imposed for the period in which the bank guarantee sum could not be released
by the banks as the injunctions were in place. H
Held:
(1) The assessment of damages was pursuant to the undertaking given to the
court by the plaintiff and unless the court had ordered that there be no
assessment of damages for reasons that it would invariably give, the I
defendant, Star Media was entitled to hold the plaintiff to its undertaking
and to pray that it should make good its undertaking to pay damages
arising from the loss suffered by Star Media because of the ad interim
orders. Given that the plaintiff had already acknowledged by way of the
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 387

A Court of Appeal order Star Media’s right to file the application herein
despite not filing any application to set aside the interim injunctions, the
court agreed with the defendant that the plaintiff was barred and
estopped from raising any dispute as to the propriety or validity of the
application to enforce the undertaking pursuant to the Court of Appeal
B order (see paras 32 & 34).
(2) There were no merits in the plaintiff ’s argument that Star Media could
not move this court for the plaintiff ’s undertaking to pay damages to be
enforced merely because Star Media had not applied for the ad interim
C injunction to be set aside. The whole purpose of the undertaking given by
the plaintiff was precisely because the application could not be heard
immediately and the plaintiff itself had asked for an ad interim
injunction against their undertaking to pay damages for any losses that
Star Media may suffer arising out of the ad interim injunction. To
D interpret otherwise would be to render the undertaking ineffectual and
toothless as invariably the court would grant an ad interim injunction
until the matter could be heard inter partes (see paras 58–59).
(3) There was no need for the court to make a finding that the ad interim
injunction and ad interim Erinford was wrongly or incorrectly granted.
E That was because of the very nature of the ad interim orders which were
given pending the hearing proper of the applications for the injunctions,
to preserve status quo and without delving into the merits of the
applications as yet (see para 60).

F (4) Whilst the court would retain its discretion with respect to when the
assessment should be done, in the absence of special circumstances there
was no cogent reason to refuse the assessment. The fact that the final
outcome of the arbitration may very well be in favour of the plaintiff
would not qualify to be a special circumstance. It had been established
G through every tier of appeal that the dismissal of the injunction
applications by the High Court was rightly decided and the decision was
affirmed in the Court of Appeal and by the Federal Court when it
dismissed the leave application. It was an affirmation that the ad interim
injunction and the ad interim Erinford injunction ought not to have
H been granted in the first place. There was thus nothing premature but
everything proper for Star Media to apply for assessment of damages
pursuant to the plaintiff ’s undertaking given to the High Court (see
paras 74, 77 & 82–83).
(5) The fact that the bank guarantee sum of RM5m was not released would
I mean that the plaintiff did not have to service any interest in the said sum
until it was released and the fact that the defendant had been prevented
from receiving the said sum would mean that it would be deprived of the
interest which it could have earned had it received the said sum and put
the same in fixed deposit at least. In the present case, Star Media was
388 Malayan Law Journal [2020] 10 MLJ

claiming merely based on what it would conservatively have earned from A

interests for the said sum in their accustomed rates with their banks.
There was no good reason why the defendant should be deprived of
interest that it would otherwise have earned had it not been for the ad
interim injunction and the ad interim Erinford injunction (see paras 86
& 89–91). B
(6) The court applied the rate of 3.5%pa as reasonable in the circumstances
of the case. The court had allowed the period from 28 February 2018 (the
date the defendant Star Media would have received the guarantee sum if
not for the injunction) to 9 January 2019 (the date after the dismissal of
C
leave by the Federal Court to appeal to it ie 7 January 2019 and the latter
date being the date the defendant actually received the monies) as the
relevant period for the calculation of the interest. The court further
ordered costs of RM5,000 per application to the defendant Star Media
(see paras 98, 101 & 103).
D
[Bahasa Malaysia summary
Plaintif telah memfailkan tindakan untuk menghalang Star Media Group Bhd
(‘Star Media’) daripada menerima jaminan bank berjumlah RM25 juta setiap
satu dari Ambank (M) Bhd (‘Ambank’) dan United Overseas Bank (M) Bhd E
(‘UOB’). Plantif telah membuat akujanji untuk membayar ganti rugi sekiranya
injunksi-injunksi yang dipohon diketepikan (‘akujanji’). Dalam kes ini,
injunksi-injunksi yang relevan telah diketepikan, dan Star Media telah
memohon penilaian ganti rugi. Isu-isu penting yang harus dipertimbangkan
oleh mahkamah adalah: (a) sama ada akujanji terpakai apabila injunksi interim F
dan injunksi Erinford diberikan oleh mahkamah walaupun akhirnya
diketepikan dan keputusan tersebut dikekalkan oleh Mahkamah Persekutuan
di mana permohonan kebenaran untuk memfailkan rayuan selanjutnya
ditolak; (b) sama ada penilaian ganti rugi harus menunggu sehingga keputusan
timbang tara; dan (c) kadar bunga yang harus dikenakan untuk tempoh di G
mana jumlah jaminan bank tidak dapat dilepaskan oleh bank-bank disebabkan
oleh penguatkuasaan injunksi-injunksi tersebut.

Diputuskan:
(1) Permohonan penilaian ganti rugi adalah berdasarkan akujanji yang H
diberikan kepada mahkamah oleh plaintif dan melainkan mahkamah
memerintahkan agar tidak ada penilaian ganti rugi dengan alasan yang
akan diberikan, defendan, Star Media berhak untuk menuntut akujanji
plaintif dan memohon agar dia harus menunaikan akujanjinya untuk
membayar ganti rugi yang timbul daripada kerugian yang dialami oleh I
Star Media disebabkan oleh perintah-perintah ad interim.
Memandangkan plaintif telah mengakui melalui perintah Mahkamah
Rayuan berkenaan hak Star Media untuk memfailkan permohonan
semasa walaupun tanpa memfailkan permohonan untuk mengenepikan
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 389

