1. ) KHEE SAN BERHAD 2. ) KHEE SAN FOOD INDUSTRIES SDN BHD 3. ) KHEE SAN MARKETING SDN BHD 4. ) MEGA GLOBAL CONFECTIONARY SDN BHD PENCELAH 1. ) TUNAI IMPIAN ENTERPRISE SDN BHD 2. ) HSBC Bank Malaysia Berhad 3. ) Alliance Bank Malaysia Berhad 4. ) DATO' ADAM PRIMUS VARGHESE BIN ABDULLAH (PENGURUS KEHAKIMAN INTERIM TERDAHULU BAGI KHEE SAN FOOD INDUSTRIES SDN BHD)

wa-24ncc-1067-12-2022 High Court (Mahkamah Tinggi) 19 January 2025 • WA-24NCC-1067-12/2022

Catchwords

Issue 1 - whether a court can set aside an earlier court order which had approved a scheme of arrangement under section 366(3) and (4) of the CA 2016-2 schools of thought in relation to Court’s jurisdiction post a sanction order-The first school of thought is - the court cannot alter the substance of the scheme save in cases of obvious mistakes or fraud-The second school of thought is - a sanction order operates as an order of court. The Court may make any order subsequent to the sanction order under its inherent jurisdiction if the sanction order does not represent the true intention of the actual order or under the slip rule-the English approach but subject to the added supervisory powers vested”-section 366[3] and [4] of the CA 2016-“the English approach”-“the Australian approach”-The court has no power expressly granted to it under section 366 to amend or add any new terms to a scheme of arrangement that had been approved by the court under section 366[3] and [4] of the CA 2016-Likewise, there should be no implied power under common law or the Rules of Court 2012 to amend or add any new terms to a scheme of arrangement that had been approved by the court under section 366[3] and [4] of the CA 2016. This is because the court cannot alter the substance of the scheme and impose upon the scheme creditors an arrangement to which they had not agreed to in the first place-A further reason for this approach is that a scheme of arrangement that had been approved by the court must have finality. Scheme creditors like trade creditors and financial institutions must be able to act on the terms of a scheme of arrangement without fear that the terms may be varied or altered subsequently by the court-the court can only set aside Scheme E if consent to the scheme was obtained by fraud or where there are obvious mistakes in the documents setting out Scheme E-It is trite law that the court will not assist any party who is privy to illegality-It is trite that the court will not condone or lend its hand to a party who takes advantage of its own wrongdoings and comes to court without clean hands-if Tunai relies on fraud to set aside Scheme E, it has to file a new suit and make all scheme creditors and the applicants here as defendants. This is because all parties affected by a court order must be made parties to the suit-allegation of a total failure of consideration is not a ground to set aside Scheme E-Section 369D of the CA 2016-Under section 369D [1], the court has the power, upon application by a company or creditor bound by the scheme of arrangement approved by the court under section 366[4], to clarify any terms of such scheme-Under section 369D [2], where the court is satisfied that the scheme company has committed an act or omission, or made a decision, that results in a breach of any terms of the arrangement, the Court may, on an application of any creditor bound by the arrangement confirm, reverse or modify the act, omission or decision of the company or give such direction or make such order as the Court thinks fit to rectify the act, omission or decision of the company-Tunai is estopped from setting aside Scheme E having failed to disclose the Secret Deal to the scheme creditors and disclose to the court the Secret Deal when the court was asked to grant the Sanction Order-

Practice Areas

Issue 1

Judges (1)

Leong Wai Hong Delivered

Parties (8)

ALLIANCE BANK MALAYSIA BERHAD Intervener DATO' ADAM PRIMUS VARGHESE BIN ABDULLAH (PENGURUS KEHAKIMAN INTERIM TERDAHULU BAGI KHEE SAN FOOD INDUSTRIES Sdn Bhd) Intervener HSBC BANK MALAYSIA BERHAD Intervener KHEE SAN BERHAD Applicant KHEE SAN FOOD INDUSTRIES Sdn Bhd Applicant KHEE SAN MARKETING Sdn Bhd Applicant MEGA GLOBAL CONFECTIONARY Sdn Bhd Applicant TUNAI IMPIAN ENTERPRISE Sdn Bhd Intervener

Case Significance

1. ) KHEE SAN BERHAD 2. ) KHEE SAN FOOD INDUSTRIES SDN BHD 3. ) KHEE SAN MARK... is a High Court (Mahkamah Tinggi) decision dated January 19, 2025 (citation: wa-24ncc-1067-12-2022). The case was decided by Leong Wai Hong.

What was the outcome of 1. ) KHEE SAN BERHAD 2. ) KHEE SAN FOOD INDUSTRIES SDN BHD 3. ) KHEE SAN MARK...?

1. ) KHEE SAN BERHAD 2. ) KHEE SAN FOOD INDUSTRIES SDN BHD 3. ) KHEE SAN MARK... is a High Court decision dated January 19, 2025. The case was heard by Leong Wai Hong. See the full judgment for details.