IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR
(CIVIL DIVISION)
CIVIL SUIT NO. 22 NCVC-570-12/2014
BETWEEN
CHENGDU MALAYSIA EDUCATION
… PLAINTIFF
CONSULTING SERVICE PTE LTD
AND
… DEFENDANT
TWINTECH HOLDINGS SDN BHD
GROUNDS OF JUDGMENT
BACKGROUND FACTS
1.
The Plaintiff is a company incorporated in the People’s Republic of
China (“China”). It has a registered address in Chengdu, Sichuan
Province, China.
2.
The Defendant is a company incorporated in Malaysia. It has its
registered
address
and
business
address
at
Bandar
Sri
Damansara, Kuala Lumpur. The Defendant owns the International
University College of Technology Twintech (“IUCTT”). It manages
and operates the IUCTT in Kuala Lumpur which provides private
education.
3.
The Plaintiff and the IUCTT entered into an agreement dated
1.9.2006 (“2006 Agreement”) where the Plaintiff recruits students
from China for them to further their studies at the IUCTT, an
institution operated by the Defendant.
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As consideration, the
Plaintiff takes a percentage of the fees collected from these
students.
4.
The parties further entered into another agreement dated 1.9.2008
(“2008 Agreement”) to affirm the relationship between them for
another 15 years (collectively “Agreements”).
5.
Pursuant to the Agreements, the parties agreed to cooperate and
set up a financially independent office (“China Divisional Office”)
for recruitment purposes.
It was also agreed that the China
Divisional Office would collect the fees from these students and
apportion the fees paid by them.
6.
The students who are recruited to study in IUCTT pay both the
International Student Fee and Tuition Fees to the China Divisional
Office.
The International Student Fee collected by the China
Divisional Office is to be divided pursuant to Clause 8 of the 2008
Agreement read together with Appendix 1. As for tuition fees paid
by the students, Clause 9 of the 2008 Agreement provides for the
division.
7.
The Plaintiff contended that it had performed its part of the
Agreements, where it has recruited a total of 526 students from
year 2007 to 2009. Accordingly, the China Divisional Office had
collected the first year tuition fees from the students and paid the
Defendant a total sum of RM1,277,435.00.
8.
The Plaintiff further contended that it has paid an additional sum of
RM1,441,773.00 to the Defendant. This sum ought to be refunded
by the Defendant to the Plaintiff. The Defendant acknowledged
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the said overpayment through a letter dated 24.8.2009 and
assured the Plaintiff that the fees collected by the China Divisional
Office in the following year will be used to contra the additional
sum collected.
9.
However, to-date, the Defendant has not refunded the said sum or
any part thereof.
10.
In addition, in breach of the Agreements, the Defendant directly
collected fees from the 526 students without giving the Plaintiff its
portion of the student recruitment fees, which amounts to a total of
RM4,916,500.00.
11.
The Plaintiff alleged that the Defendant had also represented to
the Plaintiff that the Bachelor Degree Programme in Music
(“Degree”) offered by IUCTT is recognised by the Chinese
Government but to-date, the Chinese Government has yet to
recognise the Degree due to the fact that the relevant accreditation
and approval from the Malaysian authorities are yet to be obtained.
As a result, the Plaintiff has suffered and continues to suffer losses
including the loss of income, opportunity and reputation.
12.
The Plaintiff commenced this Writ action for the above
overpayment, unpaid student recruitment fees and losses.
ENCLOSURE 8
13.
This is the Defendant’s Notice of Application (“Application”) made
under O.12 r.10(1)(a), (g) and/or (f) of the Rules of Court 2012
(“ROC”) for the following Orders:
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“1.
Writ dan Penyataan Tuntutan, kedua-duanya bertarikh
22.12.2014 diketepikan dan/atau dibatalkan;
2.
Suatu deklarasi bahawa dalam hal keadaan kes ini
Mahkamah Yang Mulia ini tidak mempunyai bidang
kuasa ke atas Defendan berkenaan dengan hal
perkara tuntutan atau relief atau remedi yang dipohon
dalam tindakan ini;
3.
Sekiranya Perintah-Perintah di perenggan-perenggan
1 dan 2 tidak dibenarkan, maka Defendan dibenarkan
memfailkan dan menyerahkan Pembelaannya dalam
tempoh masa 14 hari daripada tarikh Perintah ini
dibuat;
4.