A injunksi interim, mahkamah bersetuju dengan defendan bahawa plaintif

dilarang dan dihalang untuk membangkitkan apa-apa pertikaian
mengenai kesesuaian atau kesahihan permohonan untuk
menguatkuasakan akujanji tersebut menurut perintah Mahkamah
Rayuan (lihat perenggan 32 & 34).
B
(2) Tidak terdapat merit dalam hujahan plaintif bahawa Star Media tidak
boleh menggerakkan mahkamah ini untuk menguatkuasakan akujanji
plaintif untuk membayar ganti rugi hanya kerana Star Media tidak
memohon agar injunksi ad interim diketepikan. Keseluruhan tujuan
C akujanji yang diberikan oleh plaintif adalah kerana permohonan tersebut
tidak dapat didengar dengan segera dan plaintif sendiri telah memohon
injunksi ad interim dengan akujanji mereka akan membayar ganti rugi
atas kerugian yang mungkin ditanggung oleh Star Media akibat daripada
injunksi ad interim tersebut. Penafsiran sebaliknya akan menjadikan
D akujanji tersebut tidak efektif dan tidak meninggalkan kesan kerana
sememangnya mahkamah akan memberikan injunksi ad interim
sehingga kes tersebut dapat didengar dengan kehadiran pihak-pihak
(lihat perenggan 58–59).
(3) Mahkamah tidak perlu membuat dapatan bahawa injunksi ad interim
E dan Erinford ad interim diberikan secara salah. Itu adalah kerana sifat
perintah ad interim itu sendiri yang diberikan sementara menunggu
pendengaran penuh permohonan injunksi-injunksi tersebut, untuk
mempertahankan status quo dan tanpa membahas merit permohonan
tersebut (lihat perenggan 60).
F
(4) Walaupun mahkamah akan mempertahankan budibicaranya mengenai
bila penilaian harus dilakukan, namun, jika tidak ada keadaan istimewa,
tidak ada alasan yang meyakinkan untuk menolak penilaian tersebut.
Fakta bahawa keputusan akhir dari timbang tara mungkin memihak
G kepada plaintif tidak layak untuk menjadi keadaan istimewa. Telah
ditentukan melalui setiap tahap rayuan bahawa penolakan permohonan
injunksi oleh Mahkamah Tinggi telah diputuskan dengan tepat dan
keputusan tersebut dikekalkan di Mahkamah Rayuan dan oleh
Mahkamah Persekutuan ketika ia menolak permohonan kebenaran
H merayu. Ini adalah suatu penegasan bahawa injunksi ad interim dan
Erinford ad interim tidak seharusnya diberikan sejak awal. Oleh itu,
tidak terlalu awal dan adalah wajar untuk Star Media memfailkan
permohonan penilaian ganti rugi sesuai dengan akujanji plaintif yang
diberikan kepada Mahkamah Tinggi (lihat perenggan 74, 77 & 82–83).
I (5) Fakta bahawa wang jaminan bank berjumlah RM5 juta tidak dilepaskan
bererti bahawa plaintif tidak perlu membayar faedah bagi jumlah
tersebut hingga wang tersebut dilepaskan dan fakta bahawa defendan
telah dihalang untuk menerima jumlah tersebut bermaksud bahawa ia
akan kehilangan faedah yang dapat diperolehnya sekiranya menerima
390 Malayan Law Journal [2020] 10 MLJ

jumlah tersebut dan sekurang-kurangnya memasukkannya ke dalam A

simpanan tetap. Dalam kes ini, Star Media menuntut hanya berdasarkan
apa yang akan diperolehnya secara konservatif dari faedah bagi jumlah
tersebut dalam kadar biasa dengan bank mereka. Tidak ada alasan yang
baik mengapa defendan harus kehilangan faedah yang akan diperolehnya
jika tidak kerana injunksi ad interim dan injunksi Erinford ad interim B
(lihat perenggan 86 & 89–91).
(6) Mahkamah menggunakan kadar 3.5% setahun sebagai munasabah
dalam keadaan kes. Mahkamah telah membenarkan tempoh dari
28 Februari 2018 (tarikh defendan Star Media sepatutnya menerima C
jumlah jaminan jika tidak kerana injunksi tersebut) hingga 9 Januari
2019 (tarikh selepas penolakan kebenaran oleh Mahkamah Persekutuan
untuk mengemukakan rayuan kepadanya iaitu 7 Januari 2019 dan tarikh
terakhir adalah tarikh defendan benar-benar menerima wang) sebagai
tempoh yang relevan untuk pengiraan faedah. Mahkamah selanjutnya D
memerintahkan kos sebanyak RM5,000 bagi setiap permohonan kepada
defendan Star Media (lihat perenggan 98, 101 & 103).]

Cases referred to
Cheltenham and Gloucester Building Society v Ricketts and others [1993] 4 All ER E
276, CA (refd)
Clough Engineering Limited v Oil and Natural Gas Corporation Limited [2008]
FCAFC 136, FC (refd)
F Hoffmann-La Roche & Co AG and others v Secretary of State for Trade and
F
Industry [1974] 2 All ER 1128, HL (refd)
GS Gill Sdn Bhd v Descente Ltd [2010] 4 MLJ 609, FC (refd)
Goo Sing Kar v Dato’ Lim Ah Chap & Ors [2013] 3 MLJ 374, CA (refd)
Gumusut-Kakap Semi-Floating Production System (L) Ltd v Sabah Shell
Petroleum Co Ltd [2017] MLJU 877; [2017] 1 LNS 945, HC (refd) G
Jones and others v Secretary of State for Energy and Climate Change and
another [2014] 3 All ER 956, CA (refd)
Kenwood Electronics (M) Sdn Bhd and Anor v Profile Spec (M) Sdn Bhd and
others (Part 2) [2007] MLJU 94, HC (refd)
Les Laboratoires Servier and another v Apotex Inc and others (No 2) [2009] IP & H
T 600, Ch D (refd)
Middy Industries Sdn Bhd & Ors v Arensi-Marley (M) Sdn Bhd [2013] 3 MLJ
511, CA (refd)
P Aker Flowerbulbs Pty Ltd v Coulter [2004] 212 ALR 606, FC (refd)
RIH Services (M) Sdn Bhd v Tanjung Tuan Hotel Sdn Bhd [2002] 3 MLJ 1, CA I
(refd)
SmithKline Beecham plc and others v Apotex Europe Ltd and others [2006] 4 All
ER 1078, CA (refd)
Soo Boon Siong @ Saw Boon Siong v Saw Fatt Seong and Soo Hock Seang (as estate
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 391

A representative Soo Boon Kooi@ Saw Boon Kooy (deceased)) & Ors [2008] 1
MLJ 27, CA (refd)

Legislation referred to
Arbitration Act 2005 s 11
B Rules of Court 2012 O 29 r 1(2A), (2A)(d), (2A)(e)
Wong Rhen Yen (Sharon Chong with him) (Dennis Nik & Wong) for the plaintiff.
Wong Guo Bin (Izzuddin Zahidi with him) (Izral Partnership) for the defendant.

C Lee Swee Seng J:

PARTIES AND DISPUTES

[1] The key issue in these two related applications by the defendants for
D assessment of damages arising out of an undertaking by the plaintiff to pay
damages in the event the injunctions applied for are set aside is whether the
undertaking applied when the interim injunctions and Erinford injunctions
were granted by the courts though finally set aside and decisions of which were
affirmed by the Federal Court in that leave to further appeal to it was dismissed.
E
[2] Related to that is whether the assessment of damages should wait until
the outcome of the arbitration which had hardly started beyond a notice to
arbitration issued by the plaintiff.
F
[3] The subsidiary issue is the rate at which the interest should be imposed
for the period in which the bank guarantee sum could not be released by the
banks as the injunctions were in place either as ad interim or Erinford
injunctions depending on the point in time and period of time when either
G injunctions were operative.

