Khee San Food Industries Sdn Bhd v Adam Primus Varghese Bin Abdullah

Case Significance

Applies the Fortuna-injunction doctrine: a company may restrain the presentation of a winding-up petition where the underlying debt is disputed in good faith on substantial grounds, so that presenting the petition would be an abuse of process apt to cause irreparable harm — here the court granted the injunction with RM10,000 costs.

This High Court decision at Kuala Lumpur (Commercial Division), delivered by Judge Dato' Indera Mohd Arief Emran bin Arifin, concerns an application for a Fortuna injunction — an order restraining a creditor from presenting a winding-up petition against a company. The plaintiff, Khee San Food Industries Sdn Bhd, sought to restrain the defendant from filing a threatened petition to wind up the company founded on a statutory notice of demand issued on 26 September 2024. The matter arose against the background of earlier judicial-management proceedings concerning the company. The central questions were whether there was a bona fide dispute of the alleged debt on substantial grounds, and whether the presentation of a winding-up petition in those circumstances would amount to an abuse of the process of the court that could cause irreparable harm to the company.

The court granted the injunction. Applying the principles that govern Fortuna injunctions — under which a company may restrain a winding-up petition where the petition is bound to fail or is an abuse of process, in particular where the debt on which it is founded is disputed in good faith and on substantial grounds — the court was satisfied that the debt was genuinely disputed and that permitting the threatened petition to proceed would be an abuse of process apt to cause irreparable damage to the plaintiff. Referring to authorities including Triterra Metropolis Sdn Bhd v Qingjian Holding Group (Malaysia) Sdn Bhd and Tan Kok Tong v Hoe Hong Trading Co Sdn Bhd, the court allowed the plaintiff's application with costs of RM10,000, fixed having regard to the seniority of counsel, the importance of the subject matter and the complexity of the claim. The judgment is a clear application of the Fortuna-injunction doctrine restraining the use of winding-up proceedings as a means of enforcing a bona fide disputed debt.