Kos; dan
5.
Relif lanjut atau yang lain yang mana Mahkamah Yang
Mulia ini sifatkan sesuai dan patut.”.
COURT’S DECISION GIVEN ON 3.3.2015 REGARDING ENCLOSURE 8
14. (a) The Defendant’s Application is dismissed. Costs of RM2,500.00
are to be paid by the Defendant to the Plaintiff.
(b) The Defendant is ordered to file its Defence within 2 weeks from
the date of this Order.
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GROUNDS FOR DECISION
15.
O.12 R.10(1)(a), (g) and (f), and O.12 r.10(2), (3) and (4) of the
ROC provide as follows:
“Dispute as to jurisdiction (O.12, r.10)
10.(1) A defendant who intends to dispute the jurisdiction
of the Court in the proceedings by reason of any irregularity
as is mentioned in rule 9 or on any other ground shall enter
an appearance and, within the time limited for serving a
defence, apply to the Court for –
(a) an order setting aside the writ or service of the writ
on him;
(b) ………. ;
(c) ………. ;
(d) ………. ;
(e) ………. ;
(f) the discharge of any order made to prevent any
dealing with any property of the defendant;
(g) a declaration that in the circumstances of the case
the Court has no jurisdiction over the defendant in
respect of the subject matter of the claim or the
relief or remedy sought in the action; or
(h) ……… ;
(2) A defendant who wishes to contend that the Court
should not assume jurisdiction over the action on the ground
that Malaysia is not the proper forum for the dispute shall
enter an appearance and, within the time limited for serving a
defence, apply to the Court for an order to stay the
proceedings.
(3) An application under paragraph (1) or (2) shall be
made by notice of application supported by an affidavit
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verifying the facts on which the application is based and a
copy of the affidavit shall be served with the notice of
application.
(4) Upon the hearing of an application under paragraph
(1) or (2), the Court may make such order as it thinks fit and
may give such directions for its disposal, as may be
appropriate, including directions for the trial thereof as a
preliminary issue.” (emphasis added).
16.
At the outset, it must be noted that this Application is made under
O.12 r.10(1) of the ROC to set aside and/or strike out the Writ of
Summons and Statement of Claim (“SOC”) on the ground that this
Court does not have jurisdiction over the Defendant regarding the
Plaintiff’s claim. This Application is not made under O.12 r.10(2) to
contend that the Court should not assume jurisdiction over the
action on the ground that Malaysia is not the proper forum for the
dispute.
17.
It is observed that the Agreements were executed in China, but
that does not prevent this Court from having jurisdiction over this
action.
18.
The civil jurisdiction of this Court is provided in s.23(1) of the
Courts of Judicature Act 1964 (“CJA”) as follows:
“Civil jurisdiction – general
23. (1) Subject to the limitations contained in Article 128 of
the Constitution the High Court shall have jurisdiction to try
all civil proceedings where –
(a) the cause of action arose;
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(b) the defendant or one of several defendants
resides or has his place of business;
(c) the facts on which the proceedings are based
exist or are alleged to have occurred; or
(d) any land the ownership of which is disputed is
situated,
within the local jurisdiction of the Court and notwithstanding
anything contained in this section in any case where all
parties consent in writing within the local jurisdiction of the
other High Court.
(2) Without prejudice to the generality of subsection (1),
the High Court shall have such jurisdiction as was vested in it
immediately prior to Malaysia Day and such other jurisdiction
as may be vested in it by any written law in force within its
local jurisdiction.”.
19.
From s.23(1) of the CJA, it is clear that in the situations covered by
paragraphs (a) to (d) of the same subsection, this Court has
jurisdiction to try all civil proceedings.
20.
As submitted by learned Counsel for the Plaintiff, the Plaintiff’s
action meets more than one of the conditions put forward in
s.23(1) of the CJA. The Defendant is a company registered in
Malaysia and has a place of business in Malaysia. The cause of
action arose here i.e. the Defendant’s refusal to return the
overpayment to the Plaintiff, to pay the student recruitment fees to
the Plaintiff, and to obtain accreditation from the Malaysian
authorities (see Malayan Banking Bhd V. International Tin
Council and another appeal [1989] 3 MLJ 286).