[4] For ease of reference, the first defendant, Star Media Group Bhd, in
both Originating Summons Nos WA-24C(ARB)-11–02 of 2018 (‘OS 11’)
and WA-24C(ARB)-12–02 of 2018 (‘OS 12’) (collectively referred to as ‘OSs’)
H will be referred to as ‘Star Media’ or the ‘defendant’. The second defendant in
OS 11 and OS 12 shall be referred to as AmBank and UOB respectively.

[5] The plaintiff, Jaks Island Circle Sdn Bhd (‘Jaks’) had opposed both the
I applications for assessment of damages by Star Media. The applications are in
encl 62 for the AmBank guarantee in OS 11 and encl 55 for the UOB
guarantee with respect to OS 12.
392 Malayan Law Journal [2020] 10 MLJ

PREVIOUS DETERMINATIONS A

[6] The defining milestones in the chronology of events have been culled
from the plaintiff ’s narration in its written submissions filed.
B
[7] On 23 February 2018, the plaintiff initiated proceedings herein to
restrain Star Media from receiving the bank guarantees in the sum of RM25m
each from AmBank and UOB.

[8] It is admitted that the plaintiff had given its undertaking as to damages C
that Star Media may suffer arising out of the injunction applied for, in its
affidavits in support of the injunction applications dated 23 February 2019.

[9] On 26 February 2018, the High Court granted the plaintiff an ad

interim injunction (‘ad interim HC injunction’) pending disposal of the OSs. D

[10] Learned counsel for the plaintiff said it is pertinent to note that Star
Media did not file any application to set aside the ad interim injunction in the
OSs.
E
[11] On 12 July 2018, the plaintiff ’s OSs were dismissed with costs (‘High
Court order’).

[12] It was further highlighted that the High Court did not make any orders F
enforcing the plaintiff ’s undertaking as to damages.

[13] Dissatisfied with the decision of the High Court, the plaintiff on 13 July
2018 appealed against the High Court order vide Court of Appeal Civil Appeal
No W-02(C)(A)-1477–07 of 2018 and Civil Appeal G
No W-02(C)(A)-1478–07 of 2018 (collectively referred to as ‘the civil appeals’)

[14] Star Media also filed a cross appeal on the ground that the High Court
ought to have ordered the plaintiff to make good on its undertaking as to
damages. The cross appeal was subsequently withdrawn at the hearing of the H
appeal. Learned counsel for Star Media said the withdrawal was on the
understanding given by the plaintiff that it may proceed with an application for
assessment of damages in the High Court if the plaintiff ’s appeal to the Court
of Appeal was unsuccessful.
I
[15] Pending the hearing of the plaintiff ’s Civil Appeals, the plaintiff applied
for an Erinford injunction before the High Court to restrain Star Media from
receiving payment under the bank guarantees pending the disposal of the civil
appeals (‘HC Erinford’).
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 393

A [16] On 17 July 2018, at the first case management for the HC Erinford, the
High Court granted an ad interim HC Erinford injunction pending the
disposal of the inter partes hearing.

[17] On 23 July 2018, the HC Erinford was heard and dismissed by the
B High Court with costs.

[18] This did not deter the plaintiff and with dogged determination it
applied on 25 July 2018 to the Court of Appeal for a similar Erinford
C injunction pending disposal of the civil appeals (‘COA Erinford’).

[19] On 27 July 2018, the Court of Appeal dismissed the COA Erinford
with costs.

D [20] As endurance is often regarded as a virtue against the setbacks in life, the
plaintiff pommel itself to pursue further and exhaust all avenues of appeal.

[21] On 29 July 2018, the plaintiff filed a motion for leave to appeal to the
Federal Court against the Court of Appeal’s decision in dismissing the COA
E
Erinford vide Federal Court Civil Application No W-08(i)-391–07 of 2018
and W-08(i)-392–07 of 2018 (collectively referred to as ‘FC civil leave
Erinford applications 391 and 392’).

F [22] To prevent as it were the horse from bolting, the plaintiff applied for an
Erinford Injunction at the Federal Court to restrain Star Media from receiving
payment under the bank guarantee pending disposal of Civil Applications 391
and 392.

G [23] The civil appeals were heard on 14 November 2018. The Court of
Appeal dismissed the plaintiff ’s civil appeals and affirmed the High Court
order dated 12 July 2018 (‘COA order’).

[24] The plaintiff then made an oral application for a fresh Erinford
H injunction pending its leave to appeal to the Federal Court. This was dismissed
by the Court of Appeal.

[25] Dissatisfied with the decision of the Court of Appeal, the plaintiff on
I 16 November 2018 filed a motion for leave to appeal to the Federal Court
against the COA order in dismissing the civil appeals via Federal Court Civil
Application Nos W-08(f )-569–11 of 2018 and W-08(f )-571–11 of 2018.
(collectively referred to as ‘FC civil injunction leave applications 569 and 571’)
394 Malayan Law Journal [2020] 10 MLJ

[26] Having filed Civil Applications 569 and 571 in the Federal Court, the A
FC civil leave Erinford applications 391 and 392 in relation to the COA’s
refusal to grant Erinford injunction became redundant and was withdrawn on
19 November 2018.

[27] The plaintiff thereafter obtained an interim injunction from the Federal B
Court pending the disposal of Civil Applications 569 and 571.

[28] On 7 January 2019, the Federal Court dismissed the plaintiff ’s Civil
Applications 569 and 571 with costs (‘FC order’). C

[29] Truly it is a case where no stones had been left unturned and having
exhausted all avenues, the curtain must finally fall with the caption ‘The End’;
a cryptic reminder that the most important thing in life is not to have won but
to have fought well. D

[30] Reality sank in and with no impediments even over the horizon, the
bank guarantees in the sum of RM25m each was subsequently released to the
Star Media on 9 January 2018 by AmBank and UOB following the FC order.
E
PRINCIPLES AND DELIBERATIONS

[31] It was argued by the plaintiff that the High Court when dismissing its
application for the injunction did not specifically make an order for damages to
F
be assessed.

[32] The assessment of damages is pursuant to the undertaking given to the

court by the plaintiff and unless the court had ordered that there be no
assessment of damages for reasons that it would invariably give, the defendant G
Star Media is entitled to hold the plaintiff to its undertaking and to pray that it
should make good its undertaking to pay damages arising from the loss suffered
by Star Media because of the ad interim orders.

