Tab 15 Mra International V SPC

[2021] 1 LNS 870 Legal Network Series
IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR

IN THE FEDERAL TERRITORY OF KUALA LUMPUR,
MALAYSIA
[SUIT NO.: WA-23CY-11-03/2017]
BETWEEN
MRA INTERNATIONAL SDN BHD

(Company No.: 1035028-D) ... PLAINTIFF
AND
SPC DIATECH, LLC … DEFENDANT
GROUNDS OF JUDGMENT
INTRODUCTION
[1] This case involves a wide spectrum of issues in view of the

combination of causes of action where the Plaintiff ’s pleaded
claim against the Defendant is premised on defamation, tort of
inducement of breach of contract, tort of unlawful interference
of business and tort of intentional interference with prospective
economic advantage whilst the Defendant has counterclaimed
against the Plaintiff for breach of contract, copyright
infringement and breach of confidential information.
[2] A glimpse of the dispute between the parties can be seen in the
judgment of the High Court in MRA International Sdn Bhd v.
SPC Diatech, LLC at [2018] MLJU 107 and [2018] 1 LNS 136 in
respect of the Plaintiff’s application for an interlocutory
injunction and the Defendant’s application to set aside the Ex
1
Parte Interim Injunction Order granted by the Court on

17.3.2017.
[3] This Grounds of Judgment sets out the full reasons for the
decision of the Court which was pronounced on 14.8.2020 after
careful consideration of the pleadings, witnesses ’ evidence,
documentary evidence and the comprehensive and extensive
written submissions diligently prepared by the team of solicitors
who represented the parties led by Ms. Manjit Kaur for the
Plaintiff and Ms. Cindy Goh for the Defendant.
BACKGROUND FACTS
- The Defendant
[4] The Defendant is a company established under the laws of the

Russian Federation in October 1997. It is also known as
“Limited Liability Company Scientific Production Co mpany
Diagnostic Technology for Technosphere”. The Defendant has
been a member of the Russian Academy of Natural Sciences
since 2001. It is also officially certified and recognised by the
international organisation, Russian Maritime Register of
Shipping.
[5] The main area of the Defendant’s business is technical

diagnostics in the oil, gas, chemical, energy and other industries
using innovative technologies and equipment. The technosphere
objects which have been inspected or tested by the Defendant
for clients such as Repsol (Spain), Sinopec (China), Petrobras
(Brazil) and Petronas (Malaysia) include pipelines, tanks,
pressure vessels, bridges, furnaces, boilers and oil tunnels.
2
[6] In addition, the Defendant is professionally engaged in research

and development of diagnostic technologies and their practical
implementation. It has developed a technology involving Phonon
Emissive Diagnostic or popularly known as Phonon Diagnostic
Technology (‘PDT’) and holds the “Patent of Invention” for
“The Method of Phonon Emissive Diagnostic” registered on
5.2.2016 for a term until 29.1.2034 and “Utility Model Patent”
for “The System of Phonon Emissive Diagnostic ” registered on
9.12.2014 for a term until 29.1.2024. The “Certificate of
trademark (service mark)” for “Phonon” was registered on
19.6.2017 for a term until 4.8.2026. Meanwhile, the Defendant ’s
application for registration of the “Phonon” trademark under the
Trade Marks Act 1976 [Act 175] (‘TMA 1976’) (Repealed by
the Trademarks Act 2019 [Act 815]) was accepted and advertised
under Class 42 on 15.12.2016 vide Federal Gazette dated
7.6.2018.
[7] PDT is a diagnostic method which involves applying energy

onto a technical object and causes phonon emissions. These
emissions are used to determine the technical condi tions, the
presence of leaks and defects and the residual life estimation of
technical objects within a facility. PDT allows the identification,
in real-time, of the quantity, location, size, type and level of
defects. As compared to the conventional acous tic method, PDT
can be conducted without shutting down or interfering with the
production process. Based on the results obtained from PDT, the
Defendant will recommend any repair works that is necessary to
prevent accidents, technical disasters and environ mental
damage.
- The Plaintiff
3
[8] Based on the Corporate Information from the SSM Search as at

17.4.2017, the Plaintiff was incorporated on 18.2.2013 and its
nature of business is stated as providing diagnostic systems and
tools to support oil and gas industry and its related services. The
types of diagnostic and inspection services rendered by the
Plaintiff include the Hybrid Acoustic Technology System
(‘HATs’) allegedly invented by its Managing Director and
developed in 2014, visual inspection, ultrasonic thickness test,
thermal diagnostic and acoustic and correlation leak study. More
will be said about HATs later.
[9] Similar to the Defendant, the Plaintiff boasted its own list of
customers namely, Petronas and all of its subsidiary and
associate companies such as Petronas Gas Berhad (‘PGB’) and
Petronas Carigali Sdn Bhd (‘PCSB’), Vanguard Systems &
Services International LLC (‘Vanguard’), Occidental of Oman
Inc. (‘Occidental’), Brunei Shell Petroleum Co Sdn Bhd
(‘Brunei Shell’), Repsol Oil & Gas Malaysia Limited [‘Repsol’,
formely known as Talisman Malaysia Limited ( ‘Talisman’)],
Velosi (M) Sdn Bhd (‘Velosi’), Bisco Integrated Services
Corporation, Saudi Arabia (‘Bisco’) and Asean Bintulu
Fertilizer Sdn Bhd (‘ABF’).
[10] The Plaintiff has received accreditation under MS ISO

9001:2008 (Quality Management System), OHSAS 18001:2007
(Occupational Health & Safety Management System) and MS
ISO 14001:2004 (Environmental Management System). It also
obtained the status of Multimedia Super Corridor Malaysia in
2014.
- The relationship between the parties
4
[11] In order to fully understand the history of the relationship

between the Plaintiff and the Defendant, it is necessary to go
back to the period when PDT was first introduced in Malaysia.
In the Plaintiff’s submission, it has divided the timeline of
events into three phases, namely Pre-Phase 1 (2009 – 2012),
Phase 1 (February 2013 – March 2014) with the then
Defendant’s Vice President, Professor Vladimir Shukhostanov
(‘Prof. Vladimir’) and Phase 2 (June 2014 – end 2014) with the
Defendant’s President, Zelim Khan Dzhaliev (‘Zelim’). It must
be made clear at the outset that the Defendant disputes the
Plaintiff’s categorisation of these three phases.
[12] During the pre-Phase 1 period, the Plaintiff contended that

Skypearl (M) Sdn Bhd (‘Skypearl’), a company established by
Mohamad Khosim Bin Othman (‘Khosim’) who later became
one of the Plaintiff’s Directors, had promoted PDT in Malaysia.
On 25.7.2012, Prof. Vladimir signed the “Exclusive Appointment
Letter” to the attention of Khosim, the then President of Calidad
Technology (M) Sdn Bhd (‘Calidad’), another company which
was set up by Khosim. By virtue of that letter, the Defendant
confirmed that Calidad has been appointed as the exclusive
agent in the oil and gas market in the territory of Malaysia for
the Defendant’s products/ services which include the PDT for a
period of 3 years.
[13] Subsequently, Khosim, Datuk Fariz Nazrul Bin Che Noh

(‘Datuk Fariz’), the Plaintiff’s Business Development Director
and Mohd Hazim Bin Hassan (‘Hazim’), the Plaintiff’s
Managing Director, became acquainted and Khosim brought
about investment opportunities to Datuk Fariz and Hazim since
Skypearl and Calidad were said to be unable to bear the
expenses of the business.
5
[14] This led to discussions with Prof. Vladimir who informed Datuk
Fariz and Hazim that he was the proprietor and inventor of the
PDT and owner of the Defendant. The Plaintiff was then
incorporated on 18.2.2013 to market the Defendant ’s services in
Malaysia and the following documents were thereafter executed:
(a) “Exclusive Agent Appointment Letter” for a period of 5

years from 1.3.2013 was signed by Prof. Vladimir for the
Defendant to the attention of Khosim as Technical Director
of the Plaintiff;
(b) “MRA International Sdn Bhd Agency Agreement For

Malaysia Sector” for a period of 5 years from the date of
the Agency Agreement ie, 31.3.2013 was signed by Prof.
Vladimir for the Defendant as the “Principal” and
witnessed by Alexander Tsybenov (‘Alex’), and by Khosim
for the Plaintiff as the “Agent” and witnessed by Datuk
Fariz. Although the contents of the Agency Agreement,
especially on page 1, do not expressly state that the
Plaintiff was appointed by the Defendant as the exclusive
agent to promote and sell the Defendant’s PDT services in
Malaysia, this fact is not disputed by the parties. This will
be further elaborated in the later part of this judgment;
(c) “Memorandum Of Understanding For Expansion Of

Phonon Business Programme In Malaysia” (‘MoU’) signed
by the Plaintiff and Prof. Vladimir in his individual
capacity on 15.4.2013. According to the MoU, the Plaintiff
shall (i) be responsible in securing the phonon energy
diagnostic technology for the oil and gas industry in
Malaysia, providing sufficient funds for Prof. Vladimir to
develop the Phonon Centre Setup within a period of 3
years and arranging a Malaysian Second Home programme
6
for Prof. Vladimir and transport and personal assistance

for his family including to facilitate admission to an
international school for his child; (ii) transfer 20%
shareholding of the Plaintiff to Prof. Vladimir; (iii)
register a new intellectual property (‘IP’) company known
as “VSK International Sdn Bhd” whereby Prof. Vladimir
will have 80% stake of the shareholding and the Plaint iff,
a 20% stake of the same. Prof. Vladimir agreed, among
others, to grant exclusive right to the Plaintiff to sell PDT
for the Malaysian market, to reside and pattern his IP in
Malaysia with the establishment of the Phonon Centre and
to transfer the skill to perform diagnostic technology under
the Phonon Centre Setup. Based on the Plaintiff ’s
“Financial Statements 31 December 2013”, Prof. Vladimir
was appointed as one of the Directors of the Plaintiff with
effect from 18.6.2013 and as at 31.12.2013, held 80,000
shares in the Plaintiff company. Prof. Valdimir also had a
residential address in Malaysia;
(d) “Exclusive Agent Appointment Letter” for a period of 5

years from 2.1.2014 was signed by Prof. Vladimir for the
Defendant to the attention of Khosim whereby the Plaintiff
was appointed as the exclusive agent in the territory of
Brunei, Indonesia and Thailand;
(e) “Exclusive Agent Appointment Letter” for a period of 3

years from 17.6.2014 was signed by Zelim for the
Defendant to the attention of Datuk Fariz whereby the
Plaintiff was appointed as the exclusive agent in the
territory of Turkmenistan;
(f) “Exclusive Agent Appointment Letter” for a period of 3

7

territory of the Sultanate of Oman; and
(g) “Exclusive Agent Appointment Letter” for a period of 5

territory of South East Asia.
[15] In order to promote and effectively market PDT in Malaysia,

Prof. Vladimir had travelled several times to Malaysia in 2013
to conduct presentations on PDT.
[16] The Defendant’s alleged that during the validity of the Agency
Agreement, apart from some free trials which the Defendant
agreed to carry out for the Plaintiff, the Plaintiff had issued
merely 7 Purchase Orders (‘PO’) for the period from 25.1.2014
to 13.9.2015 which was received and accepted by the Defendant.
[17] The Defendant further claimed that sometime in January 2014, it

found out that Alex, who had resigned from the Defendant so as
to take up employment with Roscosmos State Corporation for
Space Activities, was doing some work for the Plaintiff in
Malaysia. Upon further investigations, the Defendant was
convinced that the Plaintiff had secretly employed the
Defendant’s former employees namely, Alex and Eremina
Marina (‘Marina’) to perform purported PDT services to the
local oil and gas companies without the De fendant’s knowledge
and consent. It is an agreed fact that PDT can only be performed
using PDT equipment and PDT software owned and invented by
the Defendant and by certified PDT specialist or engineers
(‘CS/E’) trained on PDT by the Defendant.
8
[18] The Defendant additionally alleged that the Plaintiff had

fabricated references for the Defendant’s ex-employees and
certificates for personnel who are strangers to the Defendant so
that they may appear to be phonon engineers/ specialists
qualified to perform PDT to unknowing customers.
[19] On 24.2.2016, Zelim signed the 30 days’ notice to the Plaintiff

pursuant to Clause 6.3 of the Agency Agreement dated
31.3.2013 that the said Agreement be terminated. The Defendant
sought the Plaintiff’s cooperation to immediately cease from
using or promoting PTD and making any reference to PDT in the
Plaintiff’s promotional, presentation and/ or marketing
materials. The Defendant also asked the Plaintiff to return all
property, items or technical literature belonging to the
Defendant and/ or destroy all confidential information or trade
secret pertaining to PDT. The Plaintiff was reminded that since
it was no longer the exclusive agent of the Defendant, the
Plaintiff is not authorised to continue to represent to Petronas or
any other party in Malaysia that it is the Defendant ’s agent.
[20] The Plaintiff replied to the Defendant vide a letter dated

14.3.2016 marked “Under Protest” expressing its
disappointment that despite its “remarkable performance”, the
Agency Agreement has been prematurely terminated for no
reason. The Plaintiff denied that it possessed any property, items
or technical literature that are patented or proprietary in nature.
Further, the Plaintiff stated that it will not utilise PTD and will
continue to provide its other services to the existing clients. The
Plaintiff warned the Defendant not to interfere in the Plaintiff ’s
business and to refrain from contacting any of the Plaintiff ’s
existing and/ or future clients.
9
[21] In an undated letter, the Defendant’s solicitors, Messrs. Adzly &

Co. gave a similar 30 day notice to the Plaintiff to terminate the
Exclusive Agent Appointment Letters in Oman, Turkmenistan,
South East Asia and all other relevant countries/ territories in
which the Plaintiff was appointed as agent. The Plaintiff’s
current solicitors replied to the Defendant’s solicitors on
19.4.2016 in a tenor akin to the Plaintiff’s letter dated
14.3.2016.
- Events post-termination of the Agency Agreement
[22] According to the Defendant, sometime in October 2016, Zelim

had made a presentation on PDT to Repsol. However, Repsol ’s
employees informed Zelim that Repsol had issued a Letter of
Award (‘LoA’) to the Plaintiff on 22.4.2015 for the provision of
PTD services. The Defendant had no knowledge about this
agreement and thus embarked on a further investigation which
finally revealed that the Plaintiff had entered into a –
(a) “Phonon Diagnostic Technology Agency Agreement” dated

10.6.2015 with Bisco whereupon the Plaintiff appointed
Bisco as a joint business partner to promote, market and
solicit bids, orders or contracts from customers for the
provision of phonon diagnostic services in Saudi Arabia;
(b) similar agreement with Berk Hill E.S. (‘Berk Hill’) on

1.6.2015 whereby Berk Hill was appointed as an agent to
promote PDT in Turkemistan;
(c) “Contract Agreement For Phonon Diagnostic Technology ”

dated 29.6.2016 with Vanguard; and
(d) “Commercial Proposal – Provision For Reliability Study

Utilizing Hybrid Acoustic Technology Services” between
10
Occidental, Vanguard and the Plaintiff dated 22.2.2017

which involves Phonon Diagnostic Technique.
The Defendant claimed that it was kept in the dark about all the
above mentioned agreements.
[23] The Defendant further alleged that its enquiries uncovered that
there were other LoA and contracts between the Plaintiff and
customers such as PGB, PCSB and Talisman for the provision of
PDT as well as power point presentations and reports prepared
for various subsidiary companies of Petronas, ABF, Malaysia
LNG Group of Companies, Brunei Shell and Sharq Eastern
Petrochemical Company (‘Sharq’) purportedly for the provision
of HATs but were essentially for PDT.
- The Alleged Defamatory Electronic Mail and Letters
[24] Consequent to the outcome of the investigations, the Defendant

issued letters to Repsol on 15.12.2016 and Occidental on
27.12.2016 (‘said Letters’). The said Letters led to the filing of
the instant suit on 9.3.2017 wherein it is the Plaintiff ’s pleaded
case [see para 23 of the Statement of Claim (‘SoC’)] that in
their natural and ordinary meaning, the statements in the said
Letters and in the cover e-mail for the letter to Repsol (‘said e-
mail’) meant, and were understood to mean, that the Plaintiff –
“a) The Plaintiff is an entity which practices fraud and

an entity which cheats;
b) The management of the Plaintiff manages the entity

in a criminal manner and also practices fraud and
deceit against its customers;
11
c) The Plaintiff is an entity which cheats and provides

other services which disguises as PDS;
d) The Plaintiff is an entity which is unethical,

incompetent, dishonest and unprofessional and not fit
to carry out business in this industry;
e) The Plaintiff is an entity which do not possess

experts in this industry and practices fraud against
its customers;
f) The Plaintiff is an entity which abuses its customers

trust to further its own selfish interest;
g) The Plaintiff is an entity which does not practice

safety measures expected by the industry and expos es
its customers to serious dangers;
h) The Plaintiff is an entity which neglects and does not

protect its customers interest;
i) The Plaintiff is an entity which seeks to make profit

at the expenses of its customers;
j) The Plaintiff is an entity which produces false and

inaccurate reports;
k) The Plaintiff and its management have committed

theft and misappropriation of money ie, a criminal
act which is punishable under the Penal Code;
l) The Plaintiff is an entity which has infringed the

intellectual property rights of the Defendant.
m) The Plaintiff’s management is a criminal and will be

facing criminal proceedings.”.
12
[25] The reliefs sought by the Plaintiff against the Defendant as set
out in para 36 of the SoC are as follows:
“a) A declaration that the Defendant wrongfully defamed

the Plaintiff;
b) A declaration that the Defendant has committed the

tort of inducement of breach of contract;
c) A declaration that the Defendant has committed the

tort of unlawful interference of business and tort of
intentional interference of business and tort of
intentional interference with prospective economic
advantage;
d) A permanent injunction prohibiting, preventing

and/or restraining the Defendant whether by itself
and/or through its directors and/or shareholders
and/or management and/or employees and/or agents
and/or directors, shareholders, employees,
management of its agents and/or nominees and/or
directors, shareholders, employees, management of
its nominees and/or representatives and/or directors,
shareholders, employees, management of its
representatives and/or business partners and/or
directors, shareholders, employees, management of
its business partners whether jointly and/or severally
from:
(i) publishing defamatory allegations whether

libelous and/or slander pertaining to and/or
against the Plaintiff and/or the Plaintiffs
technologies including and not limited to
Hybrid Acoustic Technology (HATs) system
13
and/or any other services provided by the

