Baskaran

On the court record

The firm's record illustrates the unconscionability exception that permits a court to restrain a demand on an autonomous on-demand performance bond, and the interim protective jurisdiction exercised in support of arbitration under section 11 of the Arbitration Act 2005.

Baskaran appears in the corpus as counsel in construction and arbitration-related litigation, argued in the High Court (Mahkamah Tinggi) and the Court of Appeal (Mahkamah Rayuan), with a focus on the enforcement of performance bonds.

The firm's reported work centres on a connected dispute between Pengerang Refining Company Sdn Bhd and Sinopec Engineering (Group) Co Ltd and its Malaysian subsidiary, arising from a large construction project. The firm appeared where one party had obtained an ex parte order, as an interim measure under section 11 of the Arbitration Act 2005, restraining a demand under a performance bond, and the other party applied to set that order aside under Order 29 rule 1, Order 32 rule 6, Order 42 rule 13 and Order 92 rule 4 of the Rules of Court 2012. The central question was whether the demand on the performance bond was unconscionable, the established ground on which the Malaysian courts will restrain a call on an on-demand bond notwithstanding its autonomous character, together with the related question of security for costs.

A performance bond of this kind is designed to provide the beneficiary with security payable on demand, independently of the underlying disputes about performance, so that the courts will intervene to restrain a call only where fraud or unconscionability is established. The firm's matter squarely engages that exception and its limits, in the context of an arbitration to which the underlying construction disputes had been referred, and the interim protective jurisdiction the court exercises in support of the arbitral process under section 11 of the Arbitration Act 2005. The firm's record is a focused construction-and-arbitration practice, concentrated on the interaction between on-demand security instruments, the unconscionability exception, and the court's supportive role in arbitration. The dispute illustrates a recurring pattern in large construction projects, in which a beneficiary seeks to call on a performance bond as the underlying disputes are referred to arbitration, and the party providing the bond turns to the court for interim protection, so that the litigation becomes a contest over whether the demand crosses the high threshold of unconscionability that alone justifies restraining payment under an instrument designed to be honoured on demand.