[33] Acting on an abundance of caution, the defendant Star Media had in H

fact cross appealed to the Court of Appeal on enforcing the undertaking as to
damages and that cross appeal was withdrawn only upon the consent and
agreement of the plaintiff that Star Media is entitled to file an application to
enforce the undertaking given by the plaintiff. This is reflected in para (e) of the
Court of Appeal order dated 14 November 2018. I

[34] Given that plaintiff had already acknowledged by way of the Court of
Appeal order Star Media’s right to file the application herein despite not filing
any application to set aside the interim injunctions, I agree with the defendant
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 395

A that the plaintiff is barred and estopped from raising any dispute as to the
propriety or validity of the application to enforce the undertaking pursuant to
the Court of Appeal order.

[35] The further arguments would be explored below with respect to the
B need to file an application to set aside the ad interim injunction.

[36] In Kenwood Electronics (M) Sdn Bhd and Anor v Profile Spec (M) Sdn Bhd
and others (Part 2) [2007] MLJU 94, it was held as follows:
C [12] Since the order granting the injunction is specifically based upon a plaintiff
obtaining the injunction undertaking to abide by any order made as to damages in
the event the plaintiff ’s claim fails, no further order need to be made at trial as to
whether an assessment of damages is necessary. In the ordinary course, a party acting in
good faith should be able to agree to reasonable damages, and no formal application or
order from the Court is necessary. (Emphasis added.)
D
[37] Here the two OSs had been disposed of with finality as all avenues of
appeal have been exhausted. There is no good reason to bar the defendant Star
Media from making these applications for assessment of damages.
E
Whether the undertaking as to damages ought to be enforced when there was no
application by the defendant Star Media to set aside the ad interim injunction

[38] The undertaking as to damages was given by the plaintiff to the court
F when it applied for an injunction and until the hearing of the application, an ad
interim injunction was granted to preserve the status quo. The undertaking
given by the plaintiff is to pay the defendant here, Star Media, damages in the
event that Star Media would have suffered because of the injunction.

G [39] The requirement of an undertaking is a deterrent against any applicant

perfunctorily obtaining one either ex parte or by way of an ad interim order
pending the hearing of the inter partes application or as in here, until the OSs
are heard or in some cases, until the writ action or arbitration is heard.

H [40] Often times the facts would not have been ascertained yet but the
applicant is contending that it would suffer irreparable harm which cannot be
compensated by money in the event that it should prove to be successful at the
inter partes hearing or at the trial or arbitration. It is a way of addressing the
competing interest of the parties in the meanwhile in a way that would be fair
I and reasonable to the parties.

[41] Peter Gibson LJ in Cheltenham and Gloucester Building Society v Ricketts

and others [1993] 4 All ER 276 explained the requirement of an undertaking in
the context of an injunction application as follows:
396 Malayan Law Journal [2020] 10 MLJ

The practice of requiring an undertaking in damages from the applicant for such an A
injunction as the price for its grant was originated by the Court of Chancery as an
adjunct to the equitable remedy of an injunction. There is an obvious risk of
unfairness to a respondent against whom an interlocutory injunction is ordered at a time
when the issues have not been fully determined and when usually all the facts have not
been ascertained. The order might subsequently prove to have been wrongly made but in B
the meantime the respondent by reason of compliance with the injunction may have
suffered serious loss from which he will not be compensated by the relief sought in the
proceedings. The risk of such injustice is the greater when the interlocutory
injunction has been granted ex parte. The risk is particularly great with Mareva
injunctions, granted as they are almost invariably ex parte, and frequently imposing C
severe restrictions on the respondents’ right to spend their money or otherwise
dispose of their assets: such injunctions can have the effect of ruining a thriving
business or of otherwise causing substantial loss to the respondent and were vividly
described by Donaldson LJ in Bank Mellat v Nikpour (1985) 2 FSR 87 at 92 as
being, with the Anton Piller order, one of the law’s ‘two nuclear weapons’. The courts
are properly concerned lest these weapons are used inappropriately and the undertaking D
in damages provides a salutary potential deterrent against their misuse.
The usual form of undertaking (which was in substance that given by the building
society in the present case) is — ‘to abide by any order which this court may make
as to damages in case this court shall be of the opinion that the respondent shall have
suffered any by reason of this order which the applicant ought to pay’. E
The form of the undertaking indicates that the court has a discretion whether to
enforce it at all and that discretion is not limited in any way. The power to enforce
the undertaking being incidental to the power to grant an injunction (see Re
Hailstone (1910) 102 LT 877 at 880), the discretion will be exercised in accordance
with ordinary equitable principles (see, for example, Spry Equitable Remedies (4th F
Ed, 1990) pp 638– 645). The undertaking is given to the court and not the respondent,
who can ask the court to enforce it but has no right to its enforcement or any right to
damages until the discretion is exercised in his favour and damages are awarded.
The law was stated by Lloyd LJ (with whom Stocker LJ and Sir George Waller
agreed) in Financiera Avenida v Shiblaq [1990] CA Transcript 973 thus: G
Two questions arise whenever there is an application by a defendant to enforce a
cross-undertaking in damages. The first question is whether the undertaking ought
to be enforced at all. This depends on the circumstances in which the injunction was
obtained, the success or otherwise of the plaintiff at the trial, the subsequent conduct
of the defendant and all the other circumstances of the case. It is essentially a question H
of discretion. The discretion is usually exercised by the trial judge since he is
bound to know more of the facts of the case than anyone else. If the first question
is answered in favour of the defendant, the second question is whether the defendant
has suffered any damage by reason of the granting of the injunction. Here ordinary
principles of the law of contract apply both as to causation and as to quantum I
(per Lord Diplock in F Hoffmann-La Roche & Co AG v Secretary of State for Trade
and Industry [1974] 2 All ER 1128 at 1150; [1975] AC 295 at 361) … In a
simple case the trial judge may be able to deal with causation and quantum
himself as soon as he has exercised his discretion. But in a more complicated case
it may be necessary for him to order an inquiry as to damages either before
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 397

A himself, or before some other judge or before the master or registrar. Very
occasionally he may find it necessary to leave over the exercise of the discretion’.
(Emphasis added.)

[42] The above principle was adopted and applied by the Federal Court in
B
GS Gill Sdn Bhd v Descente Ltd [2010] 4 MLJ 609.