Plaintiff, to the management and/or employees
of the Plaintiffs customers as listed in Schedule
1 herein, through all modes of communication,
including but not limited to phone calls, private
meetings, delivery of messages through sms
and/or whatsapp and/or any other kind of
electronic communication, delivery of emails
and/or delivery of letters by hand and/or post
and/or fax and/or e-mail;
(ii) publishing defamatory allegations whether

libelous and/or slander pertaining to and/or
against the Plaintiffs management and/or
directors and/or employees and/or shareholders
to the management and/or employee of the
Plaintiffs customers as listed in Schedule 1
herein, through all modes of communication,
including but not limited to phone calls, private
meetings, delivery of messages through sms
and/or whatsapp and/or any kind of electronic
communication, delivery of e-mails and/or
delivery of letters by hand and/or post and/or
fax and/or e-mail;
(iii) inducing and/or encouraging breach and/or

default and/or infringement and/or termination
and/or freezing of agreement and/or contract
between the Plaintiff and the Plaintiff
customers as listed in Schedule 1 herein and
the other customers of the Plaintiff;
14
(iv) contacting the directors and/or shareholders

and/or management and/or agents and/or
nominees and/or employees and/or contractors
and/or representatives of the Plaintiff ’s
customers as listed in Schedule 1 and other
customers of the Plaintiff whether by itself
and/or through its directors and/or
shareholders and/or employees and/or agents
and/or nominees and/or representatives
through any mode of communication including
phone calls. Private meetings, delivery of
messages through sms and/or whatsapp and/or
any kind of electronic communication, delivery
of e-mails and/or delivery of letters by hand
and/or post and/or fax and/or e-mail;
(v) interfere and/or interrupt and/or disturb the

Plaintiffs business and/or transactions and/or
services rendered by the Plaintiff to the
Plaintiffs customers as listed in Schedule 1 and
other customers of the Plaintiff;
(vi) contacting and/or finding and/or enticing

and/or inducing the Plaintiffs employees to
breach and/or terminate their employment with
the Plaintiff;
e) The Defendant is instructed to provide the Plaintiff

all details and documentation including tender
documentations, letters, emails, reports, contracts,
release orders, purchase orders, work orders,
invoices and receipts pertaining to PDT services in
Malaysia, Brunei, Indonesia, Thailand, Turkmenistan
15
dan Sultanate of Oman from 24.3.2016 to the date of

conclusion of this action;
f) General damages and/or exemplary damages and/or

aggravated damages to be assessed before the Senior
Assistant Registrar and to be paid by the Defendant
to the Plaintiff;
g) Interest at the rate of 5% from the date of filing of

the Writ of Summons until the date of full settlement;
h) Costs on a solicitor - client basis to be borne by the

Defendant and paid to the Plaintiff forthwith; and
i) Any other or further reliefs deemed suitable and

expedient by the Court.”.
[26] The Defendant counterclaimed for the reliefs as set out below:
“A) A declaration that the Plaintiff has breached the

Agency Agreement between the Plaintiff and
Defendant dated 31.3.2013 (‘Agency Agreement’);
B) A declaration that the Plaintiff has committed

copyright infringement of the Defendant’s various
confidential information and documents pertaining to
PDT (‘Information and Documents’);
C) A declaration that the Plaintiff has breached the

Defendant’s confidential information pertaining to
the Information and Documents;
D) A perpetual injunction to restrain the Plaintiff

whether acting by itself, its directors, officers,
servant, representatives, shareholders, and/or agents
and/or any of them howsoever from utilizing and/or
16
disclosing and/or in any way dealing with the

Information and Documents;
E) An order that the Plaintiff, within seven (7) days

from the date of this order, whether acting by itself,
its directors, officers, servant, representative,
shareholders and/or agents and/or any of them
howsoever do forthwith deliver up upon oath and
surrender to the Defendant or its solicitors, all
Information and Documents or any other documents
belonging to the Defendant that was copied,
removed, extracted by and/or provided to the
Plaintiff and all copies or extracts of or from such
Information and Documents in its possession or
under its control;
F) An order that the Defendant be at liberty to use any

affidavit, statutory declaration, information, articles,
material and document obtained as a result of the
order to be made herein for the protection or further
protection of the Defendant’s rights or interests the
subject of this action whether in Malaysia or
elsewhere;
G) An inquiry as to damages suffered by the Defendant

and/or alternatively, at the Defendant’s option an
account of profits due from the Plaintiff’ act of
utilizing and/ or disclosing and/ or in any way
dealing with the Defendant’s Information and
Documents and/ or Plaintiff’s acts of infringement of
copyright and/or breach of confidential information;
H) Statutory Damages pursuant to the Copyright Act

1987;
17
I) Additional and/or exemplary and/or aggravated

damages;
J) Pre-judgment interest for such period and at such

rate as the Court deems appropriate pursuant to the
Civil Law Act 1956;
K) Interest at the rate of 5% per annum on all damages

and costs awarded by the Court from the date of
award until the date of full settlement;
L) Costs; and
M) Such further or other relief or direction as this

Honourable Court may deems fit.”.
THE TRIAL & ISSUES TO BE TRIED
[27] The trial was conducted for 38 days beginning on 12.11.2018

and ending on 22.1.2020. They are altogether 89 bundles of
documents, 256 exhibits and 17 documents marked for
identification only. Six witnesses each testified for the Plaintiff
and the Defendant and they are identified below:
Witness Name Occupation
PW1 Khairul Izhar Bin Osman Plaintiff’s Team Leader

Inspection Engineer
PW2 Muhammad Firdaus Bin Plaintiff’s Team Leader
Baharudin Inspection Engineer
18
PW3 Ruzlan Bin Hashim Head of Inspection &

Assurance, Sarawak Gas,
Petronas Carigali Sdn.
Bhd. (‘PCSB’) and
formely the Head of
Inspection & Assurance,
Sarawak Operations,
PCSB
PW4 Mohd Hazim Bin Hassan Plaintiff’s Managing
Director (and shareholder
based on the SSM Search
as at 19.4.2017)
PW5 Datuk Fariz Nazrul Bin Plaintiff’s Business
Che Noh Development Director
(and shareholder based
on the SSM Search as at
19.4.2017)
PW6 Praba Karan a/l Freelance Consulting
Karunakaran Engineer and formerly
Repsol’s Subsea Team
Lead for Asset Integrity
Department
DW1 Mohd Zulfaiz Bin Jasni Inspection Executive,
PGB
DW2 Ilia Khokhlov Defendant’s Engineer
with specialisation in
phonon diagnostic
services
DW3 Ms. Lidiia Nekrasova Defendant’s Director of
Human Resource
19
DW4 Muhammad Syafiq Bin Freelance worker and

Mohamad Khairi Plaintiff’s former
employee
DW5 Ms. Sim Ling Fann Senior Integrity
Engineer, Repsol
DW6 Zelim Khan Dzhaliev President of the

Defendant
[28] DW2, DW3 and DW6 are citizens of Russia and they gave
evidence in the Russian language which was ably translated by
the interpreter, Ms. Darya Kirienko.
[29] The facts which were agreed by the parties during the pre -trial
case management are re-produced below:
“1. The Defendant is an entity incorporated in Russia and

having address at 32 Bolshaya Gruzinskaya Street,
Bl. 2, Moscow, 123056, Russia.
2. The Defendant is the author of the:
a) Letter to REPSOL Oil & Gas Limited Malaysia

(REPSOL) dated 15.12.2016;
b) Letter to Occidental of Oman Inc. (Occidental)

dated 27.12.2016;
c) E-mail to REPSOL dated 15.12.2016; and
d) E-mail to Occidental dated 27.12.2016.
3. Phonon Diagnostics Technology (PDT) can only be

performed using PDT equipment and PDT software
owned and invented by the Defendant and by
20
certified PDT specialist or engineers trained on PDT

by the Defendant.
4. The Plaintiff was appointed as an exclusive agent for

the Defendant in Malaysia vide appointment letter
dated 01.03.2013 for a period of five years.
5. On 31.03.2013, the Plaintiff and the Defendant

executed the Agency Agreement for the Malaysian
territory.
6. The Plaintiff was also appointed as the exclusive

agent for the Defendant for the territory of Brunei,
Indonesia and Thailand on 02.01.2014 and for the
territory of Turkmenistan, Sultanate of Oman and
South East Asia on 17.06.2014.
7. The Defendant provides PDT services.
8. By way of letter dated 24.02.2016, the Plaintiff ’s

Exclusive Agency Agreement was terminated.
9. The Defendant sent the documents mentioned in

paragraph 2 above to REPSOL and Occidental.”.
[30] At the end of the trial, the Court dismissed the Plaintiff ’s claims
and allowed the Defendant’s counterclaim. Specifically, the
judgment reads as follows:
“1. The Plaintiff’s claims are dismissed with costs;
2. A declaration that the Plaintiff has breached the

Agency Agreement between the Plaintiff and
Defendant dated 31.3.2013 (‘Agency Agreement’);
21
3. A declaration that the Plaintiff has committed

copyright infringement against the Defendant in
relation to the following:
(a) Defendant’s webpage on Phonon Diagnostic

Technology (‘PDT’);
(b) Defendant’s presentation on PDT; and
(c) PDT technical information in the Presentation

slides on PDT as set out in Exhibits P139 and
P140;
(collectively ‘the Copyrighted Works’);
4. A declaration that the Plaintiff has committed breach

of the Defendant’s confidential information in
relation to the following:-
(a) The document that describes the PDT

procedure entitled ‘Precise Procedure of
Instrumental Phonon Diagnostic of Pipelines ’;
(b) The PDT mathematical formula; and
(c) The Defendant’s PDT software; (collectively

‘the Confidential Information’);
(the Copyrighted Works and the Confidential

Information are collectively referred to as ‘the
Information and Documents’);
5. A perpetual injunction to restrain the Plaintiff

whether acting by itself, its directors, officers,
servant, representatives, shareholders, and/or any of
22
them howsoever from infringing the copyright of the

Copyrighted Works;
6. A perpetual injunction to restrain the Plaintiff

whether acting itself, its directors, officers, servant,
representatives, shareholders, and/or agents and/or
any of them howsoever from utilizing, disclosing,
breaching, misusing and/or in any way dealing with
the Confidential Information;
7. An order that the Plaintiff, within twenty one (21)

days from the date of this judgment, whether acting
by itself, its directors, officers, servant,
representative, shareholders and/or agents and/or
any of them howsoever do forthwith deliver up upon
oath and surrender to the Defendant or its solicitors,
all Information and Documents or any other
documents belonging to the Defendant that was
copied, removed, extracted by and/or provided to the
Plaintiff and all copies or extracts of or from such
Information and Documents in its possession or
under its control and to affirm and affidavit stating
that the Plaintiff no longer has any possession or
control of the Information and Documents;
8. An inquiry as to damages suffered by the Defendant

and/or alternatively, at the Defendant’s option an
account of profits due from the Plaintiff ’ act of
utilizing and/or disclosing and/or in any way dealing
with the Defendant’s Information and Documents
and/or the Plaintiff’s acts of infringement of the
Defendant’s copyright;
23
9. Statutory Damages pursuant to s. 37(1)(d) of the

Copyright Act 1987 to be determined;
10. Exemplary and/or aggravated damages to be

determined;
11. Pre-judgment interest and post-judgment interest at

the rate of 5% per annum from the date of the filing
of the Counterclaim on 2.5.2017 until the date of full
settlement; and
12. Costs to be paid by the Plaintiff to the Defendant a nd

the quantum to be determined at the assessment of
damages stage.”.
[31] The evaluation of the respective submissions of the parties and

the evidence adduced at the trial leading to the findings of fact
and law as aforesaid will be dealt with in the ensuing part of this
judgment following the sequence of the Common Issues To Be
Tried which is as follows:
“1. Whether the contents of the e-mail to REPSOL dated

15.12.2016, the letter to REPSOL dated 15.12.2016
and the letter to Occidental dated 27.12.2016 are
defamatory of the Plaintiff?
2. If Question 1 is answered in the affirmat ive, whether

the Defendant could rely on the defence of
justification?
3. If Question 1 is answered in the affirmative, whether

the Defendant could rely on the defence of fair
comment?
24
4. Whether the Defendant has committed the tort of

inducement for breach of existing contracts between
the Plaintiff and REPSOL and Plaintiff and
Occidental?
5. Whether the Defendant has committed the tort of

unlawful interference of business and tort of
intentional interference with prospective economic
advantage?
6. Whether the Plaintiff is entitled to the reliefs sought?
7. Whether the Plaintiff had breached the Agency

Agreement between the Plaintiff and the Defendant
dated 31.3.2013 (‘Agency Agreement’)?
8. If Question 7 above is answered in the affirmative,

whether the Defendant is estopped from alleging that
the Agency Agreement was terminated due to breach
of the Agency Agreement?
9. Whether the Plaintiff infringed the copyright of the

Defendant?
10. Whether the Plaintiff had committed breach of

confidential information pertaining to the
Defendant’s documents and confidential
information?
11. Whether the Defendant is entitled to the reliefs

sought under its counterclaim?”.
[32] There are three Plaintiff’s Additional Issues To Be Tried which

the Defendant could not agree to because it took the position
that the three issues had been dealt with under the Common
25
Issues To Be Tried or were not pleaded by the Plaintiff. The

additional issues are –
“12. Whether the Defendant’s conduct of terminating the

Plaintiff’s agency was pre-maturely without any
sufficient cause or is wrongful and unlawful?
13. If Question 7 above is answered in the affirmative,

whether the Defendant has waived its rights from
alleging that the Agency Agreement was terminated
due to breach of the Agency Agreement?
14. Whether the Plaintiff has a defence to the

Defendant’s counterclaim?”.
[33] I have considered the submissions by the learned counsels

regarding Question 13 and I agree with the Plaintiff that a
determination of Questions 8 and 13 involve distinct legal
principles on waiver and estoppel. Nevertheless, for purposes of
this judgment, both questions will be addressed within the same
cluster of issues.
[34] As for Question 14, there was no specific reply by the Plaintiff
in its submissions. Question 14 is all-embracing and will be
given due consideration in the course of dealing with the issues
relating to the Counterclaim.
[35] With regards to Question 12, the Defendant contended that, as

evident from para 36 of the SOC, the Plaintiff has never prayed
for any reliefs for the cause of action of wrongful or unlawful
termination of the Agency Agreement against the Defendant in
the SoC. Relying on the authority of Pedley v. Majlis Ugama
Islam Pulau Pinang & Anor [1990] 2 MLJ 307, Ms. Cindy
submitted that the Court should not be required to answer
26
Question 12 since it is essentially an academic issue and the

Plaintiff should not be allowed to suddenly raise this additional
cause of action.
[36] In rebuttal, the Plaintiff takes the position that the prayer for
damages is pleaded in subpara 36(f) of the SoC and this suffices
since damages are a consequence of the wrongful and unlawful
termination of the Agency Agreement. Material facts giving rise
to the cause of action are said to have been pleaded at paras 11
to 13 of the SoC.
[37] The Court has scrutinised the pleadings filed by the Plaintiff in
this suit and finds that, whilst the Plaintiff had prayed for
general, exemplary and/ or aggravated damages to be assessed
before the Senior Assistant Registrar in subpara 36(f) of the
SoC, however, the fact that the termination of the Agency
Agreement is wrongful or unlawful was not pleaded at a ll by the
Plaintiff. The paras highlighted by the Plaintiff, namely 11 to 13
of the SoC merely states that –
(a) the Agency Agreement was terminated prematurely and

abruptly;
(b) as a result, it caused hardship, embarrassment and

inconvenience to the Plaintiff and tarnished its image; and
(c) the Plaintiff had replied to the Defendant ’s notice of

termination vide letter dated 24.2.2016 by way of a letter
dated 14.3.2016, the contents of which were set out in
subparas 13(a) to (f).
[38] It is a cardinal rule in civil litigation that the parties must abide
by their pleadings to enable the issues to be defined and to
inform the parties in advance of the case they have to meet so
27
that the necessary preparations can be made to deal with it. It is

not the duty of the Court to solve the parties’ dispute by
allowing a cause of action which was not pleaded to be
ventilated (see Menah Sulong v. Lim Soo & Anor [1983] 1 CLJ
26; Lee Ah Chor v. Southern Bank Bhd [1991] 1 MLJ 428; and
Gerard Jude Timothy Pereira v. Kasi a/l KL Palaniappan [2017]
6 MLJ 54). Nevertheless, for the purposes of this grounds of
judgment, Question 12 is discussed in the ensuing part under
Issue 12.
ANALYSIS & FINDINGS
Issue 1: Whether the contents of the e -mail to Repsol dated

15.12.2016, the letter to Repsol dated 15.12.2016 and the letter to
Occidental dated 27.12.2016 are defamatory of the Plaintiff?
[39] The e-mail dated 15.12.2016 was sent by the Defendant’s

employee, Elkina Vera on behalf of Zelim to four Repsol ’s
employees including PW6 and DW5 (exhibit P104) and it reads:
“Dear Sirs,
attached to this email DIATECH, LLC forwards an official

letter to Repsol Oil & Gas Malaysia Limited to all
concerned executives and employees.
The letter concerns important information regar ding

industrial safety of facilities of Repsol Oil & Gas Malaysia
Limited, below mentioned persons should be essentially
informed:
Mr. Praba Karunakaran - Subsea Team Lead,
Mr. Hafis Harif - Structural Integrity Engineer,
28
Mr. Shahril Adha Zamhury - Engineering and Inspection

Manager,
Ms. Sim Ling Fann - Topside Integrity Engineer.
We highly appreciate our corporation with Repsol

Company.
DIATECH has successfully performed works utilizing

Phonon Technology for Repsol in Spain. Please find
attached reference letter on work made in 2004. We also
have carried out the integrity study based on Phonon
Diagnostic technology for pipeline in 2016.
We have been committed to honesty and transparency in

our dealings with Repsol, that’s why it’s very important
for us to warn your Company against possible fraudulent
actions by the MRA.
We sincerely hope that soon this problem will be solved

favorably.
We are always open to discussions and we are ready to

answer all your questions.
Any additional information regarding DIATE CH and its

rights to Phonon technology would be presented to you
upon your first request.
…”.
[40] In para 17 of the SoC, the Plaintiff pleaded that there are 9
defamatory statements in the letter dated 15.12.2016 which was
attached to the above e-mail. For present purposes, it would be
beneficial for the contents of the whole letter which was signed
by Zelim to be re- produced below (with my added emphasis and
29
insertion to indicate each alleged defamatory statement), albeit

it is quite lengthy, so as to have a better understanding of the
context in which these 9 statements are made. The contents of
the letter dated 27.12.2016 to Ms. Mary Kenney of Occidental’s
Legal Department are the same as the letter to Repsol and the
latter reads as follows:
“Dear Sirs,
Since 1997, the scientific production company Diagnostic

Technologies for Technosphere (SPC DIATECH LLC) has
been performing Nondestructive Testing, inspection
services and industrial safety expertise of multiple
technical infrastructure facilities. Along with different
traditional methods of nondestructive testing Diatech uses
the unique and the most advanced patented invention and
method of its own design – PHONON Diagnostics
Technology.
Our Clients worldwide include Gazprom, Rosneft,

Russnaft, Total, BP, ENI, Repsol, CLH, SEPCA, Petrobras,
Petronas, SINOPEC, Hyundal Oilbank, LG Chemical and
many others.
Unfortunately, a former agent of Diatech in Malaysia,

