Grand Dynamic Builders Sdn Bhd v KSK Land Sdn Bhd
Catchwords
CONTRACT LAW — Corporate guarantee issued by holding company of developer in favour of main contractor as security for rescheduling of payment obligations — Enforcement of on-demand corporate guarantee — Whether a corporate guarantee issued by a parent/holding company in favour of a main contractor may constitute an unconditional and on-demand instrument notwithstanding that the guarantor is not a financial institution — Whether Clause 2.1(b) of the Guarantee, read with Clauses 2.2 and 2.4, creates an independent and primary payment obligation triggered solely upon a written demand, or a secondary and contingent obligation requiring prior proof of the principal debtor's liability — Whether the phrase "due and owing" in Clause 2.1(b) imports a condition precedent to payment requiring the beneficiary to first establish the principal debtor's liability Guarantee CONSTRUCTION LAW — Whether the independence/autonomy principle applicable to on-demand guarantees and performance bonds precludes the guarantor from invoking Clause 25.4(d) of the PAM Contract 2006 (With Quantities) as a defence to its payment obligations under the Guarantee — Whether a holding company guarantor may rely upon the contractual rights, defences, set-offs and withholding provisions of its subsidiary (as principal debtor) under the underlying construction contract to resist payment under an on-demand guarantee — Whether the Prevention and Control of Infectious Diseases Act 1988 (COVID-19 Act) applies to suspend a guarantor's monetary payment obligations under an on-demand corporate guarantee — Whether the COVID-19 Act defence available (if any) to the principal debtor in the underlying construction contract proceedings may be transmitted to or relied upon by the guarantor under a separate and independent guarantee instrument — Whether late payment interest accruing under Clause 30.17 of the PAM Contract 2006 forms part of the "sum due and owing" recoverable by the beneficiary under an on-demand corporate guarantee
Practice Areas
Judges (1)
Judgment
Read the full judgment on the official Malaysia Courts portal.
Read on eJudgmentSource: eJudgment (wa-22c-32-05-2023)