[43] Whilst I accept the fact that the undertaking as to damages was given to
the court and not to Star Media and so the court retains the absolute discretion
C whether or not to enforce the undertaking, the plaintiff has not shown why its
undertaking given to the court should not be enforced. Bearing in mind that a
breach of the undertaking attracts the remedy available for contempt, it has not
been shown here how it would be inequitable for the undertaking not to be
enforced.
D
[44] In F Hoffmann-La Roche & Co AG and others v Secretary of State for Trade
and Industry [1974] 2 All ER 1128, Lord Diplock stated:
The court has no power to compel an applicant for an interim injunction to furnish
an undertaking as to damages. All that it can do is to refuse that application if he
E declines to do so. The undertaking is not given to the defendant but to the court
itself. Non-performance of it is contempt of court, not breach of contract, and attracts the
remedies available for contempt; but the court exacts the undertaking for the
defendant’s benefit. It retains a discretion not to enforce the undertaking if it considers
that the conduct of the defendant in relation to the obtaining or continuing of the
F injunction or the enforcement of the undertaking makes it inequitable to do so …
(Emphasis added.)

[45] Seeing that the undertaking as to damages from the applicant of an

injunction is the ‘price the applicant must pay’ for the granting of such
G injunction, there is no cogent reason shown as to why the applicant here should
not be held to its undertaking. See: SmithKline Beecham plc and others v Apotex
Europe Ltd and others [2006] 4 All ER 1078. After all the purpose of the
undertaking as explained by the Federal Court in GS Gill Sdn Bhd v Descente
Ltd [2010] 4 MLJ 609 is to mitigate the ‘obvious risk of unfairness to the
H respondent against whom an interlocutory injunction is ordered at a time
when the issues have not been fully determined and when usually all the facts
have not been ascertained’.

[46] The relevant dates for the undertaking would be when the ad interim
I injunction was in force from 26 February 2018 until 12 July 2018 and the ad
interim Erinford from 17 July 2018 till 23 July 2018.

[47] The plaintiff submitted that the enforcement of its undertaking as to

damages ought not to be enforced because the ad interim injunction and the ad
398 Malayan Law Journal [2020] 10 MLJ

interim Erinford were correctly granted. The ad interim injunction and ad A

interim Erinford had lapsed or terminated upon the dismissal of the OSs and
the dismissal of the inter parte Erinford. There were no findings by the High
Court that the injunction was wrongly granted.

[48] It must be remembered that in the present case there was no ex parte B
application made but rather an ad interim injunction pending its hearing inter
partes in the OSs. In RIH Services (M) Sdn Bhd v Tanjung Tuan Hotel Sdn
Bhd [2002] 3 MLJ 1, the Court of Appeal was dealing with an ex parte
injunction that had not been applied to be set aside. It observed at pp 8–9 as
C
follows:
However, if the defendant wants to set aside the ex parte order, the defendant is at
liberty to file an application for that purpose. It is at the hearing of that application
that the court should decide whether to set it aside or not, if it has not lapsed. If, in
the meantime, the ex parte order has lapsed, the court should nevertheless hear the D
application, not for the purpose of setting it aside or not, because it has lapsed, but for the
purpose of determining whether that ex parte order should or should not have been made
in the first place. This is necessary in order to determine whether damages should be
awarded or not …
The learned judge also made an order that the appellant makes good its undertaking as E
to damages. Again, with respect, for the same reasons given in the preceding paragraph,
such an order should not have been made. The fact that an ex parte order lapses
automatically after 21 days does not mean that the defendant is automatically
entitled to damages. The question is should the ex parte order have been made at all?
Only if it should not, then the order for assessment of damages should be made. That has
not been decided. There was not even an application for that purpose. (Emphasis added) F

[49] Therefore the principle of having to set aside an ex parte injunction first
before an assessment of damages may be made has no application in the present
case. G

[50] Likewise the Court of Appeal in Middy Industries Sdn Bhd & Ors v
Arensi-Marley (M) Sdn Bhd [2013] 3 MLJ 511 followed the same approach as
follows:
[22] In order to enforce the said undertaking as to damages, the ex parte order in H
question must first be discharged or set aside by the court. The appellants should have
made an application to that effect to the court. Such an application is essential for the
purpose of determining whether the said ex parte order should or should not have
been made in the first place. If the answer is in the negative, then such
determination is essential to determine the issue of assessment of damages to be I
awarded to the other party who has suffered such damages. The appellants, without
putting forward any application to discharge or set aside the ex parte order must have
accepted that the said order was properly taken out. When this is so, they must be excluded
from claiming damages for the period when it existed (see Elias bin Mooin & Anor v
Dato’ Zainal bin Abidin Johari [1997] 5 MLJ 359; [1997] 3 CLJ 455).
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 399

A [23] Learned counsel for the appellants complained that it took almost a year since
the respondent (the plaintiff ) obtained the ex parte injunction order on 14 May
2002 till the time when the inter parte application for injunction was finally
dismissed on 28 April 2003; and it would be a serious miscarriage of justice if the
appellants (the defendants) upon being victorious in the interlocutory inter parte
B injunction stage as well as the trial proper, is prohibited from enforcing the
undertaking given by the respondent (the plaintiff ).
[24] The question of ‘serious miscarriage of justice’ does not arise if the appellants
(the defendants) had taken the correct steps in enforcing the said undertaking as to
damages as stated in the earlier ex parte order on the ground that the ex parte order
C was wrongly granted or it should not have been granted at all in the first place.
(Emphasis added.)

[51] See also the Court of Appeal case of Soo Boon Siong @ Saw Boon Siong
v Saw Fatt Seong and Soo Hock Seang (as estate representative Soo Boon Kooi@
D Saw Boon Kooy (deceased)) & Ors [2008] 1 MLJ 27. Learned counsel for the
plaintiff said that the principle applicable by extension is that the defendant
Star Media should have applied for the ad interim injunction and the ad
interim Erinford granted to be set aside.
E
[52] However there is a flaw in that reasoning as the whole purpose of an
interim injunction and an ad interim Erinford is to maintain the status quo
until the injunction application may be heard after the parties have exhausted
their affidavits. Imagine for a moment that Star Media must apply to set aside
F the ad interim injunction; that would entail the application to be heard first
and before that could be heard another ad interim injunction would have to be
granted to preserve the status quo.

[53] The arguments and applications for an ad interim injunction would go

G on ad nauseam for if the defendant consent to the application on ground of
expediency as administratively the affidavits could not be exhausted in a day,
then they cannot be seen to be applying to set aside the ad interim injunction
and if they object to it, then the defendant would be seen to be unduly difficult
and in any event the court would for expediency grant it subject to the
H undertaking of the plaintiff until the application is heard inter partes. It would
be a case of ‘head I win’ and ‘tail you lose’ kind of argument! The same would
apply to an ad interim Erinford injunction.