MRA International Sdn Bhd, has recently fraudulently
started to use our company’s name and the name of the
PHONON method (invented, patented and exclusive to
Diatech), misleading customers. [1 st Statement] Further,
MRA simulated inspections of infrastructure facilities by
the PHONON method, although it does not possess the
relevant knowledge, necessary PHONON equipment or
PHONON trained technical staff. [2 nd Statement]
30
Having learned about the illegal actions of our agents,

we have terminated our Agency Agreement and closed all
business with MRA. [3 rd Statement] They no longer
represent Diatech or the Phonon method in any way. In
response, MRA simply changed the name of the
diagnostics method (to “Hybrid Acoustic Technology”)
and continued to violate the rights of Diatech as the
patent holder and the principal, as well as the rights of
its own oil and gas customers. [4 th Statement] To date,
MRA has signed a number of contracts for inspections of
infrastructure purportedly by the PHONON method,
during which they crudely simulated performing of
diagnostics works by the PHONON method in the
performance of their diagnostics works. However, in
reality, the PHONON inspection is not made; instead
several people employed by MRA in Russia simulate
works while another part of the same team draws up
reports on the inspection, obviously containing false
information. [5 th Statement]
We know for a fact that MRA deceitfully claimed to their

own clients (partners) a relation between HAT and the
PHONON method of Diatech. [6 th Statement] Moreover,
MRA deceives clients (partners) by falsely stating that
HAT has equal technical capabilities to the PHONON
method. [7 th Statement]
We believe that by the said actions MRA, and persons

hired by them, may be endangering industrial and
environmental safety, causing severe financial and
reputational damage to customers, and in some cases, to
the national security of a number of States . [8 th
Statement]
31
We also believe that, in the implementation of the above

activities, the perpetrators have committed a series of
crimes, including forgery of Diatech documents and
signature of the company CEO, theft and appropriation
of money. With this in mind, we have prepared crime
reports for the investigating authorities of several
international jurisdictions. [9 th Statement]
We hope that in the near future the problem will be solved,

and until then we ask you to bear in mind that Diatech has
no connection to the activities of MRA, and that MRA has
no connection to PHONON diagnostics nor to other
Diatech technologies, all the rights to which belong solely
to Diatech.
Diatech is not responsible for any negative consequences

of acts or omissions of MRA and / or its affiliates. ”.
[41] The Plaintiff submitted that it has discharged the burden of

proving the three elements of the tort of defamation as laid
down in the case of Ayob Saud v. TS Sambanthamurthi [1989] 1
MLJ 315, which was cited with approval by the Federal Court in
Raub Australian Gold Mining Sdn Bhd (in creditors ’ voluntary
liquidation) v. Hue Shieh Lee [2019] 3 MLJ 720, namely that the
words –
(a) are defamatory;
(b) refer to the Plaintiff; and
(c) are published.
[42] The fact that the Defendant is the author of the said Letters and
said e-mail and had sent the same to Repsol and Occidental was
agreed by the parties prior to the trial. Publication of the words
32
is thus established. The fact that the impugned statements refer

to the Plaintiff is crystal clear and incontrovertible.
[43] In answering the question as to whether the words in the said

Letters and said e-mail are defamatory in nature, Ms. Manjit
relied on the evidence given by PW3, PW4, PW6, DW1, DW5
and DW6 and the legal principles as explicated in Gatley on
Libel and Slander, 6 th (1967) and 11 th (2008) editions, Sweet &
Maxwell and the case authorities of Syed Husin Ali v. Sharikat
Penchetakan Utusan Melayu Berhad & Anor [1973] 2 MLJ 56;
Chok Foo Choo @ Chok Kee Lian v. The China Press Bhd
[1999] 1 MLJ 371; Mak Khuin Weng v. Melawangi Sdn Bhd
[2016] 5 MLJ 314; and Lim Guan Eng & Anor v. Ganesan a/l
Narayanan [2017] MLJU 1898.
[44] Apart from citing the same excerpt from Ayob Saud’s case
(supra) and contending that PW3 and PW6’s testimony should
not be given weight as their credibility is doubted, the
Defendant did not seriously challenge that the three elements of
the tort of defamation have not been proven in this case. Instead,
emphasis was laid on the defences of justification and fair
comment.
[45] The determination as to whether the words complained of are

capable of bearing a defamatory meaning involves a question of
law that turns upon the construction of the words published: per
Gopal Sri Ram JCA in Chok Foo Choo (supra, at p 374).
Applying the test in determining whether the 9 statements in the
said Letters and the said e-mail are defamatory in nature, I find
that the words published in their natural and ordinary meaning
do impute dishonourable conduct or motives and a lack of
integrity on the part of the Plaintiff. The words used would
certainly tend to lower the Plaintiff in the estimation of right -
33
thinking members of the society since they plainly attribute the

Plaintiff with fraudulent conduct, deceit and cheating by, among
others, changing the name of the diagnostic method from PDT to
HATs and securing several contracts for the inspection of
infrastructures by purportedly utilising the phonon method,
which the Defendant is the patent holder, after the Agency
Agreement had been terminated. A reasonable reader with
ordinary intelligence and of general knowledge and experience
would, in my view, be likely to understand the wor ds to bear the
meaning as detailed in para 24 above.
[46] Therefore, the Court holds that the Plaintiff has established the
elements of the tort of defamation and the question posed in
Issue 1 is answered in the affirmative. With this finding, the
onus now shifts to the Defendant to prove its pleaded defence of
justification and fair comment.
Issue 2: If Question 1 is answered in the affirmative, whether the

Defendant could rely on the defence of justification?
- The Plaintiff’s objection to the Defendant’s pleadings
[47] The Plaintiff contended that the Defendant ’s defence of

justification is fraught with ambiguity and lacks the particulars
as required under O. 78, r. 3(2) of the Rules of Court 2012
(‘RoC 2012’). Relying on the case authority of DP Vijandran v.
Karpal Singh & Ors [2000] 3 MLJ 22, the Defendant is said to
have failed to plead alternative imputations of the impugned
statements that the Defendant intends to justify since the
Defendant denied the imputations as pleaded by the Plaintiff. In
these circumstances, the Plaintiff argued that the alternative
meaning as submitted by the Defendant in its Written
34
Submission must be rejected on the ground that the fact was not
pleaded.
[48] Ms. Cindy refuted the Plaintiff’s contention by submitting that

the Defendant had pleaded sufficient particulars in compliance
with the RoC 2012. It was further submitted that even if the
Court is minded to hold to the contrary, based on the decision in
Chiew Foo Hua v. The Publisher Miri Daily News & Anor
[2000] MLJU 664, the Plaintiff’s failure to object during the
trial amounts to a waiver and the Defendant is justified in
relying on all the evidence referred to during the trial.
[49] The Defendant asserted that there is no prejudice c aused to the

Plaintiff by the Defendant relying on the evidence as the
Plaintiff was not taken by surprise in any way. According to the
Defendant, the Plaintiff was aware and had full knowledge of
the Defendant’s case since similar arguments on justificati on
was ventilated during the hearing of the Plaintiff ’s ex-parte and
inter partes interlocutory injunction applications in 2017. In any
event, the Defendant posited that the Plaintiff’s objection can be
cured under O. 1A and O. 2, r. 1 RoC 2012.
[50] On the point of the Plaintiff’s failure to object during the trial,
Ms. Manjit referred to the Notes of Evidence ( ‘NoE’), Vol. 12
on 16.10.2019 at pp 52 and 57 to refute the Defendant ’s
submission. I have perused the NoE at pp 51, 52 and 57 and it
shows that Ms. Manjit had raised an objection at the time when
Ms. Cindy asked Zelim to explain, with regards to his answer to
Question 31 in his Witness Statement (‘WS- DW6’), as to why
the Defendant alleged that the Plaintiff had committed copyright
infringement and breach of confidential information. Ms. Manjit
requested that it be placed on record that the Plaintiff will be
submitting that the documents and information have not been
35
pleaded in the Statement of Defence and Counterclaim and that

this objection on pleadings for confidential information also
applies to the pleadings for copyright infringement.
[51] Throughout the trial, the Plaintiff had consistently maintained

the position that the Defendant has failed to plead the particulars
of information and documents as denoted by the words
“Information and Documents” which first appear in para 15 in
the Statement of Defence and Counterclaim as quoted below:
“15. For purpose of enabling the Plaintiff to market the

Defendant’s services effectively, the Defendant
provided the Plaintiff with various confidential
information and documents pertaining to PDT (‘the
Information and Documents’) which are exclusive to
the Defendant and are not found in public domain
during the validity of the Agency Agreement. The
Information and Documents are extremely valuable
to the Defendant and any unauthorised use by third
parties will cause severe consequences and damage
to the Defendant.”.
[52] O. 78, r. 3(2) in the RoC 2012 provides that:
“Obligations to give particulars (O. 78, r. 3)
3. (1) …
(2) Where in an action for libel or slander the

defendant alleges that, in so far as the words complained
of consist of statements of fact, they are true in substance
and in fact, and in so far as they consist of expressions of
opinion, they are fair comment on a matter of public
interest, or pleads to the like effect, he must give
36
particulars stating which of the words complained of he

alleges are statements of fact and of the facts and matters
he relies on in support of the allegation that the words
are true.”.
[53] In para 39 of the Statement of Defence and Counterclaim, the

Defendant denied the allegations that it has published
defamatory statements againt the Plaintiff by reason that the
statements and/ or words in the said Letters and said e -mail are
true, justified and/ or fair and were made honestly , without
malice and on a matter of public interest. Para 39 begins with
the words “By reason of the above”. This means that the
Defendant is relying on the facts as pleaded in the paras
appearing before para 39 in denying the allegations hurled
against it as to the publication of defamatory statements.
[54] The Defendant has additionally pleaded the particulars of the

Plaintiff’s alleged breach of the Agency Agreement, misuse of
confidential information and copyright infringement in its
Counterclaim whilst in para 18 of the Reply To Defence To
Counterclaim, the confidential information which the Plaintiff is
said to have obtained from the Defendant or its representatives
include technical information on PDT and PDT ’s equipment
such as its explanation, diagrams, drawings, methodology and
the like.
[55] Read in its totality, the Defendant has basically pleaded that the
said Letters and said e-mail contain statements of fact which are
true and justified. This is to be distinguished with the factual
matrix in the case of the third defendant in the DP Vijandran’s
case (supra). There, the third defendant had pleaded justification
of the defamatory imputation as pleaded by the plaintiff but in
its submission, it argued that the impugned words have a
37
different meaning. It is in this context that the learned High

Court Judge held at p 50 that a defendant who pleads
justification must show in his defence, either as a specific
averment or in the particulars relied on, the meaning that he
seeks to justify and that by departing radically from the pleaded
defence, the plaintiff was taken by surprise.
[56] Hence, it is my considered view that the Defendant has pleaded

sufficient facts, matters and particulars upon which the defence
of justification was raised. Among the facts relied on is that the
Defendant is the copyright owner of the “Information and
Documents” and possesses confidential information pertaining to
PDT. There is no breach of the obligation as set out under O. 78,
r. 3(2) RoC 2012.
[57] Even if I am wrong in coming to the aforesaid conclusion, I am

persuaded by the Defendant’s submission on the case authority
of Chiew Foo Hua (supra) wherein the decision of the Court of
Appeal in Superintendent of Land and Survey (4th Div) v. Hamit
bin Matusin [1994] 3 MLJ 47 was referred to, that the fact that
the Plaintiff chose to proceed with the trial without asking for
further and better particulars showed that it was not in any way
prejudiced with the absence of such particulars. As submitted by
Ms. Cindy, the Plaintiff is well aware of the Defendant’s
defence of justification from the hearing of the applications for
an interlocutory injunction in 2017.
[58] Moreover, the objection raised by Ms. Manjit during the trial
was in respect of the lack of particulars as to the “Information
and Documents” rather than as to the meaning of the impugned
words which the Defendant seeks to justify or what the facts
alleged to be true imputes.
38
- Defence of justification
[59] At common law, the impugned statement must be shown to be

substantially true in material particular. Section 8 of the
Defamation Act 1957 [Act 286] provides that –
“In an action for libel or slander in respect of words

containing two or more distinct charges against the
plaintiff, a defence of justification shall not fail by reason
only that the truth of every charge is not proved if the
words not proved to be true do not materially injure the
plaintiff’s reputation having regard to the truth of the
remaining charges.”.
[60] In interpreting the above quoted provision, a purposive approach

is to be taken and it is not necessary to prove the truth of every
word in the alleged defamatory statement. The burden of proof
is on the Defendant to prove, on a balance of probabilities, that
the impugned statement is true or substantially true in material
particular. Once the defence of justification is successfully
established, it affords a complete defence against a defamation
suit by a claimant. The Defendant need not show that there was
public interest in the publication and that the Plaintiff had acted
maliciously (see Chong Swee Huat & Anor v. Lim Shian Ghee
t/a L & G Consultants & Education Services [2009] 3 MLJ 665;
Dato Seri Mohammad Nizar bin Jamaluddin v. Sistem Televisyen
Malaysia Bhd & Anor [2014] 4 MLJ 242; and Dato’ Sri Dr
Mohamad Salleh Ismail & Anor v. Nurul Izzah Anwar & Anor
[2018] 9 CLJ 285).
[61] In addressing the issues related to this defence, the learned

counsels representing the parties have adopted similar clustering
of the 9 statements except for the grouping of Statements 1 to 5.
39
The Defendant has placed Statements 1, 2, 3 and 5 in one group

and Statement 4 on its own whilst the Plaintiff prefers to tackle
Statements 1, 2, 4 and 5 under one category and has separated
Statement 3. For the purposes of this judgment, I shall adopt the
Defendant’s clustering of the 9 statements and its choice of
headings for each cluster with the exception that Statements 1,
2, 3, 4 and 5 will be addressed collectively.
Statements 1, 2, 3 and 5: Using phonon’s name to mislead

customers as to the inspections actually
performed and simulated inspections by
employing Russians
Statement 4: Changed the diagnostic method to HATs and

continue to violate the Defendant’s rights
- The parties’ submissions
[62] The Defendant’s counsel has neatly encapsulated the crux of the
Defendant’s arguments in para 64 of the Written Submission
which is re-produced in part below. It was contended that
Statements 1, 2, 3 and 5 are justified because the Plaintiff have
misled or given false impression to the customers by, inter alia,
the following means:
40
FALSE IMPRESSION HOW THE PLAINTIFF

MISLEAD
Misrepresented that the The Plaintiff was
inspection carried out is PDT systematically using the
inspection. In actual fact, the name/ term of PDT in their
inspection carried out cannot presentation slides, bidding
qualify as PDT. documents, agreements,
discussions etc. PDT was
mentioned all over the
agreements with Repsol/
Talisman, PGB and PCSB,
etc.
Misrepresented in some projects The Plaintiff has been
that the inspection was carried referring to the Defendant’s
out by the Defendant (the only name in agreements as their
company in the world qualified principal, as well as
to conduct PDT inspection). In providing customers with the
actual fact, the inspection was guarantee letter from the
carried out by the Plaintiff itself. Defendant. The Plaintiff even
employed Russians for this
purpose.
Misrepresented that the Plaintiff The Plaintiff has referred to
has employees who are qualified its employees as ‘Phonon
to carry out PDT. In actual fact, Specialist’ or ‘Phonon
Engineer’
those employees either never and has forwarded CV
received any training from the designating its employees as
Defendant or have had their such. Ex-employees of the
qualification revoked. Defendant were also
employed for this purpose.
41
[63] It was further submitted that the Plaintiff had calculated to

deceive its customers by providing inspections that cannot
qualify as the real PDT inspections as these were done
independent of the Defendant and were not carried out by
experts certified by the Defendant and nor by using the proper
PDT equipment and in accordance with the proper procedures,
formula and protocol devised by the Defendant.
[64] With regards to Statement 4, the Defendant asserted that the

evidence adduced at the trial supports a finding that Talisman
wanted PDT to be performed and the technology that the
Plaintiff represented to Talisman was PDT. However, the
Plaintiff just changed the name of the diagnostic method and
used the words “Acoustic” and “HATs” in the reports that it
prepared for Talisman after Zelim had confronted Hazim in May
and October 2015 on the Plaintiff’s engagement of the
Defendant’s ex-employees and the provision of purported PDT
for PGB’s projects without the Defendant’s knowledge.
[65] At the other end, the Plaintiff submitted that the impugned
statements remain unjustified for the following reasons:
(a) It is common practice in the oil and gas industry for

blanket contracts to be given to contractors to render
various services to customers for a fixed period of time
within the scope of the contract. The Plaintiff ’s
appointment is by way of such blanket contract and the
evidence led proves that the contracts produced during the
trial are blanket contracts.
(b) The Plaintiff was not privy to the internal management

arrangements of the Defendant and merely complied with
any request or requirement by Prof. Vladimir and Zelim
under Phase 1 and Phase 2, respectively. Any PDT that
42
was provided by the Plaintiff as the Defendant’s agent was

performed by teams assigned by Prof. Vladimir and Zelim.
(c) The Plaintiff only provides HATs by utilising acoustic

based equipment since it was not in possession of any PDT
equipment. The Defendant’s allegation that the Plaintiff
had used Alex and Marina to perform PDT contradicts the
Defendant’s position that the Plaintiff does not possess
PDT equipment and that PDT cannot be done without PDT
equipment.
(d) The Defendant failed to call Prof. Vladimir, the inventor

of PDT, as a witness. In addition, no expert witness was
called to explain what the PDT methodology is as
compared to HATs to enable the Court to decide as to
whether the Plaintiff had indeed crudely simulated
performing diagnostic works by the Phonon method.
(e) The word “phonon” is a generic word and the terms

“Phonon Engineer” and “Phonon Specialist” as used in the
documents before the Court is not the Defendant’s creation
and does not indicate that the particular person is
providing PDT or employed by the Defendant.
(f) The Plaintiff did not mislead or made any

misrepresentation to its customers. The Plaintiff had
created the PDT presentation slid es on its own as the
Defendant did not provide any information or documents
and a comparison of the presentation slides for PDT and
HATs show that there is a substantial difference between
both. Presentations on PDT and HATs were made to
technical people in the oil and gas industry who
understood the distinction between phonon and acoustic
based technologies. The Plaintiff does not want to be
43
associated with PDT because HATs is a far superior

technology compared to PDT and there were many
complaints and restrictions on PDT.
(g) The termination of the Agency Agreement was pursuant to

Clause 6.3 rather than Clause 6.2 which is the specific
provision for termination on the ground of breach of any
obligation under the Agreement. Hence, the termination
was not due to any purported illegal conduct by the
Plaintiff and/ or breach of the Agency Agreement but was
motivated by the Defendant’s intention of replacing the
Plaintiff with Gaztech as the new agent to promote and
provide PDT. The Defendant is further estopped from
relying on the grounds that it sought to justify the
termination since it did not take any action against the
Plaintiff until the filing of the instant suit by the Plaintiff.
- The findings of the Court
[66] The Court, having seen and heard the evidence given by 12
witnesses and upon careful scrutiny of the same together with
the documentary evidence, pleadings and extensive submissions
of the parties, had made the following findings in respect of the
multifarious issues.
Contract with Repsol
[67] Based on the testimony given by the witnesses, particularly Ms.