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21.
Therefore, I am of the view that the High Court in Malaya has
jurisdiction over this action.
22.
The Defendant’s contention that the students reside in China is
relevant to the matter of proper or appropriate forum, and not the
issue of jurisdiction under O.12 r.10(1) of the ROC.
23.
The Agreements are drafted in 2 languages i.e. Chinese and
English. Clause 13 of the Agreements states as follows:
“The agreement will illustrate on Chinese and English
language. The actual reference will be based Chinese
version.”.
24.
Clause 13 therefore provides that the Chinese version of the
Agreements would be the authoritative or official text, and not the
English version. However, this does not prevent this Court from
having jurisdiction over the action. Chinese language experts or
interpreters can always be called to assist this Court on the
contents of the Chinese version of the Agreements.
25.
Clause 12 of the Agreements, inter alia, provides as follows:
“…If there is any dispute, both parties should discuss in a
friendly manner. If matters could not be solved, then; could
apply to Chinese arbitrary.” (emphasis added).
26.
Learned Counsel for the Defendant submitted that the prescribed
procedure for the settlement of disputes is ultimately by way of
arbitration in China after attempts have been made to settle the
dispute in a “friendly manner”.
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Therefore, China is the proper
forum to hear and determine the Plaintiff’s dispute.
No other
country would have jurisdiction to hear and determine the Plaintiff’s
dispute.
27.
With respect, I am of the view that notwithstanding the use of the
words “should” and “could” in Clause 12 of the Agreements, it does
not make it mandatory for both parties to settle their dispute by
arbitration in China. Clause 12 provides for the procedure to solve
any dispute in a friendly manner and parties “could” even apply for
arbitration in China. However, Clause 12 does not preclude any
party to a dispute from filing an action in Court.
28.
In this case, the Plaintiff chose to file the action in the Malaysian
Court, instead of going for arbitration in China.
29.
Learned Counsel for the Defendant relied on the Supreme Court
case of American Express Bank Ltd. V. Mohamad Toufic AlOzier & Anor [1995] 1 CLJ 273 and the Federal Court case of
Petrodar Operating Co Ltd V. Nam Fatt Corporation Bhd &
Anor [2014] 1 CLJ 18. However, these 2 cases decided by our
apex Court are authorities on the principle of determining the
appropriate forum to adjudicate a dispute, and not on the matter of
the jurisdiction of the Malaysian High Court which powers are
expressly provided for in s.23(1) of the CJA.
30.
Therefore, I do not think that Clauses 12 and 13 of the Agreements
are foreign jurisdiction clauses which make it imperative for this
dispute to be resolved only by arbitration in China to the exclusion
of this Court’s jurisdiction over the matter.
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31.
The Defendant contended that the Defendant is not named in the
Agreements. At this juncture, for the purpose of this Application,
suffice for this Court to find that the Defendant is the legal entity
which owns, manages and operates IUCTT, and that the IUCTT is
not an incorporated entity capable of being sued.
The Plaintiff
therefore sued the Defendant.
32.
In any event, even if it is later found that the Plaintiff is suing a
wrong party, it does not oust this Court’s jurisdiction to hear this
matter. If it is true that the Plaintiff has sued the wrong party, it is
open to the Defendant to file an application under Order 18 rule 19
of the ROC, and not an application under Order 12 rule 10(1) of
the same Rules, to strike out the Plaintiff’s action.
33.
Based on this Application and the reliefs sought, it is not proper for
the Defendant to embark on arguments regarding forum non
conveniens. As I have stated earlier, in order for the Court to
decide on the proper forum for this action, the Defendant should
make its application under O.12 r.10(2), and not under O.12
r.10(1) of the ROC.
34.
In view of the above grounds, I therefore ordered accordingly.
Dated 17 March 2015
-sgd( DATUK YEOH WEE SIAM )
Judge
Civil Division
High Court, Malaya, Kuala Lumpur
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Counsel/Solicitors for the Plaintiff
Mr. S Y Liew
Messrs Shearn Delamore & Co.
Counsels/Solicitors for the Defendant
Mr. Wan Muhammad Amin bin Wan Yahya
Ms Galoh Nursafinas Samsudin
Messrs Amin Karlos
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