I [54] The fact that the court grants the ad interim injunction is precisely
because the application cannot be heard immediately as both parties would
need to file their affidavits; the defendant in opposition and the plaintiff in
reply.
400 Malayan Law Journal [2020] 10 MLJ

[55] It must not be forgotten for a moment that when the ad interim A
injunction was granted the merits of the application had not been considered
yet — it is only for maintaining the status quo pending the hearing proper inter
partes of the injunction application.

[56] It is precisely for this reason that the undertaking is exacted of the B
plaintiff so that any losses suffered by the defendant may be made good by the
plaintiff who had asked for the ad interim order until the opportune time to
hear the OSs on the merits.
C
[57] In RIH Services (M) Sdn Bhd v Tanjung Tuan Hotel Sdn Bhd at p 7 the
Court of Appeal observed as follows with respect to an application for an ex
parte injunction which had not been heard inter partes yet:
Bear in mind that the application was still before him, alive and pending. He clearly
had the jurisdiction to consider whether or not to grant an ad interim injunction D
pending the hearing inter partes of the application. From my own experience, quite
often parties would agree to such an order or the defendant would give an undertaking
to maintain the status quo pending the hearing of the application inter partes. But even
if they do not agree, the court has the jurisdiction to make such an order. (Emphasis
added.) E

[58] I find no merits in the plaintiff ’s argument that Star Media cannot move
this court for the plaintiff ’s undertaking to pay damages to be enforced merely
because Star Media had not applied for the ad interim injunction to be set
aside. The whole purpose of the undertaking given by the plaintiff is precisely F
because the application cannot be heard immediately and the plaintiff itself
had asked for an ad interim injunction against their undertaking to pay
damages for any losses that Star Media may suffer arising out of the ad interim
injunction.
G

[59] To interpret otherwise would be to render the undertaking ineffectual

and toothless as invariably the court would grant an ad interim injunction until
the matter can be heard inter partes and if the plaintiff argument is correct,
then it would be a carte-blanche for the plaintiff to do so with impunity and H
immunity against any and all claims for damages when the injunction
application is finally dismissed on the OSs applications as here!

Whether there is a need for a finding from the court that the ad interim injunction
was wrongly granted I

[60] There is no need for the court to make a finding that the ad interim
injunction and ad interim Erinford was wrongly or incorrectly granted. That is
because of the very nature of the ad interim orders which were given pending
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 401

A the hearing proper of the applications for the injunctions, to preserve status
quo and without delving into the merits of the applications as yet.

[61] It is different from an ex parte application where the requirements of a

full and frank disclosure as well as any facts that may cause the court not to
B grant the injunction has to be clearly set out as required under O 29 r 1(2A) of
the Rules of Court 2012. The plaintiff applicant is required to state ‘any answer
by the other party (or which he is likely to assert) to the claim or application’ by
reason of O 29 r 1(2A)(d) of the Rules of Court 2012. The plaintiff should also
C
disclose to the court ‘any facts which may lead the Court not to grant the
application ex parte or at all’ by reason of O 29 r 1(2A)(e) of the Rules of Court
2012.

[62] It cannot be just because the ad interim injunctions were granted by the
D court then the plaintiff cannot be made to honour its undertaking in paying
damages to the defendant Star Media.

[63] To hold otherwise would require a party like the defendant here to have
to appeal against the ad interim injunction whilst awaiting the inter partes
E hearing of the applications for the injunction and the Erinford injunctions.
Such a proposition only needs to be stated to be dismissed for its absolute
absurdity and impracticability.

Whether the applications for assessment of damages pursuant to the undertaking

F given by the plaintiff is premature

[64] The plaintiff submitted that on 6 March 2018, its previous solicitors
had issued a notice of arbitration to Star Media. Star Media via their solicitors
G had then replied on 8 March 2018. However to date the arbitration has not
progressed beyond the plaintiff ’s proposal of the names of arbitrators to
constitute the arbitration tribunal.

[65] The plaintiff further submitted that the delay was because Star Media
H has not responded to its proposed arbitrators named. Surely that cannot be a
good reason for not proceeding will all due diligence with the arbitration for
another party’s lack of response cannot effectively stall an arbitration unless the
agreement to arbitrate is so vague as to fail to provide for the relevant rules
under which the arbitration is to be held.
I
[66] Granted that the OSs herein were initiated pursuant to s 11 of the
Arbitration Act 2005 allowing parties to apply for any interim measure at the
High Court. The courts at all levels had decided that in respect of the issue of
the call on the bank guarantee, there is nothing unconscionable about it.
402 Malayan Law Journal [2020] 10 MLJ

[67] In the absence of fraud or unconscionability the demand on the bank A

guarantees must be allowed for otherwise the instrument of a bank guarantee
would be meaningless and not worth the paper it is written on where
commercial certainty is concerned.

[68] It is true that the courts did not make any decision on the underlying B
dispute between the parties vis a vis whether there was a breach of the sale and
purchase agreement dated 19 August 2011 (‘SPA’). That is because that issue is
not relevant for the purpose of determining the validity of the call on the bank
guarantee. That issue would have to be decided at the arbitration but in the C
meanwhile if the plaintiff has not shown unconscionable conduct on the part
of Star Media, then the demand on the bank guarantee is valid and the sums
guaranteed would have to be released.

[69] It has often been said that the instrument of an irrevocable, D

unconditional on-demand bank guarantee is a method the parties have agreed
with respect to apportioning risk when a dispute should arise as it has invariably
arisen in this case under the SPA. This vehicle of an unconditional on demand
bond as an instrument of risk allocation was observed in the Australian case of
Clough Engineering Limited v Oil and Natural Gas Corporation Limited [2008] E
FCAFC 136 as follows:
57. His Honour considered that a commercial object of the performance bank
guarantees under the Contract was to allocate the risk of a party being out of pocket
pending the resolution of a dispute and that ONGC was entitled to call upon them
even where a genuine dispute existed as to whether or not Clough was in breach and F
whether or not damage had been suffered ...
...
76. Reference was made in Wood Hall Ltd 141 CLR 443 to the commercial purpose
of the guarantees, which in that case was that they be equivalent to cash: see Barwick G
CJ (at 445); Gibbs J (at 453); Stephen J (at 457–458).
As Stephen J observed, to introduce a qualification on the entitlement of the owner
to call upon the performance guarantees (at 457): ... would be to deprive them of the
quality which gives them commercial currency.
H
......
79. In Fletcher Construction [1998] 3 VR 812, Charles JA at 821 and Callaway JA
at 826 recognised that there are generally two commercial reasons why a beneficiary
of a performance guarantee may have stipulated for such an entitlement. One is to
provide security for a valid claim against the contractor. The second, which is I
additional to the first, is to allocate the risk between the parties as to who shall be out of
pocket pending the resolution of a dispute between them. Callaway JA went on to
observe that it is a question of construction of the underlying contract whether the
guarantee is provided solely by way of security or also as risk allocation device. He
went on to say (at 827):
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 403