Sim (DW5) and Zelim (DW6), and the contents of the following
documents ie, –
the Plaintiff’s Technical Bid Proposal for the “Provision

For Phonon Diagnostic Technology Inspection Services
44
Tender No. KB14-0136” for Talisman with the cover letter

dated 29.12.2014 and acknowledged receipt by Talisman
on 19.1.2015 (exhibit D246);
Technical Clarifications provided by the Plaintiff to

Talisman in relation to the Technical Proposal (exhibit
D247);
LoA for the “Provision For Phonon Diagnostic

Technology Inspection Services” issued by Talisman to the
Plaintiff dated 22.4.2015 (exhibit D186);
Minutes of Meeting held at Talisman ’s Meeting Room on

28.4.2015 taken by Hazim (exhibit D248);
Contract No. 150882 (Tender No. KB14 -0136) between

Talisman and the Plaintiff for “Provision For Phonon
Diagnostic Technology Inspection Services” made on
15.7.2015 (exhibit P105) with an effective date of
22.4.2015 being a 3 year contract to perform Phonon
Diagnostics on Talisman’s offshore facilities (with
particular attention given to “Section IV - Scope of Works /
Technical Specifications” which states that the scope of
work shall include the provision of equipment and
qualified personnel to perform PDT services to Talisman ’s
facilities and the procedures involving “Pre Phonon
Diagnostic Procedure”, “Phonon Diagnostic Procedure”
and “Post Phonon Diagnostic & Reports”);
Workpack for “Phonon Diagnostic Technology Pilot

Campaign At KNDP-A – Screening Of Structural Bracing
Integrity Condition (With Optional Caisson Work)”
[exhibits D183 and D249 (approved by Ms. Sim as
signified by her initial and chop)];
45
Release Order 150882RL002 dated 13.7.2015 for

“Phonon Diagnostic Technology Pilot Campaign At
KNDP-A – Screening Of Structural Bracing Integrity
Condition” which is the document issued by
Talisman requiring the provision of the services by
the Plaintiff (exhibit D250); and
“Report For Trial Acoustic Diagnostic Technology

Pilot Campaign At KNDP-A – Screening Of
Structural Bracing For Integrity Assessment ” for
Work Order Number 150882RL002 dated 19.11.2015
(exhibit P112),
the Court is of the view that the Defendant has established that –
(a) the Plaintiff has consistently represented to Talisman that

the technology that it was providing was PDT as evident
from the presentation, mockup session and discussion
conducted by the Plaintiff prior to commencement of the
diagnostic work;
(b) the technology that Repsol wanted was PDT. Apart from
Ms. Sim’s evidence of this fact, the contemporaneous
documents as listed above state that the technology to be
provided in all aspects from the equipment, qualified
personnel, procedure, reports and training is PDT;
(c) the Plaintiff’s Organisation Chart in Appendix VII – 2.4 in

Section VII: Administration Procedures of the Contract has
named the Defendant as the “Phonon Specialist” and this
fact was admitted by Datuk Fariz (PW5) and Praba (PW6).
However, the Plaintiff did not issue a single PO under the
Contract with Repsol to the Defendant as required under
the Agency Agreement. Instead, the Plaintiff conducted the
46
“PDT work” by using its own employees who were

represented as “Phonon Engineers” whilst Talisman/
Repsol was under the impression that the work was carried
out by the Defendant’s employees as there were Russians
who performed the services;
(d) the Defendant did not know the existence of the Contract
between Talisman and the Plaintiff until around October
2016 when Zelim visited Repsol to make a presentation on
PDT only to be informed by Ms. Sim and other Repsol ’s
employees about the LoA and Workpack; and
(e) when Talisman/ Repsol received the Report from the

Plaintiff, they immediately looked at the part on “Results”
and did not notice –
(i) the words “Acoustic Diagnostic Technology” in the

Project Title and Document Title on the cover page
of the Report;
(ii) the statement that Talisman has engaged the Plaintiff

to conduct a technology trial “… employing Hybrid
Acoustic Technology System (HATS) …” for the
screening of the structural bracing under
“Introduction”; and
(iii) the statement under “Methodology” that HATS “… is

an advanced new diagnostic and assessment
technique to study reliability of a specific object or
asset. It is an integration of acoustic emission
technique with phonon analysis and assessment for
defect detection. Principally, HATS is an acoustic
measurement type of inspection method utilizing the
released of energy through deforming defects. …
47
HATS provides real-time data on diagnosed objects

irrespective of its state of usage. … ” and that the
inspection consists of 3 main activities being “Pre
Acoustic Inspection”, “Acoustic Inspection” and
“Post Acoustic Inspection”.
[68] Talisman/ Repsol only realised the usage of the words to signify
HATS and “Acoustic Inspection” after Zelim’s visit in October
2016 when it checked the Report again. The Court finds that Ms.
Sim is a reliable witness and the so-called contradictions in her
evidence as argued by Ms. Manjit are groundless. The non -
calling of Hafis Harif, Repsol’s Site Representative and person
in charge of the project as a witness (see subpara 131(b) below)
is not fatal to the Defendant’s case since the documents speak
for themselves. Ms. Sim’s evidence regarding the documents is
adequate for the Defendant to discharge the burden of proving
its assertions at the trial.
Contract with PGB
[69] The Court has similarly evaluated the witnesses’ evidence at the
trial, and the contents of the LoA dated 12.3.2015 issued by
PGB to the Plaintiff for Contract No. SMSO/PGB-
GPU/2014/0327 “Price Agreement for Phonon Diagnostic
Technology Inspection Services For Gas Processing and
Utilities Division, Petronas Gas Berhad ” and the Contract for
the same on even date (collectively marked as exhibit D167).
The findings of the Court are as follows:
(a) The terms in the LoA and the Contract indicate that PGB
required PDT Inspection Services to be provided as
indicated by the words “Phonon Diagnostics Technology”
and “Phonon Diagnostics Inspection” therein.
48
(b) Pursuant to Clause 4 in the LoA, the Plaintiff shall within

30 days from the date of the LoA furnish PGB with a
“Parental/ Principal Guarantee” duly executed by the
Plaintiff’s ultimate holding company or principal in the
form as specified in Attachment 2 of the LoA. On
30.3.2015, Datuk Fariz sent an e-mail to Zelim and copied
to, among others, Hazim, to inform that –
(i) the Plaintiff had been awarded “another 200 piping

diagnostic using PDT in PGB”;
(ii) the working visa for the “new 4 Russian are almost
completed”;
(iii) the Plaintiff shall provide the PO to the Defen dant

“soon after our people conduct the site visit and
calculate the final length of the pipings ”; and
(iv) the Plaintiff needs the Defendant’s assistance to sign

on the parental letter attached to the e-mail as
“Petronas request this letter to be signed b y
Principal of this technology”.
Zelim accordingly signed the “Parental/ Principal

Guarantee”, which was dated as 15.3.2015, and Prof.
Vladimir signed as a witness (exhibit D166).
(c) Subsequently, the Defendant did not receive any PO from

the Plaintiff for this project. The Defendant asserted that
the projects/ works done by the Plaintiff without the
Defendant’s knowledge were “secret jobs” but these were
vigorously refuted by the Plaintiff, specifically in respect
of the following PO, Reports and works:
49
(i) PO 091 PGB Piping@GPK dated 10.3.2016 (exhibit

D242),Final Report for Provision of Integrity
Assessment of Pipings at Utility Kertih (UK),
Petronas Gas Berhad – Piping Circuit (8 nos.) dated
26.7.2016 (exhibits P127 and P128) and Final Report
for Provision of Integrity Assessment of Interplant
Pipings at Gas Processing Kerteh (GPK), Petronas
Gas Berhad – Piping Circuit (2 nos.) dated
26.10.2016 (exhibit P148)
The Court has considered the grounds given by the

Plaintiff in submitting that this is not one of the
secret jobs as alleged by the Defendant. However, the
Court agrees with Ms. Cindy’s argument that this PO
was issued by PGB under the LoA and the Contract
as aforementioned which are for the provision of
PDT. This PO was also issued after the termination
of the Agency Agreement and it goes to show that the
Plaintiff did not inform PGB that its agency with the
Defendant has been terminated. Instead, the Plaintiff
took it upon itself to perform the works under the
guise of PDT.
(ii) PO 097 PGB Piping dated 14.3.2016 (exhibit D241)
In his evidence, the subpoena witness Zulfaiz (DW1)

said that no services were provided under this PO
whist Zelim had agreed that there are no technical
reports in respect of this PO. However, the fact th at
this PO was issued in the first place supports the
Defendant’s stance that yet another PO was issued
after the termination of the Agency Agreement. It
further supports the Defendant’s submission that the
50
Plaintiff’s contention that PGB did not want to use

PDT because of numerous complaints against PDT is
not true since PGB continued to be interested in
PDT.
(iii) Report Studies For Provision Of Reliability Study

Utilizing Phonon Diagnostic Technology For PL-221
6”, 0.5KM and PL-218 6”, 1.1KM of Pipeline dated
16.1.2014 (exhibit P144) and the Invoice dated
1.5.2013 (exhibit P214)
The Plaintiff contended that this Report was done

during Phase 1 with Prof. Vladimir to which Datuk
Fariz had testified that Prof. Vladimir and Khosim
had asked Hazim and himself not to reveal to Zelim
all the previous jobs completed prior to Zelim ’s
arrival in Malaysia in June 2014. However, as
submitted by the Defendant, this Report was not the
basis upon which Zelim had written the said Letters
since Zelim discovered many more secret
transactions that were done by the Plaintiff without
the Defendant’s knowledge after the ex-parte
injunction was set aside and this Report was one of
them.
Ms. Cindy had raised a point on pleading during the

trial namely, that in the SoC, the Plaintiff did not
plead that there were projects in 2013 involving Prof.
Vladimir which it did not inform Zelim. In this
regard, the Court agrees with the Defendant that the
Plaintiff is precluded from attempting to prove this
fact and it is nothing more than an afterthought on
the Plaintiff’s part. This is evident from Datuk
51
Fariz’s testimony that Zelim arrived in Malaysia in

June 2014 whereas in the e-mail dated 27.5.2015,
which Zelim wrote to Hazim and copied to Datuk
Fariz and Khosim (exhibit P93), Zelim had stated
that he first arrived in Malaysia in February 2014.
The subsequent correspondence from the Plaintiff ’s
representatives did not dispute this fact.
Furthermore, if the Report was indeed prepared by

Prof. Valdimir, Zelim said that Prof. Vladimir’s
initials would be in the Report but instead, Alex ’s
initials “AT” is seen. In para 1.1 of the “Labour
Contract Agreement” between the Plaintiff and Alex
dated 1.6.2013 (exhibit D180), the Plaintiff agreed to
arrange for Alex to “work at post of head of expert-
phonon for marketing and promoting tasks for
complex phonon diagnostics works of various
industrial objects in Malaysia”. Para 2.1 goes to
provide that the Contract comes into effect from the
moment that Alex arrives in Malaysia and terminates
in one year. Thus, the earliest point of time on which
the Plaintiff employed Alex to secretly perform the
work would be 1.6.2013.
The issue on the authenticity of the Invoice will be

addressed under Statement 9.
(iv) Report Studies For Provision Of Reliability Study

Utilizing Phonon Diagnostic Technology For PL-
222R1-R4 6”, 1.62KM Pipeline (From WLDP-B To
WLDP-A) At West Lutong For Petronas Carigali Sdn
Bhd dated 16.1.2014 (exhibit P145) and PO dated
25.1.2014 for Provision For Reliability Study Using
52
Phonon Diagnostic Technology For 11 Pipelines

(exhibit D179)
The Plaintiff submitted that there was a PO for PL -

222 issued to the Defendant and hence this cannot be
a secret job. However, the Court accepts the
Defendant’s contention, which is similar to the
Report in subpara (iii) above, that this Report in
question are amongst those which Zelim came to find
out after the ex-parte injunction was set aside.
In any event, the Court is of the considered view that

the Defendant has provided compelling reasons to
support a conclusion that this Report is a secret job.
Firstly, the PO states “Pipelines (PL222)” but the
Project Title, Document Title and contents of the
Report refer to “PL222RI-R4”. Secondly, the Report
is dated 16.1.2014 which is before the issuance of the
PO on 25.1.2014. Therefore, this Report could not
have been prepared by the Defendant pursuant to the
PO dated 25.1.2014 which, according to Zelim he
remembers very well because it was the very first PO
issued by the Plaintiff to the Defendant for a project
in Malaysia. Zelim gave a lengthy explanation as to
why he has a vivid recollection of this PO and that
the Defendant performed the work for PL222 in June
2014 as hand written on the third page of the PO
(refer NoE Vol. 18 on 21.1.2020 at pp 43 and 44).
Thirdly, the Report does not have the Defendant ’s
logo. Instead it has the logo of “PNR Inspection Sdn
Bhd” (‘PNR’). Zelim also referred to para 2 of the
Report which states that the Plaintiff and PNR shall
carry out the work. However, PNR is a company
53
which is unknown to the Defendant and it has never

worked with PNR.
(v) Report Studies For Provision Of Reliability Study

Utilizing Phonon Diagnostic Technology On 2 Units
Of Slug Catchers SC-8020 & SC-8040 dated
22.5.2014 (exhibit P146)
The Plaintiff’s arguments in respect of this Report

are identical as that for the Report in subpara (iii)
above and the Defendant’s responses are equally
alike. The Defendant offered two other reasons as to
why this Report is in fact a secret job. The first PO
issued by the Plaintiff to the Defendant dated
25.1.2014 (exhibit D179) was already attention to
Zelim. As such, as at the date of this Report ie, 22.5.
2014, the Plaintiff was already dealing with Zelim
and not Prof. Vladimir. Furthermore, there was no
PO and/or an invoice for this project. The Court finds
there are merits to the Defendant’s contentions.
(vi) Final Report for Provision of Integrity Assessment of

Cold Box ASU-1 at Utilities Kerteh (UK), Petronas
Gas Berhad dated 4.11.2016 and 9.11.2016 (exhibits
P115, P116 and D195)
Ms. Manjit submitted that Zelim only made reference

to exhibit D195 to support his allegation of a secret
project but the Reports in exhibits P115 and P116
show that HATs, and not PDT, was utilis ed for this
project. A comparison of the two latter Reports to
exhibit D195 would further show that the words “an
enhanced Phonon Diagnostic Technology” was
incorporated into the Report in exhibit D195 as per
54
PGB’s request reflected in the Minutes of the

“Management Meeting & Project Progress Summary
For Price Agreement For Phonon Diagnostic
Technology Inspection Services For Gas Processing
And Utilities Division, Petronas Gas Berhad” held at
PGB, Kerteh, Terengganu on 17.5.2016 which was
attended by Hazim (exhibit P201). In addition, the
site work for this project was carried out in June
2016 ie, post-termination of the Agency Agreement
and since HATs services were provided, there was no
obligation on the Plaintiff to inform the Defendant of
this project.
I have considered the opposing accounts of events

put forth by the parties and in my opinion, there are
convincing reasons to accept the Defendant’s
version. The provision of the services which is
covered by this Report was made under the LoA and
Contract between PGB and the Plaintiff, and despite
the termination of the Agency Agreement. Zulfaiz
testified that it was the Plaintiff who informed PGB
that HATs is an enhanced version of PDT. PGB
requested for PDT and was under the impression that
PDT was being performed for the inspection. When
PGB realised that the word HATs were used in the
reports, the matter was discussed in the meeting held
on 17.5.2016. Based on Item 1 in the Discussion
Notes of the said meeting which was prepared by the
Plaintiff itself (exhibit P201), the issue was stated as
“Enhanced Acoustic based technique (HATs)
currently being used for diagnostic work” and the
action required was:
55
“- MRA agreed to use term PHONON in the report
- MRA to revise one (1) report first and submit to

PGB for review and approval
- Upon approval, MRA to revise all report that

contents the terms HATs to PHONON”.
A plain reading of the Discussion Notes indicates

PGB’s intention in wanting the Plaintiff to revise one
report first by substituting the term “HATs” with
“PHONON” and once approved by PGB, the Plaintiff
was to revise all the other reports in the same
manner. Hence, the Defendant correctly submitted
that PGB did not request the Plaintiff to state in the
report the words “an enhanced Phonon Diagnostic
Technology” as alleged by the Plaintiff. PGB’s
request is a clear indication that it wanted PDT all
along.
(d) Sometime in October 2015, the Defendant discovered that

the Plaintiff had in fact conducted the purported “PDT
Services” by deploying the Plaintiff’s employees
comprising of the Russian “Phonon Specialists” and
Malaysian “Phonon Engineers”. Zulfaiz had produced the
Daily Progress Reports dated 13.9.2015 and 14.9.2015,
which was forwarded to him vide e-mail dated 15.9.2015
by the Plaintiff’s Project Engineer, Izyani Ismail [exhibit
D184(a)] stating that the “Phonon Activities for all
pipings” have been completed and “only insulation
reinstatement work for remaining 3 pipings expected to be
finish up by next week”. The Daily Progress Reports were
sent to update Zulfaiz on the site progress in relation to the
PDT Inspection Services for PGB. In addition , Zulfaiz
56
produced the List of Manpower Details dated 11.10.2015

for PGB’s Cold Box E5-0407, 0408 and 0410 and Cold
Box E6-0407, 0408 and 0410 which was forwarded to him
via e-mail by the Plaintiff’s Project Coordinator, Ainul
Adri bin Basmi [exhibit D184(b)]. Although the Plaintiff
claimed that HATs was carried out for these Cold Box, but
the List of Manpower Details shows, inter alia, the names
of “MRA’s Workforce” consisting of 7 Malaysians, 3 of
whom are “Phonon Engineer” and 5 Russian “Phonon
Specialist”. 2 of the “Phonon Engineer” were called as
PW1 and PW2 and they admitted, under cross -
examination, that they are not Phonon Engineers. Zulfaiz
had additionally testified that the reason he was under the
impression that PDT was performed was because the
Plaintiff had informed him that it was so. The Court is of
the view that Zulfaiz’s evidence, akin to Ms. Sim’s, is
sufficient and trustworthy enough to meet the objectives
upon which the Defendant had elected to call him in the
first place.
(e) On 14.10.2015, Zelim sent an e-mail to Hazim, Datuk

