HIQ RESOURCES SDN BHD v 1. ) LIONG SHAN GROUP SDN BHD 2. ) ADVANTAGE COMMON SDN BHD

Case Significance

Illustrates the grant of an interlocutory injunction to protect an exclusive takeover agreement, where there is a serious question to be tried, damages would be inadequate, and the balance of convenience favours preserving the status quo pending trial.

This High Court decision at Temerloh, Pahang, concerns an application for an interlocutory injunction to protect the plaintiff's rights under an exclusive takeover arrangement pending the trial of the action. The plaintiff and the defendants had entered into a Perjanjian Pengambilalihan Eksklusif (Exclusive Takeover Agreement) dated 27 September 2024, supported by a Surat Aku Janji (Letter of Undertaking) dated 30 September 2024. The plaintiff applied for an injunction restraining the first defendant, whether by itself, its officers, employees, agents or representatives, from doing any act or omission that would result in the breach or cancellation of the Exclusive Takeover Agreement and the Letter of Undertaking, so as to preserve the position until the action was finally disposed of. The Court applied the established framework for an interlocutory injunction, considering whether there was a serious question to be tried, where the balance of convenience lay, and whether damages would be an adequate remedy. It was satisfied that there was a serious issue to be tried arising from the exclusive takeover arrangement, that the balance of convenience favoured the grant of the injunction to the plaintiff, and that the damages the plaintiff would recover if it ultimately succeeded in the action would be inadequate to compensate it for the harm threatened in the interim. Applying those considerations, the Court allowed the plaintiff's application for the interlocutory injunction with costs. The decision illustrates the courts' willingness to restrain, on an interlocutory basis, conduct that threatens to defeat the subject matter of an exclusive commercial agreement, where damages would not be an adequate remedy and the balance of convenience favours preserving the status quo until trial. The Court's approach shows that where a party has bargained for exclusivity under a takeover arrangement, interim relief may be needed to hold the ring, because conduct that pre-empts the transaction could render any eventual trial victory hollow and cannot readily be measured in money, which is why the inadequacy of damages weighed so heavily in the plaintiff's favour on the balance of convenience.