A Remembering that we are speaking of guarantees in the sense of standby letters

of credit, performance bonds, guarantees in lieu of retention moneys and the
like, the latter purpose is often present and commercial practice plays a large part
in construing the contract. No implication may be made that is inconsistent with an
agreed allocation of risk as to who shall be out of pocket pending resolution of a dispute
B and clauses in the contract that do not expressly inhibit the beneficiary from calling
upon the security should not be too readily construed to have that effect. As I have
already indicated, they may simply refer to the kind of default which, if it is
alleged in good faith, enables the beneficiary to have recourse to the security or
its proceeds.
C 80. It seems to us that his Honour’s reference to a default ‘alleged in good faith’ was
intended to embrace the first exception we have set out above. That is to say, the
breach relied upon to support a call on the performance guarantee must not be
asserted fraudulently because the Court will enjoin a party from so acting. Thus,
subject to the exceptions of fraud and unconscionability, the beneficiary of a performance
D guarantee granted in its favour as a risk allocation device, will be entitled to call upon the
guarantee even if it turns out, ultimately, that the other party was not in default: Fletcher
Construction [1998] 3 VR at 827. (Emphasis added.)

[70] See generally Gumusut-Kakap Semi-Floating Production System (L) Ltd v

E Sabah Shell Petroleum Co Ltd [2017] MLJU 877; [2017] 1 LNS 945

[71] It is for the parties to sort out the final accounting at the arbitration
where all issues in the dispute would be fully ventilated. The sum of RM50m
F would have to be accounted for in the final accounting taking into
consideration the arbitration tribunal’s final award on the respective heads of
claims and counterclaims of the parties.

[72] There is no justification for postponing the assessment of damages until

G the outcome of the arbitration is realised for to do so would set a dangerous
precedent that there is no pain in providing an undertaking to make good losses
suffered by the defendant until the final outcome is realised.

[73] That can only embolden the party applying for an injunction to
H painlessly proffer the undertaking knowing that for all practical purposes the
court would buy the argument that the assessment should wait.

[74] Whilst the court would retain its discretion with respect to when the
I
assessment should be done, in the absence of special circumstances there is no
cogent reason to refuse the assessment when the plaintiff has taken the
defendant from the High Court to the Court of Appeal and right up to the apex
Federal Court over the issue of payment to be made pursuant to a demand for
payment on an irrevocable, unconditional and on demand bank guarantee.
404 Malayan Law Journal [2020] 10 MLJ

[75] The Federal Court in GS Gill gave some guidance on the exercise of A
discretion with respect to assessment of damages pursuant to an undertaking to
pay damages in a case where the applicant had failed to obtain the injunction
as follows:
[32] Based on these authorities, it is our considered opinion that whether an inquiry B
as to damages should be ordered lies with the discretion of the trial judge. It is not
for the defendant to insist that such inquiry should be made. The undertaking to
damages for an interlocutory injunction is given to the court and not to the
defendant. The trial judge is the best equipped to decide on whether to order an
inquiry as to damages since he has an adequate knowledge of the facts of the case. He
C
is even allowed to defer the exercise of this discretion until the end of the trial — see
Financiera Avendia v Shiblaq (unreported, 7 November 1990). As a general rule, if an
interlocutory injunction is wrongly granted, the trial judge should make an order for
inquiry to damages on the undertaking given by the plaintiff for the interlocutory
injunction. But if there are special circumstances, the trial judge can exercise his
discretion to refuse ordering such inquiry. The special circumstances disclosed by D
Sir Peter Gibson LJ in Cheltenham & Gloucester Building Society v Ricketts can be
adopted as a guide but these are not exhaustive. Much depends on the facts and
circumstances of each case.

E
[76] There are no special circumstances here and if at all, only circumstances
justifying an assessment of damages based on the conservative method of the
interest which Star Media would have earned if the bank guarantee sum had
been obtained soon after the call on the banks to pay until after the plaintiff had
exhausted all avenues of appeal and the guarantee sum was then released to Star F
Media.

[77] The fact that the final outcome of the arbitration may very well be in
favour of the plaintiff where Star Media is ordered to repay back the bank
guarantee sum it had earlier received, would not qualify to be a special G
circumstance.

[78] Going by the above test that the plaintiff sought to prevail upon and
persuade this court, there would effectively be no assessment of damages until
the disposal of the arbitration. That would not engender confidence of the H
business community in relying on bank guarantees as an instrument to allocate
risks in the event of a dispute.

[79] In future the party affected might as well insist on cash payment or
retention for a bird in the hand would be worth two in the bush! The I
instrument of a bank guarantee was agreed upon by the parties as a halfway
house where the beneficiary of the bank guarantee has the assurance of
payment for default by the obligor and at the same time the obligor performing
the works has the requisite cash flow from the works done.
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 405

A [80] The plaintiff was pursuing its appeals through every tier of the appellate
process and the parties had agreed that any assessment should be after all
avenues of appeal has been exhausted. That should not now be stretched to
until the disposal of the arbitration.
B [81] The defendant Star Media is within their legal right to apply for
assessment of damages without waiting for the outcome of the arbitration,
acting as it did within the guidelines provided by the Court of Appeal in Goo
Sing Kar v Dato’ Lim Ah Chap & Ors [2013] 3 MLJ 374 as follows:
C [15] And according to Plowman J in Ushers Brewery Ltd v PS King & Co (Finance)
Ltd [1972] Ch 148 at p 154C, the undertaking becomes enforceable by way of an
inquiry as to damages in the following sets of circumstances:
(a) when the plaintiff has failed on the merits at the trial; or
D (b) when it is established before trial that the injunction ought not to have been
granted in the first place; or
(c) when it is established, after trial, by an unsuccessful defendant, that the
injunction ought not to have been given. (Emphasis added.)

E
[82] Here it has been established through every tier of appeal that the
injunction applications in the OSs dismissed by the High Court was rightly
decided and the decision was affirmed in the Court of Appeal and by the
Federal Court when it dismissed the leave application. It is an affirmation that
F the ad interim injunction and the ad interim Erinford injunction ought not to
have been granted in the first place.

[83] There is thus nothing premature but everything proper for Star Media
to apply for assessment of damages pursuant to the plaintiff ’s undertaking
G given to the High Court.