Fariz and Khosim (exhibit P95) to convey that the
Defendant has become aware of the illegal/ fraudulent
actions of the Plaintiff and the gross violation of the
Agency Agreement, specifically that:
“… MRA illegally performed and continues to

perform exactly Phonon Diagnostics on the objects of
Petronas Gas Berhad (Cold Box, Piping and Double
Wall Tank according to Contract No SMSO/PGB-
GPU/2014/0327) without any awareness and
permissions of Diatech, using unoriginal (imitative)
Phonon equipment with the involvement of third
57
parties under the guise of Phonon specialist not

being part of certified Diatech staff.
Thus, the SPC Diatech faced with acts of fraud,

deception, breach of copyright and patent rights, as
well as falsification of technical reports, licenses and
legal documents for Phonon specialists and Phonon
equipment by MRA.
In addition, MRA illegal involvement of third parties

uncertified by Diatech and unlawful use of the
equipment of unknown origin for provision of
services under the guise of Phonon Diagnostics, first
of all, are misleading and violating the rights of
Petronas company as the end customer for the
inspection of technical state of Petronas industrial
facilities to ensure their safe operation.
Technical reports presented by MRA under the

guise of Phonon Diagnostic reports are not original
and more over - do not reflect the actual technical
condition of Petronas industrial objects, and,
therefore, poses a direct threat of accidents and
environmental disasters at industrial facilities of
Petronas company with cause of irreparable damage
to the environment and ecology of Malaysia.
SPC Diatech considers this situation

unacceptable and intolerable!
For all the above violations and unfair

execution of obligations by MRA, SPC Diatech
demands the immediate termination of all services
provision under the guise of a Phonon Diagnostics,
58
cancellation and annulment of all technical reports

and diagnostic results, and urgent written
explanation of all the circumstances of this case by
October 16 th 2015.
Special warning to notice to MRA: SPC Diatech

is going to officially apply to the parent company of
Petronas, Petronas Gas Berhad and other Petronas
subsidiaries to officially inform all parties involved
about the revealed illegal (fraudulent) actions
performed by MRA. …”.
Hazim had replied to the above vide an e-mail dated

2.3.2017 (exhibit P96) by basically denying all the
Defendant’s allegations.
The Plaintiff’s other contentions
[70] The Plaintiff gave several reasons in rebutting the Defendant’s

allegation that the Plaintiff had claimed to offer PDT services
when in reality the Plaintiff did not provide the same and
thereby misled the customers. These reasons are dealt with in
the succeeding subparas.
(a) Blanket Contract
The Plaintiff relied on the evidence given by Hazim and

Datuk Fariz in submitting that the appointment of
contractors for Asset Integrity Assurance services by way
of blanket contracts is a common practice in the oil and
gas industry and that the contracts awarded by Repsol
(exhibit P105, specifically Article 1.1.17 on the definition
of “Release Order” and Article 2.1), PGB (“Price
Agreement For Phonon Diagnostic Technology Inspection
59
Services For Gas Processing And Utilities Division,

Petronas Gas Berhad” dated 12.3.2015 in exhibit P106,
specifically Article 2.1.24 on the definition of “Works”
and “Exhibit VI – Administrative Procedures (B) Process
Flow For Payment Request” to the contract) and PCSB
(“Provision For Phonon Diagnostic Technology Inspection
Services For Petronas Carigali Sdn Bhd” dated 17.4.2015
in exhibit P10, specifically Article 2.1.22 on the definition
of “Scope of Works” and “Exhibit VI – Administrative
Procedures (B) Process Flow For E- Invoicing” to the
contract) are blanket contracts which enable the asset
owners to order other services as they require and the
Plaintiff to render such services for a fixed period of time
within the scope of the contracts. In this respect, the title
of the contracts do not in any way limit the services to be
provided by the Plaintiff to the customers. The Plaintiff
claimed that certain aspects in the testimonies given by
Ruzlan (PW3), Praba and Ms. Sim have substantiated the
existence and usage of blanket contracts in the indu stry
and that the contracts as abovementioned are indeed
blanket contracts.
Before proceeding further, it is necessary to have a closer

look at the provisions in the contracts cited by the Plaintiff
and a few other related provisions which, for ease of
reference, are quoted below:
Articles 1.1.17, 1.1.20 and Article 2.1 in exhibit P105 (the

Repsol contract):
“1.1 Definitions
The following definitions shall be used for the

purpose of interpreting the CONTRACT.
60
Further definitions not contained in this Article

shall apply to the Section in which they are
stated and subsequent Sections:
1.1.17”RELEASE ORDER” means a document

issued by the COMPANY requiring the
provision of the SERVICES by the
CONTRACTOR and issued in accordance
with Section VII – ADMINISTRATION
PROCEDURES.
1.1.20 “SERVICES” shall mean all services

and work (including DELIVERABLES) to
be provided by the CONTRACTOR
(including provision of EQUIPMENT and
other supplies) as described in Section IV
– SCOPE OF SEVICES AND TECHNICAL
SPECIFICATIONS and all of
CONTRACTOR’s activities that are
reasonably inferred from the description
of such services or work.
2.1 This CONTRACT does not constitute or imply a

commitment by the COMPANY to obtain any
specific SERVICES from the CONTRACTOR
under this CONTRACT. Commitment for any
SERVICES under this CONTRACT shall be
made, if at all, through the issuance of specific
61
RELEASE ORDER(s) by the COMPANY at any

time and from time to time during the
CONTRACT primary period or extended period
in accordance with the terms hereof.
CONTRACTOR undertakes that it shall carry
out the SERVICES specified in any RELEASE
ORDER in accordance with the terms and
conditions of the CONTRACT.”.
Article 2.1.24 in exhibit P106 (the PGB contract):
“2.1 The following definitions shall apply to this

CONTRACT except where the context otherwise
requires:
2.1.24”WORKS” means the work to be performed

and rendered by the CONTRACTOR or its SUB-
CONTRACTOR, as expressly set forth in this
CONTRACT, which is more particularly
described in EXHIBIT I – SCOPE OF WORKS
attached herein, and all of CONTRACTOR’s
and/or its SUB- CONTRACTOR’s activities that
are reasonably inferable from the description
of the said SCOPE OF WORKS, including any
other activity which is not specified in this
CONTRACT but which in the course of the
WORKS becomes necessary for completion to
be effected.”.
Article 2.1.22 in exhibit P10 (the PCSB contract):
62
“2.1 The following definitions shall apply to this

CONTRACT except where the context otherwise
requires:
2.1.22 “SCOPE OF WORKS” means all duties to be

performed and rendered by the CONTRACTOR
or its SUB- CONTRACTORs, including the
purchase, rent or lease of GOODS, as
expressly set forth in this CONTRACT, and all
of CONTRACTOR’s and/or the SUB-
CONTRACTOR’s activities that are reasonably
inferable from the description of the SCOPE
OF WORKS, including any other activity which
is not specified in this CONTRACT but which
in the course of the SCOPE OF WORKS,
becomes necessary for its completion.”.
It is trite law that a contract must be read as a whole in its

commercial setting in order to ascertain the true m eaning
of its clauses and that the words of each clause should be
so interpreted as to bring them into harmony with the other
provisions of the contract if that interpretation does no
violence to the meaning of which they are naturally
susceptible (see NE Ry v. Hastings [1900] AC 260 at p 269
quoted by the High Court in UDA Holdings Bhd (formerly
known as Perbadanan Pembangunan Bandar) v. Melewar
Leisure Sdn Bhd (formerly known as Harta Bumi Sdn Bhd)
[2009] 2 MLJ 408 at p 426).
This Court has scrutinised the Repsol, PGB and PCSB

contracts and it is unquestionable that the central feature
of these contracts is that the inspection technology to be
63
utilised was expressly spelt out in that PDT services were

to be performed (see in particular, Section IV - Scope Of
Works / Technical Specifications in the Repsol contract;
and Exhibit I - Scope Of Works in the PGB and PCSB
contracts). As for the PGB contract, the Defendant had
even provided the Letter of Guarantee to PGB (exhibit
D166) as alluded to earlier in this judgment.
To the Defendant, the procedure which entails the issuance

of instructions by the customer for services required by
way of a PO or Release Order is a non -issue (refer for
instance to Clause 8 in Section IV of the Reps ol contract).
What is the bone of contention, however, is the fact that
the Plaintiff did not issue a single PO or Release Order
under the Repsol and PGB contracts to the Defendant
whilst under the PCSB contract, only one PO was issued.
The argument advanced by the Plaintiff that the services

are not limited to the services as stated in the Contract
Title is correct to the extent that the Articles as above
quoted provide that the activities to be performed by the
Plaintiff may include any other activity whi ch is not
specified in the contract but which, in the course of the
works or scope of works, becomes necessary for
completion of the same. However, this does not mean that
the contracts can be equated as open/ blanket contracts in
the sense that the Plaintiff could use any technology when
conducting the inspection of the customers ’ assets. This
would fly in the face of the clear terms in the contracts
which provide that the Plaintiff is to perform inspection
using PDT. Moreover, Ms. Cindy had cited the case of
Charles Grenier Sdn Bhd v. Lau Wing Hong [1996] 3 MLJ
327 at p 336 where the Federal Court had referred to Dr.
64
Geoffrey Chesire’s The Modern Law of Real Property

which described an open contract as “If a contract for sale
specifies merely the names of the parties, a description of
the property and a statement of the price, it is called an
open contract. When this form of contract is made, the
parties are bound by certain obligations implied by the
law.”. This definition is nowhere close to what had been
submitted by the Plaintiff to this Court. The Plaintiff ’s
contention that the contracts are blanket contracts which
enables the customers to appoint the Plaintiff “to render
any services and not limited to PDT” would, if accepted,
place PDT as one of the many types of services that can be
rendered as opposed to PDT being a specific diagnostic or
inspection method. It defies logic for renowned companies
such as Repsol, PGB and PCSB to enter into an open/
blanket contract with the Plaintiff but had, at the s ame
time and in no uncertain terms, specified the particular
inspection technology to be utilised. Besides, if the
Plaintiff’s position about blanket contracts is true, then the
said Letters would not in any way interfere with the
contractual relationship between the Plaintiff and its
customers but yet, the Plaintiff complained that as a result
of the said Letters, the Plaintiff was subjected to
clarification and no further jobs were given to it by Repsol
and Occidental.
The evidence given by Ruzlan and Praba on this matter

cannot be regarded as determinative in any way since they
were not involved in the negotiations of the contracts with
PCSB and Repsol, respectively and would therefore be
unable to say what was the intention of the parties at the
material time. Praba’s testimony that “Blanket Agreement
65
No. 150882” is stated on the Release Orders in exhibits

P107, P108 and P109 merely goes to show that the Release
Orders were issued pursuant to Contract No. 150882 in
exhibit P105. Praba had said that in gist “… the terms and
conditions and what can be carried out is between the
contract but issuing the contract itself to MRA does not
imply that we have a commitment. Commitment for a
specific work only comes through the issuance of Release
Order. And that Release Order has to be issued by the
company based on specific work that the company will
require them to undertake.” (see NoE Vol. 8 on 10.7.2019
at p 25). Seen in its entirety, Ruzlan ’s and Praba’s
evidence do not undermine the fact that the PCSB and
Repsol contracts contain a fundamental term for the
provision of PDT inspection services, which is the
description that appears in the Release Order in exhibits
P107, P108 and P109.
When viewed in its totality, the Court is inclined to agree

with the Defendant that the Plaintiff introduced the
fictitious concept of blanket/ open contract in an attempt
to justify the inspection works that the Plaintiff had
performed for Repsol, PGB and PCSB.
(b) PDT hardware and software and the Defendant’s expert

diagnosticians
The Plaintiff relied on the evidence given by Hazim, Datuk

Fariz, Ilia (DW2) and Zelim in submitting that:
(i) only the Defendant has PDT hardware and software

which it specially invented and manufactured. PDT
hardware is the exclusive property of the Defendant
and the software is not available in the market. The
66
Defendant is the sole company in the world which

has Phonon equipment and technology in industrial
diagnostics;
(ii) PDT can only be performed using PDT equipment

owned by the Defendant and used by certified PDT
specialists or engineers trained by the Defendant on
PDT;
(iii) the PTD equipment were under the control of the

Defendant’s expert diagnosticians at all times and
upon the termination of the Agency Agreement, the
PTD equipment were taken back by them to Russia;
(iv) the Defendant did not adduce any evidence in court

to show that the Plaintiff had returned part of the
equipment that was kept in the Plaintiff’s office as
alleged by Zelim, in particular the e-mail
correspondence between him and Datuk Fariz and the
warehouse software or the log which purportedly
shows the movement of the PDT equipment;
(v) to provide HATs, the Plaintiff utilises acoustic based

equipment that originate from the United States of
America and are readily available in the market. The
equipment which Alex collected in Russia pursuant
to the Letter of Attorney issued by Datuk Fariz on
30.4.2015 (exhibit P210) are acoustic based. PDT
cannot be provided with such equipment;
(vi) HATs was performed by the Plaintiff’s employees of

various nationalities and not by any of the
Defendant’s expert diagnosticians; and
67
(vii) when a specialist leaves the Defendant, his PDT

certificate will be annulled. Hence, any qualification
of the Defendant’s former employees including Alex,
Marina and Skyrabin are of no advantage and
relevance to the Plaintiff.
In its Reply Submission, the Defendant explained the

alleged use of the Defendant’s hardware and software by
the Plaintiff without the Defendant’s consent by reference
to the timeline before and after the Defendant ’s PDT
specialists had come to Malaysia to work on the projects.
Much reliance was placed on Zelim’s testimony in
rebutting the Plaintiff’s submission that the Defendant did
not adduce evidence in the form of the warehouse software
or log to show that the Plaintiff had returned part of the
diagnostic equipment which was allegedly kept in the
Plaintiff’s office. According to Zelim, there is no need to
provide such documents to the court because there is
sufficient evidence in the form of PDT reports prepared by
the Plaintiff to show the use of the PDT software and
hardware. In addition, the log contains confidential
information of the equipment used for the Defendant ’s
other clients. Zelim further said that:
“… when Professor Shukhostanov came to Malaysia for

presentations in 2013, he carried with him PDT equipment.
… He kept it at MRA’s office for convenience and storage
purposes, not to carry the equipment every time to and
from Russia. At the time, there was no possibility or
thought that MRA might use this equipment because they
did not know how to use it. We did not even consider to be
concerned about this. Not to mention that at the time, we
had trust in MRA, which was our partner at the time. We
68
had no knowledge that they came to an agreement behind

our backs with Alex Tsybanov to carry out PDT work using
this equipment. Alex of course knew how to use the PDT
equipment, and so he did. That’s why in the report for PL-
106, Alexander Tsybanov is mentioned. And this is how our
PDT software screenshots got into the report on PL -106.”.
Now, lest it be forgotten, the context in which the P honon

equipment was mentioned in the 2 nd Statement in the said
Letters is that “ … MRA simulated inspections of
infrastructure facilities by the PHONON method, although
it does not possess the relevant knowledge, necessary
PHONON equipment or PHONON trained technical staff.”.
The key words are “simulated” which means “to do or
make something that looks real but is not real ” and
“possess” which means “to have or own something” (refer
the Cambridge Dictionary at
https://dictionary.cambridge.org/dictionary/eng lish/simula
te and
https://dictionary.cambridge.org/dictionary/english/possess
). In other words, what the Defendant alleged in the said
Letters is that the Plaintiff had made it loo k like it was
providing PDT to the customers when in reality, the
Plaintiff did not have or own the knowledge about PDT
and Phonon equipment or trained specialist.
From the evidence at the trial and the Plaintiff ’s

submissions, the Plaintiff does not dispute that it does not
have or own the relevant knowledge and that it does not
own Phonon equipment. The Plaintiff has gone to great
lengths to convince the Court that it did not have PDT
equipment at the material time to enable it to simulate
inspections by the PTD method. However, Zelim had
69
testified that the PDT equipment were brought to Malaysia

in 2013 for purposes of the Defendant ’s presentations with
the Plaintiff and that the equipment were kept at the
Plaintiff’s office. Hence, even if the Defendant ’s
equipment warehouse data was produced in court, it would
show the movement of the equipment from Russia to the
Plaintiff’s office in Malaysia but not the logistics of the
equipment thereafter.
Furthermore, the contents of the Report Studies Provision

For Reliability Study Utilizing Phonon Diagnostic
Technology For PL 106 (From MCOT to SBM-5), 30”,
1.2KM Above Ground Pipeline dated September 2013
(exhibit P4; ‘PL 106 Report’), clearly shows the PDT
software screenshots where some of them even have the
Cyrillic alphabet. In their Witness Statements, Hazim and
Datuk Fariz said that for Phase 1, Prof. Vladimir would
send several PDT experts together with PDT hardware and
software from the Defendant to be stationed at M iri,
Malaysia.
The same observations can be made about the Report

Studies Provision For Reliability Study Utilizing Phonon
Diagnostic Technology On 2 Units Of Slug Catchers SC-
8020 & SC-8040 dated 22.5.2014 (exhibit P146; ‘Slug
Catchers Report’)) which again shows the PDT software
screenshots and some with the Cyrillic alphabet. The site
inspection is stated in the Report as having been performed
in April 2014. This is the period when Zelim had made his
first visit to Malaysia in February 2014 and by Hazim’s
and Datuk Fariz’s own narratives, the PDT equipment was
kept in a dedicated room at the ground floor of the
Plaintiff’s office. Therefore, there is no doubt that at the
70
time when the inspections for PL 106 and the slug catchers
were carried out, the Plaintiff did have the PDT
equipment.
With regards to the Plaintiff’s contention that it did not

have the Defendant’s expert diagnosticians, the impugned
statement says “PHONON trained technical staff”. The
Plaintiff does not dispute that Alex and Marina were
former employees of the Defendant. Ilia had given detailed
evidence as to how he came to discover the Plaintiff ’s act
in preparing working visas for Alex and Marina sometime
in May 2015. Ilia also found out that the Plaintiff had
prepared the Letter of Attorney dated 30.4.2015
authorising Alex to collect equipment from Moscow. Ilia
then informed Zelim about these incidents and this led
Zelim to send the e-mail dated 18.5.2015 demanding for
the Plaintiff’s explanation.
(c) “Phonon” is a generic word
The Plaintiff submitted that Hazim had testified that

“Phonon” is a generic word. It was contended that the term
“Phonon Engineer” and “Phonon Specialist” in the Repsol
contract, Workpack and Daily Progress Report (exhibits
P105, D181 and D251); PGB Daily Progress Report and
List of Manpower [exhibits D184(a) and (b)]; Curriculum
Vitae (‘CV’) (exhibits D173 to D175 and D246); and
Employment Pass of Alex, Marina and Skryabin (exhibits
D168 and D169) were not created by the Defendant and
did not indicate that the said individual is providing PDT.
The Plaintiff claimed that not a single document that
originates from the Defendant uses the said term.
Furthermore, the Defendant had pleaded that an employee
71
who has completed the PDT training conducted by the

