Majlis Amanah Rakyat (MARA) v SHABRI BIN SULONG

wa-22m-131-02-2024 High Court (Mahkamah Tinggi) 13 January 2026 • WA-22M-131-02/2024 • 16 min read

7 cases cited (0 SG, 7 foreign)

Catchwords

Civil Procedure — Res judicata — Cause of action estoppel — Issue estoppel — Earlier action dismissed as premature — No termination notice issued under facility agreement — Whether dismissal on procedural ground bars subsequent action after valid termination notice — Whether new cause of action accrued — Doctrine not absolute — Whether injustice would result if applied Contract — Islamic financing — Qardhul Hasan facility — Termination of facility — Condition precedent to enforcement — Requirement of termination notice before entire sum becomes due and payable — Failure to terminate in earlier action — Whether subsequent termination crystallised debt Contract — Breach — Failure to make instalment payments — Default admitted — Whether plaintiff entitled to recover full outstanding sum after valid termination Evidence — Certificate of indebtedness — Conclusive evidence clause — Computer-generated certificate — Whether authorised officer must be called — Whether defendant proved manifest error Practice and Procedure — Abuse of process — Whether second action following dismissal of first action is abusive — Whether plaintiff merely curing procedural defect identified by court Estoppel — Res judicata — Public policy — Finality of litigation — Whether court may decline to apply doctrine where injustice would result Islamic Banking — Qardhul Hasan — Benevolent loan — Enforcement after default — Interaction between Shariah-based facility and civil procedural requirements

Practice Areas

Civil Procedure Contract Islamic Banking & Finance Equity & Trusts

Judges (1)

Yusrin Faidz bin Yusoff Delivered

Counsel (7)

Azam Baba & Aqmar Firm Yusfarizal Aziz & Zaid Firm Amrah Binti Mohd Khairul Anuar Counsel Plaintiff Huzir Bin Shamsul Bahrin Counsel Defendant Mohd Munzeer Biin Zainul Abidin Counsel Plaintiff Nabilah Binti Din Counsel Plaintiff Nur Neena Chirani Binti Aqmar Hisham Counsel Defendant

Parties (2)

Majlis Amanah Rakyat Plaintiff Shabri bin Sulong Defendant

Case Significance

Illustrates that res judicata does not bar a fresh action where the earlier claim was dismissed on a procedural ground such as prematurity, and that a new cause of action accrues once a condition precedent — here a valid termination notice under a financing facility — is satisfied.

This High Court decision in the Commercial Division at Kuala Lumpur concerns the recovery of an Islamic financing facility and the reach of the doctrine of res judicata. The plaintiff, Majlis Amanah Rakyat (MARA), had in 2013 granted the defendant a RM5,000,000 benevolent loan structured on the Qardhul Hasan concept — an interest-free facility repayable in instalments — documented in a facility agreement and secured by a charge over shares and a deposit of a RM500,000 fixed deposit. The defendant, a director and major shareholder of a company, defaulted; the plaintiff issued demands, encashed the fixed deposit for RM629,853.07, but could not enforce the share charge as the company had ceased operations.

The plaintiff had earlier sued for the whole outstanding sum, but that first action was dismissed at trial: the court found the defendant had breached the agreement, yet held the plaintiff was not entitled to recover the entire sum because it had not first issued a termination notice, a condition precedent to the debt becoming due. After validly terminating the facility, the plaintiff commenced this second action. The defendant raised res judicata — both cause-of-action and issue estoppel — as a complete bar. The central question was whether a dismissal on a procedural ground (prematurity) barred a fresh action once the debt had properly crystallised.

The court held that res judicata is not an absolute or mechanical bar: the first dismissal turned on the action being premature, not on the substantive merits, and a new cause of action accrued when the plaintiff issued a valid termination notice. Relying on the Certificate of Indebtedness, which the defendant had not displaced by proof of manifest error, and on the defendant's own admissions of the agreement, default and arrears, the court entered judgment for the plaintiff in the sum of RM3,452,287.13, with interest at 5% per annum from the date of judgment and costs of RM25,000.00. The judgment illustrates that a claim dismissed as premature is not barred once the condition precedent is satisfied.

Did res judicata bar the lender's second action?

No. The court held that res judicata is not an absolute bar. The first action had been dismissed as premature — for want of a termination notice — rather than on the merits, and a fresh cause of action accrued once the lender validly terminated the facility and the debt crystallised. The second action was therefore not barred.

What judgment did the court enter?

The court entered judgment for the plaintiff for RM3,452,287.13, relying on the Certificate of Indebtedness which the defendant had not shown to be manifestly erroneous, together with interest at 5% per annum from the date of judgment and costs of RM25,000.00.

Cases Cited (7)

MY (7)

[1964] MLJ 49 [1995] 3 MLJ 189 [1998] 2 MLJ 613 [2006] 3 CLJ 544 [2016] 3 MLJ 122 [2019] 12 MLJ 164 [2023] 5 MLJ 422

Judgment

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Source: eJudgment (wa-22m-131-02-2024)