Whether the defendant Star Media had proved any losses arising out of the ad
interim injunction and ad interim Erinford orders

H [84] The plaintiff submitted that the interim injunction and interim
Erinford were sought in good faith to maintain status quo and to preserve the
substratum of the OSs and the appeals that has been filed. It was not intended
to prejudice or cause any hardship on Star Media.
I
[85] Whilst that may be so, the unintended consequences clearly apparent to
the plaintiff, would be that Star Media had been deprived of the use of a
substantial sum of RM50m. Surely it cannot be seriously argued that it is no
loss to the defendant if the said substantial sum is released a year later but that
406 Malayan Law Journal [2020] 10 MLJ

if it had been released earlier at the point when the injunction was first refused A
in the High Court, the plaintiff would suffer loss.

[86] Somehow the equation does not add up; the fact that the bank
guarantee sum of RM50m is not released would mean that the plaintiff does
not have to service any interest in the said sum until it is released and the fact B
that the defendant had been prevented from receiving the said sum would
mean that it would be deprived of the interest which it could have earned had
it received the said sum and put the same in fixed deposit at least. The plaintiff ’s
gain is the defendant’s loss; one is the flip side of the other. Thus the plaintiff
cannot be flippant about the defendant’s loss but be fastidious when it comes to C
its own gain.

[87] It is only too obvious that the plaintiff ’s gain in saving on interest on the
said sum not released would be the defendant’s loss in being deprived of the
interest which it could have earned. Of course the interest rates would differ D
depending on the banks involved and the security that was put up by the
plaintiff for the issuance of the bank guarantees.

[88] Star Media is not claiming for what it could have gained had it put the
E
said substantial sum into some investments. In any event it had not given the
plaintiff notice that it was going to do so to alert the plaintiff as to the loss that
it would suffer for which the plaintiff would be held liable.

[89] Rather Sun Media is claiming merely based on what it would F

conservatively have earned from interests for the said sum in their accustomed
rates with their banks.

[90] I see no good reason why Sun Media should be deprived of this use of
the said sum that it is entitled to have been paid some one year earlier had it not G
been for the ad interim injunction and the ad interim Erinford injunction.
After all interest is paid for precisely the reason of delay in getting the sum that
one is legally entitled. In P Aker Flowerbulbs Pty Ltd v Coulter [2004] 212 ALR
606 the Federal Court of Australia held that there is no reason why a judgment
creditor should be deprived of interest that would otherwise automatically H
accrue from the time that judgment was entered merely because the judgment
debtor has been granted a stay of execution.

[91] By the same token there is no good reason why the defendant should be
deprived of interest that it would otherwise have earned had it not been for the I
ad interim injunction and the ad interim Erinford injunction.

[92] In Jones and others v Secretary of State for Energy and Climate Change and
another [2014] 3 All ER 956 the Court of Appeal in UK held that the payment
 Jaks Island Circle Sdn Bhd v Star Media Group Bhd & Anor
[2020] 10 MLJ (Lee Swee Seng J) 407

A of interest was contingent on the claim being successful and thus the liability to
pay interest crystallised when the claim was successful. Here the defendant has
been successful at the hearing of the OSs to show to the High Court that the
bank guarantee sums ought to be released and this had been affirmed by the
Court of Appeal and by the Federal Court as further leave to appeal to the
B Federal Court had been refused by the Federal Court.

[93] Star Media’s practice with respect to prudent stewardship of huge sums
received, as stated in its affidavit is that these would be put in cash funds
account schemes with RHB Bank Bhd.
C

[94] Star Media had affirmed an affidavit to state and show how finally when
the sum of RM50m was received it had placed the sum in two tranches of
RM807,593.94 with RHB Cash Management Fund 1 with RHB Bank and
D RM 788,735.71 with RHB Bank Islamic Cash Management Fund and earning
interest at the rate of 3.74%pa and 3.66%pa respectively.

[95] Clearly the assessment of damages here based on the interest that Star
Media would have earned is neither too far-fetched nor fanciful but every bit
E foreseeable and fair.

[96] Even in cases where calculation of damages would be more difficult to

be carried out with certainty and precision, ‘the damages for the lost
opportunity were assessable’ as evidenced in the case of Les Laboratoires Servier
F and another v Apotex Inc and others (No 2) [2009] IP & T 600 , where the High
Court dealt with an application to enforce the undertaking given by the
plaintiff in obtaining an injunction to prevent the defendant from entering a
new market for the sale of generic medicine. The UK High Court observed as
follows at pp 606–607:
G
(15)(e) The fact that certainty or precision is not possible does not mean that a
principled approach cannot be attempted. The profits that Apotex would have
made from its exploitation of the opportunity to sell generic perindopril depend in
part upon the hypothetical actions of third parties (other potential market
participants) and in part upon Servier’s response to them. A principled approach in
H
such circumstances requires Apotex first to establish on the balance of probabilities
that the chance of making a profit was real and not fanciful: if that threshold is
crossed then the second stage of the inquiry is to evaluate that substantial chance
(see Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907; [1995] 1
WLR 1602). As Lord Diplock explained in Mallett v McMonagle [1969] 2 All ER
I 178 at 191; [1970] AC 166 at 176:
… in assessing damages which depend on its view as to what… would have
happened in the future if something had not happened in the past, the court must
make an estimate as to what are the chances that a particular thing … would have
happened and reflect those chances, whether they are more or less than even, in the
408 Malayan Law Journal [2020] 10 MLJ

amount of damages which it awards. (Emphasis added.) A

PRONOUNCEMENT AND DECISION

[97] The plaintiff said the rate of interest, if this court is not with them,
B
should be the Maybank’s rate of 3.15%pa which is its fixed deposit rate whereas
the defendant Star Media said it should be based on its RHB better rates
because of the type of instrument in their normal course of business called the
cash management fund that attracted a rate of 3.74%pa.
C
[98] The court noted that the parties had left to the court to exercise its
discretion with respect to the interest rate to be used. The court applied the rate
of 3.5%pa as reasonable in the circumstances of the case.

[99] Here there is no ex parte injunction applied for but there was ad interim D
injunction granted on 26 February 2018 and extended until the disposal of the
OSs.

[100] The relevant period is 28 February 2018 which is the date that the
banks would have paid under the bank guarantees after the calls were made on E
15 February 2018.

[101] I had therefore allowed the period from 28 February 2018 (the date the
defendant Star Media would have received the guarantee sum if not for the
injunction) to 9 January 2019 (the date after the dismissal of leave by the F
Federal Court to appeal to it ie 7 January 2019 and the latter date being the date
the defendant actually received the monies) as the relevant period for the
calculation of the interest.

[102] The amount calculated for the sum of RM25m for the relevant period G
is RM757,534.25 for each of the OS 11 and the OS 12.

[103] I also ordered costs of RM5,000 per application to the defendant Star
Media.
H
Order accordingly.

Reported by Dzulqarnain Ab Fatar

I