Defendant would be certified as a “Phonon Expert
Diagnostician” and this was confirmed by Ilia and Lidiia.
Lidiia went on to say that the Defendant was trying to
unify the designation to comply with the national classifier
of designations and was, at the time of her evidence in
court, using the term Engineer of First, Second and Third
Category.
It seems to me that the Plaintiff’s contentions have missed

the mark. It is irrefutable that the Defendant has obtained a
trademark registration for the word “Phonon” under the
TMA 1976 (exhibit D266). Sub-s. 10(1) of the TMA 1976
provides that in order for a trademark other than a
certification trade mark to be registrable, it shall contain
or consist of at least one of the particulars as stipulated in
paras (a) to (e) which includes “any other distinctive
mark” where the words “distinctive mark” is defined in
sub-s. (2A). Applying the provision of sub-s. 35(1), the
registration of the Defendant as registered proprietor of the
trademark “Phonon” in respect of diagnostic services shall
give the Defendant exclusive right to the use of the trade
mark in relation to those services subject to any
conditions, amendments, modifications or limitations
entered in the Register. The Defendant also hold a
“Certificate of trademark (service mark)” for “Phonon” in
Russia. Therefore, the word “Phonon” cannot be said to be
a generic word in so far as diagnostic service is concerned.
It necessarily follows that the Defendant ’s experts who
performs PDT would have the word “Phonon” in their
designation ie, “Phonon Expert Diagnostician”, “Phonon
Engineer” and/ or “Phonon Specialist”.
72
Furthermore, as submitted by the Defendant, out of several

generic terms in physics, it is devoid of logic for the
Plaintiff to choose and use the word “Phonon” as a
reference for its employees who are said not to perform
any phonon diagnostic inspection but only acoustic
inspection. Instead of designating them as “Acoustic
Engineer” or “Acoustic Specialist”, the word “Phonon” is
used even though as Khairul (PW1) and Firdaus (PW2) had
admitted during cross-examination, they are not Phonon
Engineers. The irresistible conclusion is that the Plaintiff
did so with the intention of misleading the customers into
believing that PDT services were being provided.
Termination of the Agency Agreement
[71] It is irrefutable that the part in Statement 3 which states that the
Defendant has terminated the Agency Agreement and closed all
business with the Plaintiff is true. With regards to the part which
states that “Having learned of the illegal actions of the Plaintiff,
the Defendant terminated the Agency Agreement ”, the Plaintiff
submitted that since the reasons for termination were not stated
in the termination letter dated 24.2.2016 (exhibit P97), the
Defendant thus had failed to justify this statement.
[72] In SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor

[2016] 1 MLJ 464, the Federal Court held, inter alia, that the
question of valid termination turns upon whether or not there
was in fact a valid reason at the time of termination and not on
whether or not the terminating party (subjectively) knew or
believed there to be one. The relevant passage from the decision
delivered by Zainun Ali FCJ is shown below:
“[23] It is trite law that ‘if a party refuses to perform a
73
contract (ie, wishes to terminate), giving a wrong or

inadequate reason or no reason at all, he may yet justify
his refusal it there were at the time facts in existence
which would have provided a good reason, even if he did
not know of them at the time of his refusal’ (see Chitty on
Contract (32nd Ed) E Peel (eds) at 24-014). The question
of valid termination, therefore, turns upon whether or not
there was in fact a valid reason at the time of termination
and not on whether or not the terminating party
(subjectively) knew or believed there to be one.
[24] Curiously, the submissions of learned counsel for the

appellant offer little help in establishing, as a matter of
principle, that termination by notice requires the
communication of particularised reasons from the
terminating party to the non-terminating party.
Accordingly, no such principle exists in the general law of
contract.”.
[73] Having held that there is no requirement for particularised

reasons to be communicated by the terminating party to the non-
terminating party under the general principles of contract law,
the Federal Court then considered the issue as to whether
particularised reasons were required for a notice of termination
in accordance with the contractual p rovisions in the agreement
between the parties in that case.
[74] In the instant case, Clause 6 in the Agency Agreement governs

the “TERM AND TERMINATION” of the Agreement in the
following manner:
“6.1 This Agreement shall be in effect for a period of five

(5) years from the date of this Agreement.
74
6.2 Either party is entitled to terminate this Agreement

by giving a written notice to the other party in the
following events:
a. If their party is in breach of any obligation

specified hereunder and fails to remedy such
breach within fifteen (15) days upon receipt of
a written notice specifying the breach and
requiring its remedy; or
b. If either party becomes insolvent or

bankruptcy, has a receiver appointed over the
whole or any part of its assets, enters into any
compound with creditors, or has an order made
or resolution passed for it to be wound up.
6.3 Notwithstanding the provisions stated hereunder,

either party is entitled to terminate this Agreement
by sending a written notice to the other party at least
thirty (30) days in advance.”.
[75] The issue as to whether the opening words of Statement 3

referring to the “illegal actions” of the Plaintiff are true or
substantially true is dependent on the analysis of the evidence
before the Court concerning the other impugned statements.
Since this Court has pronounced the decision in the present suit,
it can safely be said at this juncture that the Court has concluded
that the Defendant has successfully proven its case of illegal
actions on the part of the Plaintiff. There is ample evidence to
support the Defendant’s position that, prior to the issuance of
the termination letter, it had discovered about these illegal
actions and hence, there is in fact a valid reason to bring the
Agency Agreement to an end.
75
[76] In these circumstances, the Defendant was well within its

contractual rights in invoking Clause 6.3 of the Agency
Agreement as stated in the termination letter. The words
“Notwithstanding the provisions stated hereunder ”, given their
natural and ordinary meaning, are reflective of the intention of
the parties that the right of either party to terminate the
Agreement upon 30 days’ notice in advance is preserved despite
the provision of Clause 6.2 and any other provision in the
Agreement.
Statements 6 and 7: The Plaintiff claimed relationship between

HATs and PDT and giving the impression
that they have equal capabilities – leeching
on PDT to promote HATs
[77] It is the Defendant’s stance that HATs is a name concocted by

the Plaintiff after complaints were made by the Defendant to the
Plaintiff and in anticipation of the termination of the Agency
Agreement. After the termination of the Agency Agreement, the
Plaintiff continued to promote HATs but it still used the same
explanation and drawings in relation to PDT so as to promote
HATs.
[78] The Defendant relied on the following documents in submitting

that the Plaintiff intentionally misled customers into believing
that HATs is related to PDT in that it is supposedly an enhanced
version of PDT and is based on phonon technology or has
similar technical capabilities with PDT:
(a) HATs Reports which the Plaintiff had prepared and

provided to the customers:
76
▪ Final Report On Integrity Study Using Hybrid

Acoustic Technology System (HATs) For Bottom Tank
T-82 At MCOT, Miri dated 24.6.2016 (exhibit P20);
▪ Final Report On Integrity Study Using Hybrid

T-4210 At MCOT, Miri dated 24.6.2016 (exhibit
P22);
▪ Final Report for Provision of Integrity Assessment of

Pipings at Utility Kertih (UK), Petronas Gas Berhad
dated 15.6.2016 and 26.7.2016 (exhibit P128);

Interplant Pipings at Gas Processing Kerteh (GPK),
Petronas Gas Berhad dated 26.10.2016 (exhibit
P148); and

Cold Box ASU-1 at Utilities Kerteh (UK), Petronas
Gas Berhad dated 4.11.2016 (exhibit D195);
(b) the presentations on “Hybrid Acoustic Technology (HAT)

Intelligent Screening Tool For Asset Integrity Assessment ”
by the Plaintiff and Velosi (exhibit D189) and by the
Plaintiff (exhibit D64) as compared to the presentation on
“Phonon Diagnostic Technology (PDT) Intelligent
Screening Tool For Asset Integrity Assessment ” by the
Plaintiff (exhibit P139);
(c) exhibition materials on HATs in Saudi Arabia;
(d) the Plaintiff’s Technical Proposal on HATs; and
77
(e) newspaper cutting titled “VSSI focuses on developing niche

environmental-friendly processes” marked as ID. D234(a)
(in black and white) and ID. D234(b) (in colour). In this
regard, the Defendant submitted that the newspaper article
ought to be admissible pursuant to sub-s. 60(3) of the
Evidence Act 1950 [Act 56] (‘EA 1950’) and the legal
principle as held in Ho Chien v. PP [1936] 1 JLR 114 that
evidence other than the object itself, which in this case is
the original copy of the article, can be produced to prove
the existence of the said object, if it is the best evidence
that can be reasonably obtained under the circumstan ces.
[79] For the Plaintiff, Ms. Manjit submitted that HATs and PDT are
completely two different technologies utilising two different
concepts. The name of the technologies are also distinctly
different and do not in any way cause confusion. It was further
submitted that the Plaintiff never claimed a relation between
HATs and PDT because HATs is far superior compared to PDT
and PDT is viewed as a failed technology with many complaints
and restrictions on its usage.
[80] The Plaintiff’s basis of comparison is the presentation slides on

HATs in exhibit P142 as against the slides on PDT in exhibits
P139, P140 (the Plaintiff’s presentation on PDT) and D261
(“SPC Diatech LLC Company Presentation ”) which the Plaintiff
argued would show that the materials used for the HATs
presentation is completely different from the materials used for
the PDT presentation albeit some hardware used in the course of
the inspection may be similar.
[81] In so far as the evidence adduced by the Defendant to justify the

impugned statements, the Plaintiff contended that the
presentations relied upon by Zelim are the PDT presentations
78
whilst Hazim’s testimony made reference to the Plaintiff ’s

presentation on HATs to PCSB dated 21.3.2016 (exhibit P142)
wherein Zelim had admitted did not contain any information on
PDT.
[82] I will first deal with the Plaintiff’s submission on the issue of
pleading viz. that it is not the Defendant’s pleaded case that the
Plaintiff claimed HATs is an improved version of PDT and so
the Defendant must not be allowed to submit on a case which is
not pleaded. It is my considered view that the issue of HATs as
being an enhanced PDT is to illustrate one of the ways in which
the Plaintiff had misrepresented to customers about the
diagnostic and inspection to be applied in a particular project
and had leeched on the reputation of PDT so as to promote
HATs. This same issue had already been raised at the hearing of
the application for an interlocutory injunction and therefore, the
Plaintiff is not taken by surprise. No objection was raised by the
Plaintiff during the trial and I do not think that the Defendant is
attempting to improve on its pleaded case such that it should be
barred from making submissions on the matter.
[83] It cannot be denied that under “Methodology” in exhibits P20,

P22 and P128, there is a statement which reads “… (HATs), an
enhanced Phonon Diagnostic Technology Inspection method is
an advanced diagnostic and assessment technique to study
reliability of a specific candidate.” whilst under “Executive
Summary” in P148 and D195, it says that “MRA employed …
(HATs), an enhanced Phonon Diagnostic Technology. ”.
[84] Ms. Cindy referred to The Concise Oxford Dictionary of Current

English (9 th Edition), Clarendon Press, 1995 and this Court had
79
also looked up the online Cambridge Dictionary where

“enhance” means “improve” and “better than before”,
respectively. Therefore, by stating that HATs is an enhanced
PDT, the Plaintiff is claiming that there is a relationship
between HATs and PDT in the sense that HATs is an improved
or better version of PDT. It is ironical that there is such a
connection in the HATs Reports as abovementioned when at the
same time, Hazim was trying hard to impress upon the Court
that PDT is a failed technology and the Plaintiff does not want
HATs to be associated with PDT at all.
[85] The Plaintiff’s argument that the testimonies given by Zulfaiz

and Zelim prove that the usage of the phrase “HATs, an
enhanced PDT” in exhibits P128, P148 and D195 and was done
purely at the request of PGB has been dealt with earlier and
rejected. The Court takes the view that the contemporaneous
documents support the Defendant’s contention that the Plaintiff
had intentionally claimed a relationship between PDT and HATs
by giving false information to its customers that HATs is an
enhanced version of PTD in order to leech upon the goodwill of
PDT.
[86] As for the Plaintiff’s power point presentation of HATs, the

Court has closely examined –
(a) the slides for the presentation on HATs by the Plaintiff and
Velosi (exhibit D189) and by the Plaintiff (exhibit D64)
together with the Plaintiff’s presentation on PDT (exhibit
P139); and
(b) the images from the slides as reproduced in Annexure B to

the Defendant’s Written Submission, and the irresistible
conclusion is that the slides in the presentation on HATs
80
are not only similar to the slides in the presentation on

PDT, but some slides are in fact identical.
[87] At the trial, Syafiq (DW4) had testified that he was involved in
the preparation of the slides on HATs marked as exhibits D64,
D65, D192, D193 and D189 by contributing the technical parts.
He confirmed that the slides in exhibit D192 (September 2016)
were presented to PGB wherein mention is made of the
objectives of the presentation which, among others, was to brief
PGB on the contract with the Plaintiff (exhibit D167). Under
“Project Scope”, the following statement can be seen (with my
added emphasis):
“To provide professional and satisfactory s ervices using

Phonon Diagnostic Inspection to inspect PGB’s static
equipment, which includes but not limited to piping, tanks,
cold boxes and structures during construction,
commissioning, in-service, repair, alteration, rerating, re-
commissioning, shutdown and turnaround to conform with
statutory requirements, construction and inspection codes,
and PETRONAS Technical standards (PTS).”.
[88] Syafiq further stated that the slides in exhibit D193 were
presented to MTBE Malaysia Sdn Bhd (‘MTBE’) in 2016 by Ir.
Jaafar Ahmad and himself to inform the client about the
enhancement of the technology from Phonon to HATs. This can
be seen in the slide on “Background” as follows:
• “A technology presentation and proposal on Phonon

Diagnostic was made in August 2015.
• Since incorporation, MRA has conducted inspection

and assessment for 40 projects.
81
• Based on these experience, we have further develop

and enhance the technique called HATS.
• MRA has carried out numbers of project employing

HATS.
• MRA shall be submitting a revise proposal based on

HATS.”.
[89] Ms. Manjit highlighted the evidence by Hazim and Datuk Fariz
that the Defendant, Prof. Validimir and Zelim did not provide
any information, document or presentation slides to market and
promote PDT. Datuk Fariz had gathered the information from
the presentation slides from Skypearl and Calidad (exhibits
P136 and P137), the Defendant’s website (exhibit P138) and the
webpage of Shanghai Daodun Science & Technology Co. Ltd.
(‘Shanghai Daodun’) (exhibit P141) to create the slides to
market PDT as per exhibits P139 and P140. To this, I would
accept the Defendant’s retort that the source of information
which brought about the presentation slides on PDT is
immaterial since the issue is not about those slides (which ar e
for purposes of comparison only) but the ones which the
Plaintiff had prepared in presenting and explaining HATs to its
customers. These slides evidently contain text, diagrams and
features which are similar to the slides on PDT.
[90] The Plaintiff contented that the HATs presentation slides in

exhibit P142 does not contain any information on PDT.
However, it is noted that the slide with the heading “Determine
Of Location And Size Of Anomaly” at p 3791, B25 in that exhibit
has Cyrillic alphabet. In any event, even if the Plaintiff’s
contention is true, it does not in any way undermine the
evidence which the Defendant has produced in respect of other
slides on HATs that do in fact contain such information.
82
[91] The Plaintiff also relied on the e-mail from one Diana Nguyen to
Masliyana Mohamad Khosim and copied to Hazim dated
19.12.2016 with the subject “Meeting on Dec. 23” (exhibit
P211) which begins as follows:
“…
1. Pls. advise your skype details. Thanks.
2. Below is the agenda for the meeting. We appreciate if

you sent us the answer for checking prior to the
meeting.
2.1 Velosi shall make the presentation for HAT

technique.
2.2 Velosi shall present for the steps to be

implement at side so that CL can have better
view for preparation.
…”
(emphasis added).
[92] The Court has read the entire e-mail and finds that it essentially
touches on the agenda for the meeting scheduled to take place
on 23.12.2016 including the list of questions for the Plaintiff
which will be raised by the client. The statement t hat “Velosi
shall make the presentation for HAT technique.” does not in
itself conclusively prove that Velosi had prepared the
presentation slides in exhibit D189 as alleged by the Plaintiff. It
is not uncommon for a person or a few persons to be tasked to
prepare slides for purposes of a presentation which would
finally be delivered by someone else who was not involved in
the preparation at all. Considering the doubts surrounding the
83
credibility of Hazim and Datuk Fariz (see subparas 131(f) and

(g) below), it is unsafe for the Court to accept the Plaintiff ’s
version of events without corroborative evidence from a
representative of Velosi.
[93] As for the Plaintiff’s submission that exhibit D189 was prepared
and presented by Velosi in the capacity as the Pla intiff’s local
partner in Vietnam as per the common practice, the Plaintiff ’s
appointment as the Defendant’s agent in Vietnam was covered
by the “Exclusive Agent Appointment Letter” for a period of 5
years from 17.6.2014 for the territory of South East Asi a
(exhibit P77). The said Appointment Letter does not expressly
provide that the Defendant’s prior written consent must be
obtained before the Plaintiff can appoint Velosi as its local
partner in Vietnam. However, the same reasoning on the need
for direct evidence by Velosi to support the Plaintiff’s
contentions is applicable in this respect as well.
[94] In similar vein, the Court finds that there is insufficient

evidence to support the Plaintiff’s submission that, following
the presentation to Cuu Long Company in Vietnam, the project
was finally awarded to the Defendant. Datuk Fariz merely stated
that “… the project was awarded to Diatech PDT … Actually
Velosi lost the deal.” without any documentary evidence as
proof (refer NoE, Vol. 7 on 9.7.2019 at p 54) . Zelim said “… We
work with Cuu Long in Vietnam. …” as part of a long answer to
Ms. Manjit’s question as to what Zelim meant when he used the
phrase “substantial goodwill and reputation” in his Witness
Statement (refer NoE, Vol. 13 on 18.10.2019 at p 53). When
read in its proper context, Zelim’s evidence cannot amount to a
confirmation of Datuk Fariz’s statement in court.
84
[95] The Plaintiff additionally asserted that based on the e -mail dated
27.5.2015 from Zelim to Hazim (exhibit P93), the Defendant
was aware that the Plaintiff was promoting other technologies at
the material time and so the Plaintiff then introduced HATs to
its customers. The relevant part of the email reads:
“I would like to emphasize once again, we have never

interfered in your relationship and communication with
other people and companies. It is your right to develop
MRA and its technologies, but without breaking our
interests and creating risks and challenges for Diatech.
And Mr. Tsybanov and Co. harmed and continue to harm
our company, creating threats and risks to our business. ”.
[96] Zelim had explained in court that examples of “other

technologies” that the Plaintiff was allowed to develop are
painting and cleaning, and fundamentally anything that would
not be in competition with PDT. This, to me, is perfectly
logical. It is preposterous of the Plaintiff to suggest that HATs
come within the scope of “other technologies” and that the
Defendant had no objections to the development of HATs.
[97] This leads me to Hazim’s claim as the inventor of HATs. I have

considered Hazim’s educational background, working
experience and evidence as a whole and I am inclined to
conclude that Hazim does not have the requisite ingenuity,
knowledge and skills to invent a complex diagnostic technology
with his limited exposure in this field of work. As submitted by
the Defendant, an invention usually takes years of research and
development as well as vigorous tests before a novel product can
finally be marketed. However, if Hazim’s testimony is to be
believed, he remarkably managed this feat within the span of
approximately one year and this purported new technology was
85
easily introduced and accepted by customers in the multibillion

oil and gas industry without any trials test s being carried out
beforehand by the Plaintiff. Hazim did not produce his journal
or notes or any documentary evidence at all to support his claim
as being the inventor of HATs. Nor was there any scientific
literature on the purported HATs diagnostic tech nology.
[98] In addition, the absence of a Petronas Standardised Work and

Equipment Category (‘SWEC’) Code for HATs is also telling.
Zelim testified (refer NoE Vol. on 9.1.2020 at p 26) that:
“I’m not sure how to explain why something doesn ’t exist.

