OASIS TEAM SDN BHD v 1. ) STAR LABS BIOSCIENCE SDN BHD 2. ) P'ng Aik Fong

Case Significance

Illustrates the recovery of a refund and agreed liquidated compensation for breach of a commercial agreement, the principle that unrebutted evidence may be presumed true, and that an interim injunction preserving the status quo will not be extended once the underlying agreement is terminated and damages are pleaded.

This High Court decision at Shah Alam concerns a claim for breach of a business agreement following a full trial. The plaintiff sued the first defendant company and its director, the second defendant, over a Business Corporation Agreement dated 13 August 2021 relating to a web-based training programme and assessment system owned and managed by the first defendant. Under an earlier oral arrangement the plaintiff had been granted an exclusive long-term right to use the products, and it made payments totalling RM500,000 towards a RM2 million consideration. When the parties later executed the written Business Agreement, it gave the plaintiff the worldwide right to use the products outside certain territories, subject to payment. The plaintiff alleged that the defendants breached the agreement and sought a refund of the RM500,000 already paid together with RM2 million in agreed compensation or liquidated damages.

The court identified the issues as whether the defendants had breached the Business Agreement and, if so, whether they had remedied the breaches, and whether the plaintiff was entitled to the refund and compensation claimed. It also noted that a party in contempt of court has no right to be heard until the contempt is purged, and that evidence which is not rebutted may be presumed to be true. On the plaintiff's largely unrebutted evidence, the court found the defendants in breach.

The court entered judgment ordering the defendants jointly and severally to refund the RM500,000 and to pay RM2 million as agreed compensation or liquidated damages, together with costs of RM30,000.00 and interest at 5% per annum from the date of judgment until full settlement. It declined to extend the interim injunction, holding that once the Business Agreement had been terminated and monetary damages pleaded, an injunction to preserve the status quo was unnecessary. The judgment illustrates the recovery of a refund and agreed compensation for breach of a commercial agreement.