China National Technical Import & Export Corporation v. PJD Link (M) Sdn Bhd, Alliance Bank Malaysia Berhad and Bank of China (Malaysia) Berhad [2024] CLJU 1843
The plaintiff, a state-owned Chinese engineering firm, sought injunctive relief to restrain Alliance Bank from calling on a bank guarantee originally issued in favour of PJD Link (M) Sdn Bhd, the main contractor for the proposed Petaling Jaya Despersal Link Expressway project. The main contractor had assigned its rights under the bank guarantee to Alliance Bank as security for banking facilities related to the project. The plaintiff contended that the call was unconscionable, citing absence of any documentary evidence of contractual non-performance. The High Court agreed with Mr. Benjamin Dawson that the bank guarantee was intended to secure the banking facilities granted to the main contractor, and the plaintiff could not unilaterally and radically alter the unconditional bank guarantee as conditional. This marks the first reported Malaysian decision where the beneficiary of a bank guarantee was an assignee. The plaintiff’s appeal to the Court of Appeal and its application for leave to appeal to the Federal Court were both dismissed.