I can explain how to prove when something does exist. For
example, in Petronas, technologies have codes. … All
technologies Petronas applies have a SWEC code. …
phonon technology has its SWEC code, and it is here in the
bundles. HATs does not have a SWEC code. If it existed, it
would have been listed by Petronas. Petronas lists
acoustic emission technology. There is no any recognition
whatsoever by international organisations of such
technology by the name HATs. …”.
[99] Yet more pertinent questions arise from the Plaintiff’s

“Financial Statements 31 December 2015” (exhibit P207)
wherein the “Income statement” shows that the Plaintiff –
(a) had a revenue of RM17,257,059.00 in 2014 and

RM30,012,266.00 in 2015 bringing to a total sum of
RM47,269,325.00;
(b) received gross profits of RM5,319,637.00 and

RM12,344,894.00 for 2014 and 2015, respectively; and
86
(c) spent RM1,752,519.00 and RM2,264,735.00 for other

operating expenses and RM1,670,512.00 and
RM3,356,360.00 on staff costs in 2014 and 2015,
respectively.
The Plaintiff submitted that it had invested significant amount

of resources, time, energy and effort to promote PDT in
Malaysia where the costs incurred in securing appointments with
local companies and international companies are
RM11,937,000.00 in 2014 and RM17,000,667.00 in 2015 whilst
other operating expenses for presentations and participation in
exhibitions are RM1,752,519.00 in 2014 and RM2,264,735.00 in
2015. However, the value of the 7 POs which were issued by the
Plaintiff to the Defendant for the period spanning from
25.1.2014 to 13.9.2015 (exhibit D179) is merely USD858,530.40
(equivalent to approximately RM3.5 million). Nonetheless, as an
agent, the Plaintiff has somehow been able to amass a total
revenue of RM47,269,325 in 2 years! Furthermore, if the
Plaintiff had dutifully marketed and promoted PDT, why did the
Plaintiff need to provide substantial sum for staffing and even
doubled the numbers in 2015?
[100] Then there’s the Plaintiff’s claim of having developed HATs in

March 2014 and introducing the same to the oil and gas industry
at the end of 2014. If all the costs expended by the Plaintiff
were for PDT alone, this means that it spent nothing at all to
purchase acoustic equipment and to develop, promote and
market HATs but amazingly HATs was immediately embraced
and commended by its customers. The only reasonable inference
that can be made from the Plaintiff’s own Income Statement is
that it was paying substantial amount of monies to employ the
Defendant’s former employees to do diagnostic work and
simultaneously leeching on PDT in order to promote HATs.
87
[101] The next material on HATs which resemble the technical

information on PDT from the Defendant’s website (exhibit D258
with “©Diatech, 2013”) is the buntings and banners, with the
Plaintiff’s and Bisco’s logos, placed at an exhibition in Saudi
Arabia. Hazim could not deny being present at this event as a
photograph of him was tendered together with the other shots as
exhibit D196. When asked in cross- examination as to whether
the Plaintiff had provided the information that ended up on the
buntings and banners, Hazim was evasive but admitted that
information on PDT can be seen. He said:
“… They have both presentations for HATs and PDT,

we’ve provided some of the information to them. … And
then they have prepared their own buntings and
catalogues. When I went there, I noticed that since this is
a … exhibition for HATs, I noticed that the buntings and
banners contained information with regard to PDT
materials. So I’ve immediately instructed them actually to
remove these buntings and brochures from the exhibition
and I believe they have. …”.
[102] In my view, Hazim’s answers were feeble attempts to

disassociate the Plaintiff from what he himself has admitted as
being information on PDT which has found its way on the
exhibition material on HATs. This is a clear act of misleading
visitors to the exhibition into thinking that HATs is capable of
delivering everything that PDT has been offering in the past.
[103] The leeching continues with the “Technical Proposal –

Provision For reliability Study Utilizing Hybrid Acoustic
Technology Inspection Services For Firewater Line ” prepared by
the Plaintiff for MTBE (exhibit D194). Under “Introduction”,
the Plaintiff claimed that HATs is an integration of acoustic
88
emission technique with phonon analysis and assessment for

defect detection. Pictures of PDT equipment and software
bearing the Defendant’s logo are included in the Technical
Proposal.
[104] Finally, there is the newspaper article titled “VSSI focuses on

developing niche environmental-friendly processes”
[ID.D234(a) and (b)] wherein Vanguard, the Plaintiff’s local
agent in Oman, stated that “VSSI takes pride in deploying state
of the art technologies and to this end has recently introduced
HAT inspection system based on Phonon Technology in Oman. ”.
As the Plaintiff claimed to be the inventor of HATs, the
Defendant submitted that such information must have been
obtained by Vanguard from the Plaintiff.
[105] The Court has considered and accepts the Defendant ’s

submission that the newspaper article is admissible on the
following grounds:
(a) sub-s. 60(3) of the EA 1950 provides that “If oral evidence
refers to the existence or condition of any material thing
including a document, the court may, if it thinks fit,
require the production of that material thing or the
document for its inspection.”. When asked when he first
saw the word “HATs”, Zelim said that, “ I wouldn’t
remember the exact document that I saw first but for
instance, I saw it mentioned in the article from Oman local
newspaper called Muscat Daily….”. A copy of the article
has been produced for the inspection of the Court and to
corroborate Zelim’s evidence as to its existence;
(b) in Ho Chien v. PP [1936] 1 JLR 114, it was held that “… if

it is not reasonably practicable to produce the material
thing itself, they should produce a position of it, or a
89
sample of it or a photograph, or a sketch or some other

evidence which may supply the court with the best
evidence reasonable obtained under the circumstances. ”.
ID.D234(a) and (b) is the best evidence reasonably
obtained under the circumstances because litigation was
not contemplated at the time when Zelim first came across
the article and the original copy was not reasonably
accessible when litigation was initiated as it is only
obtainable in Oman; and
(c) although Datuk Fariz could not remember exactly when the
photograph that was published with the article was taken,
he confirmed that he is one of the persons in the
photograph together with Alex and Marina and that it was
a dinner event in Oman.
[106] Based on the evidence before the Court, there is no doubt

whatsoever that the Plaintiff had indeed leeched on, or used, the
goodwill and reputation of the Defendant’s PDT to promote
HATs. The Defendant is known for using Phonon technology for
diagnostic services and by leading the customers into believing
that HATs is related to PDT, the Plaintiff wanted to continue to
perform diagnostic services for them even after the termination
of the Agency Agreement.
Statement 8: Endangering industrial and environmenta l safety
[107] The Defendant contended that from the evidence given by

Hazim, Praba and Zelim, it was not disputed that any improper
inspection and analysis of defects of the facilities within the
premises of the oil and gas companies will result in safety risks.
90
By using non-certified phonon specialists and non-phonon

equipment to perform diagnostic services for the works, the
Plaintiff’s actions would likely cause inaccurate results. This in
turn may endanger industrial and environmental safety and lead
to financial and reputational damage to customers.
[108] Ms Manjit submitted that the Defendan t failed to justify the

defamatory allegation in Statement 8 for the following reasons:
(a) HATs does not expose the industry/ environment to any

risk or danger. It was developed to prevent accidents and
technogenic catastrophes. There has never been any
accidents or complaints in the history of the Plaintiff ’s
services as opposed to the Defendant’s.
(b) The Plaintiff practices high standard of health and safety

requirements by its customers. To the contrary, the
Defendant’s Expert Diagnosticians have been charged and
found guilty of contravention of a major offence in the
PGB facility.
(c) The Defendant and witnesses from PCSB, PGB and Repsol
never testified and/ or adduced any documentary evidence
on any actual or potential purported industrial and/ or
environmental danger caused by the Plaintiff, its
employees and/ or HATs.
(d) No evidence was produced by the Defendant of any

purported financial and/ or reputational damage and
endangerment of national security of a number of States
caused by the Plaintiff, its employees and/ or HATs.
91
[109] I will first address the Plaintiff’s submission on the “major

offence” committed by the Defendant’s Expert Diagnosticians,
Artem Kuleshov and Alexander Volchkov in March 2015 at the
compound of Gas Processing Santong (‘GPS’), PGB. I have
examined the report lodged by one Kpl. Samsu Bahari Bin
Mohamad, Security Supervisor IV, and the e -mails and letter
between the representatives of the Plaintiff and PGB (exhibit
P88) and it is obvious that the offence is for driving in an unsafe
manner at the parking lot area of GPS, PGB whereby the vehicle
came out of the junction at high speed and without stopping.
Whilst the offence is serious, it does not involve the
performance of inspection works and analysis of the defects of
the facilities at GPS, PGB. The one-off offence which took place
cannot be elevated to be within the genus of acts which pose a
threat of the nature as envisaged in Statement 8 in the said
Letters.
[110] The learned Defendants’ counsel submitted that the objective of

diagnostics is to determine the technical conditions, the
presence of leaks and defects and the residual life estimation of
technical objects of a facility. With the results obtained, repair
works that are necessary to prevent accidents, technical disasters
and environmental damage will be recommended. However, if
the results of the diagnostics are inaccurate, the recommendation
would also not be correct and thus, there could potentially be
accidents and technical disasters. In my view, this is perfectly
logical in the high-risk areas where the facilities of oil and gas
companies are located. There is no necessity for the Defendant
to elicit or adduce evidence to the extent as argued by the
Plaintiff as the possibility of jeopardising the industrial and
environmental safety of the customers’ assets as indicated by the
92
words “may be” is sufficient to justify the making of Statement

8 in the said Letters.
[111] Moreover, since this Court has held that the Plaintiff had used
the name of PDT to mislead customers and simulated
inspections by secretly employing the Defendant ’s former
employees and passing them off as HATs, the Plaintiff ’s
assertions on the so-called development objectives, advantages
and/ or track record of HATs must be rejected as being
absolutely baseless and a blatant lie.
Statement 9: Forgery, theft and appropriation of money
[112] It is the Defendant’s position that there has been a fair amount
of forgery committed by the Plaintiff in this case involving the
following documents:
(a) Reference letter dated 27.1.2015 (‘Reference Letter’) for

the Defendant’s employees namely, Mikhail Primachenko,
Artem Kuleshov, Hya Khokhlov, Alexander Volchkov,
Alex, Marina and Skryabin Vladimir (‘Skryabin’)
allegedly signed by Lidiia (DW3) and issued by the
Defendant (exhibit D224);
(b) Certificates of Competence dated 25.11.2013 for the

Plaintiff’s employees namely, Nizammudin bin
Mohammad, Ainul Adri Bin Basmi and Budi Hazrin Bin
Ismail allegedly signed by Prof. Vladimir and issued by
Diatech (exhibit P135);
(c) Invoices for PDT for PCSB-SKO ie, PL 106 (from MCOT
to SBM-5) 30”, 1.2 km of Aboveground Pipeline dated
93
1.5.2013 (exhibit P213); PL-221 (from WLDP-A to WL-

123) 6”, 0.5 km dated 1.5.2013 and PL-218 (extension
from WL-123 to WLDP- B) 6”, 1.1 km of Pipeline (exhibit
P214); and 1 unit of Double Wall Tank at Export Terminal
Plant Operations Division, PGB dated 18.12.2013 (exhibit
P215) (hereinafter collectively referred to as the ‘3
Invoices’) purportedly signed by Prof. Vladimir;
(d) “Contract For Services - Phonon Specialist” for the

Defendant’s employees namely, Alexander Volchkov,
Minigalina Razilya, Primachenko Mikhail, Primachenko
Nikolai and Ilia (DW2) which were allegedly signed by
them for purposes of visa application (marked as ID202 to
ID206); and
(e) HATs Reports for PCSB (Sarawak Operations/ Oil) as the

client with the cover pages signed by Ruzlan:
• Defect Verification For 10 Nos. Pipings At PC4DP -A

Platform Offshore Bintulu dated 3.5.2016 (exhibit
P12);
• Defect List For 36 Nos. Piping At PC4DP-A Platform

Offshore Bintulu dated 27.4.2016 (exhibit P14);
• Defect List For 10 Nos. Piping PC4DP-A Platform At

Bintulu Offshore dated 14.3.2016 (exhibit P16);
• Defect Verification Report For Integrity Study Using

Hybrid Acoustic Technology System (HATs) For
Bottom Tank T- 82 At MCOT, Miri dated 8.12.2016
(exhibit P18);
94
• Final Report On Integrity Study Using Hybrid

T-82 At MCOT, Miri dated 24.6.2016 (exhibit P20);
• Final Report On Integrity Study Using Hybrid

T-4210 At MCOT, Miri dated 24.6.2016 (exhibit
P22);
• Final Report For Buried Piping (Package C) At

Bintulu Crude Oil Terminal dated 25.2.2016 (exhibit
P24);
• Defects List Report For Slug Catcher (Pressure

Vessel) V2600 dated 12.1.2016 (exhibit P26);
• Defects List Report For Slug Catcher (Pressure

Vessel) V1600 dated 12.1.2016 (exhibit P28); and
• Final Report For Buried Piping (Package C) At

Bintulu Crude Oil Terminal dated 25.2.2016 (exhibit
P30).
[113] With regards to the part of Statement 9 where the Defendant

claimed that there has been theft and appropriation of money,
the Defendant relied on the fact that only 7 POs were issued by
the Plaintiff to the Defendant during the period when the
Agency Agreement was in force and not a single PO was issued
in respect of the 17 POs that were issued by PGB to the Plaintiff
pursuant to the LoA and Contract between PGB and the Plaintiff
as alluded to earlier. Ms. Cindy submitted that the kind of
services offered are very lucrative in the industry and this
provides the impetus for the Plaintiff to keep the projects from
95
the Defendant’s knowledge so that the Plaintiff can keep more

profits for itself.
[114] In response, the Plaintiff asserted that the allegations of forgery

and fabrication are raised to the Defendant’s convenience in that
any situation or document for which the Defendant has no
response is conveniently classified as forged or fabricated.
Moreover, the Defendant did not lodge any police report and nor
did it offer any explanation for the failure to do so. Hence, with
reference to the cases of David Wong Hon Leong v. Noorazman
Bin Adnan [1995] 4 CLJ 155 and KTL Sdn Bhd v. Leong Oow
Lai [2014] MLJU 1405, the allegations are said to be an
afterthought and completely unsubstantiated.
[115] It was additionally submitted that although the allegation of

forgery of signature is specific to the forgery of signature of the
CEO which is Zelim, the Defendant did not adduce any
documents to support this accusation but instead attempted to
substantiate forgery by other documents as mentioned in
subparas 112(a) to (d) above.
[116] Furthermore, no expert evidence or opinion was tendered by

Diatech on the allegation of forgery and fabrication and so, on
the authority of Letchumanan Chettiar Alagappan @ L
Allagappan (sebagai pelaksana wasiat/executor kepada SL
Alameloo Achi alias Sona Lena Alamelo Acho, si mati) & Anor
v. Secure Plantation Sdn Bhd [2017] MLJU 379, the Court
should not take upon itself the responsibility of comparing the
disputed signatures.
96
[117] Firstly, the Court accepts Zelim’s explanation for the non-
lodgment of a police report or criminal complaint against the
Plaintiff to date. In view of the multi -faceted issues in the
dispute between the parties, it is reasonable for the Defendant to
wait for the outcome of the Plaintiff’s suit and the Defendant’s
counterclaim before deciding on the next course of action.
[118] Secondly, the Court agrees with the Plaintiff that the Court
should not take on the task of comparing the disputed
signatures. However, the absence of evidence by a handwriting
expert and the non-production of an expert report are not
absolutely fatal to the Defendant’s attempt in justifying
Statement 9. In respect of the Reference Letter, Lidiia was firm
in her testimony in court that exhibit D224 is a false document
and she did not sign the said letter and nor did her superiors
asked her to sign the same. The reasons given were that (i) her
name was spelt wrongly in the Reference Letter whereby the
correct spelling should be ‘Lidiia’ instead of ‘Lidia’; (ii) she
could not have signed the Reference Letter because it was in
English and she does not know English; and (iii) as at the date
of the Reference Letter, Alex, Marina and Skryabin have left the
Defendant and the Defendant would not have prepared the
references knowing that the references contained names of three
of its ex-employees whilst she herself would not sign a
Reference Letter with their names on it as it would be a lie. The
“Order (Directive) for termination (cancellation) of the
employment contract” for Alex was on 18.6.2013 (exhibit
D170), for Marina was on 14.8.2014 (exhibit D171) and for
Skryabin was on 24.3.2008 (exhibit D172), all well before the
date of the Reference Letter.
[119] In its Written Submission, the Plaintiff contended that

“Although DW-3 denied issuing the said reference, but when
97
asked her to compare the signature of Professor on the

reference at Bundle B50 page 7584 (D224) to her signature on
Minigalina R. Ya. leave application form at Bundle B62 page
8663 (D233), she agreed that it looks alike.” (emphasis added).
This submission is errorenous because Lidiia’s cross-
examination on this matter was premised on the Plaintiff ’s
position that the signature on exhibits D224 and D233 looks
alike and therefore Lidiia must have signed the Reference
Letter. In any event, the Plaintiff’s contention is baseless when
considered in the light of Lidiia’s unwavering evidence in court
that the signature on the Reference Letter is not hers.
[120] Moving next to the Certificates of Competence, Zelim in his

testimony had given several reasons as to why the Defendant
states that the Certificates have been forged and these are that –
(a) the format of the Certificates does not tally with the
certificates which are usually issued by the Defendant;
(b) the surname of Prof. Vladimir, who was alleg ed to have

signed the Certificates, was spelled wrongly in the
Certificates where the correct spelling is “Shukhostanov”
with the alphabet “h” in “Suk”;
(c) the Malaysians named in the Certificates were not

employees of the Defendant, have never been train ed in
PDT in Russia and never been involved in any PDT
inspections by the Defendant; and
(d) at the bottom left of the Certificates, the word “Diatech” is

stated whereas the company name is usually written as
“SPC Diatech”.
98
[121] The Plaintiff contended that the Certificates were issued by

Prof. Vladimir during the Phase 1 period to which Zelim has no
knowledge about. Since the Defendant failed to call Prof.
Vladimir as a witness, the Plaintiff urged the Court to draw an
adverse inference against the Defendant. However, Ms. Manjit is
well aware that Ms. Cindy had, on several occasions throughout
the trial, informed the Court that there was no certainty that
Prof. Vladimir could travel to Malaysia for the trial due to his
health condition and the possibility of his evidence being given
via video conferencing was even discussed with the counsels.
[122] On 22.1.2020, the Defendant tendered the Medical Record dated

24.12.2019 for Prof. Vladimir issued by The Federal State -
Funded Budgetary Institution “Clinical Hospital” (exhibit D270)
which confirms that the 77-year-old Prof. is facing serious
health issues, among others, chronic cerebral ischemia; stage 3
cerebrovascular disease; systemic axatia; pseudobulbar
syndrome; vascular parkinsonism syndrome with oligokinesia
and hypertonic-hypokinetic syndrome; and hypertension stage 3
of high risk. Based on the Medical Record, Prof. Vladimir is
medically unfit to attend court in person or to give his evidence
by remote communications technology. Ms. Cindy sub mitted the
case authorities of Lau Song Seng & Ors v. Public Prosecutor
[1998] 1 SLR 663 for the proposition that an adverse inference
is not mandatory but discretionary, having regard to the
relevancy and materiality of a particular witness, and Welds (by
his mother and litigation friend) v. Yorkshire Ambulance Service
NHS Trust and another 155 BMLR 101 and Re Coroin Ltd (No
2); McKillen v. Misland (Cyprus) Investments Ltd and others
[2013] 2 BCLC 583 that an adverse inference should not be
drawn when there is a reasonable and credible explanation for a
witness’s non-attendance at the trial.
99
[123] I agree that no adverse inference should be drawn against the

Defendant, nevertheless, as a matter of evidence, considering
the fact that the Certificates of Comp etence were purportedly
signed by Prof. Vladimir and issued by the Defendant on
25.11.2013, which coincides with the period when Prof.
Vladimir was the Director and shareholder of the Plaintiff and
that, even if the Court accepts Zelim’s evidence that the
reference to “CEO” in the said Letters means senior executives
or senior management of the Defendant and includes Prof.
Vladimir as the Vice President, the Court is not inclined to
conclude that the Defendant has proven, on a balance of
probabilities, that the Certificates were forged by the Plaintiff
without hearing Prof. Vladimir’s narrative of the events
surrounding the issuance of exhibit P135.
[124] The Court holds the same view in respect of the 3 Invoices
which were similarly issued during the Phase 1 period. The
Plaintiff’s version is that Prof. Vladimir requested for payments
to be made in cash and that Lidiia had testified that Prof.
Vladimir’s designation is Vice President for Science and
Technology and “STC Diatech” is the abbreviation for
“Scientific Training Centre” (not “Scientific Testing Centre” as
in the Plaintiff’s Written Submission) where Prof. Vladimir is
also the Vice President. Since no evidence can be procured from
Prof. Vladimir as to the issuance of th e 3 Invoices, I am not
prepared to hold that these are forged documents of the
Defendant. It has not escaped the Court’s attention that the
Defendant’s submission is that “… the 3 Invoices were
fabricated by the Plaintiff for purpose of the court proceedin gs.”
[refer para 165.6, p 109 of the Defendant’s Written Submission
(Vol. 1: Opposing Plaintiff’s Main Claim)]. However, the
defence of justification must relate to Statement 9 ie, that at the
100
time when Zelim wrote the said Letters on 15.12.2016, the

Defendant held the belief that “… in the implementation …” of
the activities as stated in the said Letters, the Plaintiff had
committed forgery etc. The court proceedings commenced only
on 9.3.2017.
[125] The same reasoning applies to the HATs Reports since the
Defendant’s contention was that the cover pages to the Reports
in exhibits P12, P14, P16, P18, P20, P22, P24, P26, P28 and
P30 were signed by Ruzlan, backdated, and produced just one
month before the trial started.
[126] Turning now to the “Contract For Services – Phonon

Specialist”, these were marked for identification only ie, ID202
to ID206 following the objection raised by Ms. Cindy. The
Court would similarly not embark on an exercise of comparing
the disputed signatures except where the person who had
purportedly signed the document concerned is present in court
as a witness. In this case, Ilia testi fied that he did not sign the
“Contract For Services” ID206 and that the signature on that
document is not his signature. Just like Lidiia, Ilia was also
unshaken during cross-examination and maintained his
testimony. It is observed that at the end of ID206, Ilia’s name is
spelt as “Khoklov” instead of “Khokhlov”. Although Ms. Manjit
applied for ID206 to be converted into the Plaintiff’s exhibit,
Ms. Cindy objection on the ground that Ilia’s evidence confirms
that the document is not authentic was allowed. Hence, at least
one “Contract For Services”, which was signed by Hazim, was
indeed forged by the Plaintiff. The fact that stamp duty was
purportedly paid for ID206 does not change its status as a
forged document.
101
[127] Lastly, as to the section of Statemen t 9 which mentions

“appropriation of money”, the Court is inclined to agree with
the Defendant that it has adduced sufficient evidence to support
a finding that the Plaintiff has misappropriated monies from
projects which the Plaintiff was contractually obligated to issue
POs to the Defendant.
[128] Clause 3 of the Agency Agreement governs the “Sale And

Purchase Of The Products” in the following terms (with my
added emphasis):
“3.1 Principal shall quote prices of Products to Agent

from time to time and subject to change of freight
and production costs on the date of the relevant
purchase order.
3.2 Agent shall issue a purchase order for Products to

Principal from time to time (“P.O”). The volume,
price, type and specification of Products, date of
delivery and other details (if any) for Products shall
be detailed in the P.O. Agent shall send P.O. to
Principal by facsimile and send original P.O by
courier service within three (3) days after the date
of P.O.
3.2 Each P.O shall be subject to acceptance or rejection

of Principal. The P.O shall be binding upon
Principal after Principal accepts such P.O by
sending performa invoice for such P.O to Agent
within seven (7) days after receipt of relevant P.O
(“Performa Invoice”).
3.3 The P.O accepted by Principal and Performa Invoice

shall become a part of this Agreement. In case of any
102
inconsistency between the terms of this Agreement,

accepted P.O and Performa Invoice, Performa
Invoice shall prevail to the extent of the
inconsistency.
3.4 Products shall be delivered to Agent in accordance

with terms and conditions specified in Performa
Invoice.
3.5 The prices of Products to be sold in Malaysia shall

be subject to mutual agreement of the parties in
order to promote the sale and distribution of the
Products in Malaysia.
3.6 Agent shall make payment to Principal for each

Performa Invoice by means of Letter of Credit (LC)
100% upon Issuance Performa Invoice and before
final shipment.
3.7 All expenses incurred in respect to LC, including

bank charges shall be borne and paid by Agent.”.
[129] Zulfaiz had produced a list containing information of 17 POs

issued by PGB to the Plaintiff for the inspection services
(exhibit D240) pursuant to the LoA and Contract between PGB
and the Plaintiff with a total value of RM23,189,403.02 and the
amount claimed is RM20,635,706.90. During cross -examination,
Datuk Fariz agreed that the Plaintiff did not give any PO under
the contract for PGB to the Defendant. As for PCSB, Hazim also
admitted that out of 7 POs before the Court where PCSB had
given to the Plaintiff, the Plaintiff only gave 1 PO to the
Defendant. As alluded to earlier, the Plaintiff ’s “Financial
Statements 31 December 2015” (exhibit P207) shows that the
Plaintiff had a revenue of RM17,257,059.00 in 2014 and
103
RM30,012,266.00 in 2015. When confronted with these figures,

Datuk Fariz admitted that the Plaintiff as the agent was earning
much more than the Defendant as the principal for PDT proj ects
in Malaysia.
[130] The Defendant need not prove the truth of every word in
Statement 9 and it suffices for the Defendant to prove, on a
balance of probabilities, that Statement 9 is substantially true in
material particular. In my opinion, the Defendant has discharged
this burden in respect of the forgery of the Defendant ’s
document being the Reference Letter and Ilia ’s Contract For
Services and the appropriation of money.
Non-calling and credibility of witnesses
[131] Before proceeding to discuss Issue 3, this would be an

opportune time to briefly address the comprehensive
submissions by each party on the non -calling of certain witness
by the other party and the credibility of the witnesses who did
testify in court.
(a) Non-calling of Khosim
In their evidence, Hazim and Datuk Fariz attempted to

convince the Court that a certain arrangement or state of
affairs existed during the period when Prof. Vladimir and
Khosim had business dealings. Since Khosim was not
included in the Plaintiff’s List of Witnesses, the Defendant
had issued a subpoena but could not serve it on Khosim. In
view of the Court’s assessment on the credibility of Hazim
and Datuk Fariz as addressed below, it is incumbent on the
Plaintiff to have secured Khosim’s attendance as a witness
at the trial. The presumption of adverse inference under s .
104
114 illustration (g) of the EA 1950 for the failure to call

Khosim to testify in court is invoked against the Plaintiff.
(b) Non-calling of Nik Faiz, Khaled Bin Hamdan and Zaidi

Md. Dom from PGB and Hafis Harif from Repsol
Nik Faiz is the company representative in the PGB

contract; Khaled is the person who is said to have
requested the incorporation of the term “phonon” in the
HATs report; and Zaidi is PGB’s staff engineer. Hafis was
mentioned in para 68 above.
The names of Nik Faiz, Khaled and Hafis were brought up

by the Plaintiff during cross-examination in the context of
the issue on Blanket Contract. The Court agrees with the
Defendant that, in order to prove that the Plaintiff ’s
contentions are right, Nik Faiz, Khaled and Hafis are the
persons who are material to the Plaintiff ’s case and not the
Defendant’s. If any adverse inference is to be drawn, it
would thus be against the Plaintiff.
As for Zaidi, the Court was informed in the course of the

trial that he would be present to give his evidence,
however this did not turn out to be the case. Ms. Manjit
said that Zaidi was involved in a turnaround exercise and
could not leave the facility. Learned counsel did not
attempt to persuade the Court on the importance of
securing the attendance of Zaidi for the trial and to seek a
postponement until he was able to come to court. The
choice to close the Plaintiff’s case without Zaidi’s
testimony was entirely the Plaintiff’s and/ or its counsel’s.
Zaidi’s evidence would have shed light as to why the
reports were stated as HATs instead of PDT. In addition,
the Defendant’s lead counsel had skillfully extracted
105
evidence from Ruzlan that the cover pages to the alleged

HATs reports for PCSB were backdated and produced just
one month before the trial started. In this regard, Zaidi
who had signed the purported HATs reports for PGB,
could have confirmed whether those reports were actually
signed by him at the material time or otherwise. Since the
Plaintiff did not call Zaidi to testify, an adverse inference
is drawn against the Plaintiff.
(c) Non-calling of Rizwan the lawyer and the private

investigator
From Zelim’s account of the facts, it can be gathered that

Rizwan’s and the private investigator’s roles were
basically to carry out investigations and gather evidence.
The Plaintiff’s complaint against the Defendant for not
calling them as witnesses was merely about the source of
the Defendant’s documentary evidence. However, by the
end of the trial, most of the documents were marked as
exhibits. Therefore, the authenticity of the Defendant ’s
evidence is not an issue. Furthermore, any instructions
received, and course of action taken, by Rizwan in his
capacity as the Defendant’s solicitors would be subject to
legal professional privilege. The Court holds that no
adverse inference is drawn against the Defendant.
(d) Non-calling of Alex, Marina and Skryabin
It is apparent that the Court would be very much

enlightened as to the events surrounding, among others,
the Plaintiff’s engagement of these phonon specialists at
the material times; the issuance of the Employment
Certificates, Curriculum Vitae and reference letters; the
work that was performed for the Plaintiff’s customers
106
without the Defendant’s knowledge; and the equipment

that was collected from Moscow if these three Russian
nationals had testified at the trial. The Plaintiff did not
offer any explanation as to why they were not called as
witnesses. Ms. Cindy cited the cases of Khaw Cheng Bok
& Ors v. Khaw Cheng Poon & Ors [1998] 3 MLJ 457;
Jaafar bin Shaari & Anor (suing as administrator of the
estate of Shoﬁah bte Ahmad, deceased) v. Tan Lip Eng &
Anor [1997] 3 MLJ 693; and AB Latef & Associates (M)
Sdn Bhd v. Govindasamy a/l Suppiah [2016] 5 MLJ 508 to
support the proposition that these individuals are crucial to
the Plaintiff’s narrative of the facts and by closing its case
without having their evidence recorded, an adverse
inference ought to be made against the Plaintiff who was
in a position to adduce better evidence but deliberately
abstained from doing so. The Court finds that there is
merit in the Defendant’s submission and accordingly
invokes the presumption of adverse inference for the
failure to call these three individuals to testify in court.
(e) Credibility of Ruzlan
Reference has been made earlier to the HATs Reports for

PCSB (Sarawak Operations/ Oil) with the cover pages
signed by Ruzlan (exhibits P12, P14, P16, P18, P20, P22,
P24, P26, P28 and P30). The Defendant takes the position
that there is ample evidence to support a finding that
Ruzlan could not have signed these Reports and had given
contradictory testimony for the following reasons:
(i) In some of the Reports, the name of the authorised

person stated is Pankyes Micheal Hirse but yet
Ruzlan claimed that he signed the reports.
107
(ii) Ruzlan had explained that before 2016, the whole

operations in Sarawak was under one company called
Sarawak Operations and thereafter, the said company
was split into Sarawak Oil or Miri Crude Oil
Terminal (‘MCOT’) and Sarawak Gas or Bintulu
Crude Oil Terminal (‘BCOT’). At the material time,
Ruzlan was overseeing BCOT only and he admitted
that he could not be the authorised person to sign the
reports for MCOT. However, the Reports in exhibits
P18 and P22 which were signed by Ruzlan on
15.12.2016 and 5.7.2016, respectively are for MCOT.
When confronted with this fact during cross -
examination, Ruzlan then testified that, “It could be.
The job originated from me when I was there
[Sarawak Operations] and then it is in progress and
then I moved to Bintulu and then after I moved, it
could be like that. But I’m not sure lah because
sometimes if they come bundles to me, I just sign .”
(see NoE, Vol. 2 on 15.11.2018 at p 24).
(iii) Ruzlan admitted that he could not have signed the

Reports exhibits P16, P24, P26 dan P30 in January
and March 2016 and the PL 106 Report (exhibit P4)
in September 2013 since BCOT was established only
in April 2016.
(iv) In the e-mail from the Plaintiff to Ruzlan dated

16.12.2016 (exhibit D63), it was shown that the
Plaintiff’s staff forwarded the Report (exhibit P18)
to him on 16.12.2016 but Ruzlan signed the Report
on 15.12.2016. Ruzlan agreed that it is illogical for
him to have approved and signed the report one day
earlier than the e-mail. When the Defendant’s
108
counsel suggested that the Reports which use the

term “HATs” and signed by him are forged
documents, Ruzlan answered “I don’t know.” (see
NoE, Vol. 2 on 15.11.2018 at p 28).
(v) Ruzlan attempted to cover the discrepancies in his

evidence by claiming that the Plaintiff would present
its findings in PowerPoint format and after Ruzlan
agrees, the Plaintiff will proceed to prepare th e draft
or final reports. However, no such presentation slides
were produced before the Court.
(vi) Ruzlan agreed that the services that were performed

by the Plaintiff in 2016 were actually PDT.
(vii) Ruzlan admitted that he signed the Reports at the

Plaintiff’s request and when it was suggested that he
did so and backdated the Reports for the purpose of
the court proceedings, he said, “I don’t know because
it has been signed as when it is, I was asked to. ”.
Having heard and seen Ruzlan in court and in view of the

matters as outlined above, it is my finding that his
credibility has been shattered and he is not a truthful
witness.
(f) Credibility of Hazim
The Defendant challenged Hazim’s credibility on the

grounds, inter alia, that he had given contradictory
evidence as to the first time that he met Zelim; the
working visas for Alex and Marina; the methodology of
PDT; alleged invention of HATs; the Double Wall Tank
work (exhibit D184); and the complaints from Brunei Shell
109
about the defects list in the PDT Report for Pipeline

PID0324 (exhibit D3).
Hazim was in the witness box for many days and to my

observation, he was evasive and had a tendency of giving
long- winded answers, which at times, were nonsensical
and reached the stage where the Court had to remind him
several times to answer the questions during cross -
examination as asked. It was common for Hazim to say, “I
don’t know”, “I can’t remember”, “I don’t recognize …”
but when confronted with the documents, he was forced to
admit the propositions that were put to him by the
Defendant’s counsel, sometimes looking rather sheepishly.
The Defendant pointedly mentioned in the Written Reply
Submission (Reply To Vol. 1: Preliminaries) at pp 13 - 14
about Hazim starting to stutter and mutter when
responding to questions by Ms. Cindy regarding the
purported complaints on PDT by customers.
Overall, Hazim did not leave a good impression and as

someone who has so much at stake in this suit, it is hardly
surprising that his answers in court were suited to secure a
verdict in favor of the Plaintiff. However, there were
moments when his demeanor showed flashes of someone
who bears the guilt of the past wrongdoings. His attempt to
interfere with Syafiq (DW4; see subpara 258(b)(viii)
below) puts a further stain on his credibility.
(g) Credibility of Datuk Fariz
The Defendant similarly highlighted several aspects of

Datuk Fariz’s testimony that displayed discrepancies and
his evasiveness (see the same Written Reply Submission at
pp 55 - 62). Unlike Hazim who would more readily admit
110
to the facts as suggested by the Defendant’s counsel when

shown the documents, Datuk Fariz would maintain a
confident composure even though some answers were just
illogical and an attempt to cover the truth. As a whole,
Datuk Fariz’s credibility is very much doubted.
(h) Credibility of Praba
It must be stressed at the outset that the Court has

exercised caution in dealing with the evidence given by
Praba since he was dismissed by Repsol following an audit
and internal inquiry which led to the issuance of three
charges against Praba in the show cause letter, one of
which pertains to the contract between Talisman/ Repsol
and the Plaintiff. During cross-examination, it was put to
Praba that he had intentionally concealed the fact that the
Agency Agreement had been terminated by the Defendant
from the management of Repsol and he had continued to
give work to the Plaintiff to perform purported PDT
services. Praba disagreed to this suggestion but he agreed
that the unlawful dismissal suit which he had filed against
Repsol was settled with payment by Repsol to him on the
basis of there being no admission as to liability.
Praba testified, among others, that he was surprised when

he read the Defendant’s letter dated 15.12.2016 with the
impugned statements because Repsol does not have any
contractual relationship with the Defendant and the
contents are strongly worded. Praba then checked with
Repsol’s engineers as to whether they were any phonon
related activity on their platforms and he also spoke to
Hazim. However, the internal inquiry that was conducted
into the Defendant’s complaints was carried out by the
111
supply chain group since they received the complaint from

Repsol’s headquarters in Spain. This part of Praba ’s
testimony is proven to be a lie since Hazim’s letter dated
15.3.2016 was addressed to Praba’s attention and conveyed
that the Plaintiff would no longer be representing the
Defendant and will not be offering PDT to Repsol (exhibit
P38A). This clearly shows that Praba is aware of the
Defendant’s existence. Furthermore, there is a
“Contractor’s Organisation Chart” in Appendix VII – 2.4
in the contract between Talisman and the Plaintiff (exhibit
P105) where the words “Phonon Specialist Diatech
Personnel” are written.
The Defendant has included other examples where Praba ’s

testimony contradicts with that of the other Plaintiff ’s
witnesses and the frequent change in his evidence (see the
Written Reply Submission at pp 48 - 50).
(i) Credibility of Zelim
The Plaintiff’s counsel had prepared a detailed analysis of

the alleged inconsistencies in the evidence given by all the
Defendant’s witnesses [refer Appendix 7(A) – (F) in the
Executive Summary (Volume 2)] and cited the decisions in
Eastern & Oriental Hotel (1951) Sdn Bhd v. Ellarious
George Fernandez & Anor [1989] 1 MLJ 35; Tenaga
Nasional Bhd v. Guan Heng Plastic Industries Sdn Bhd
[2013] 7 MLJ 888; Abu Bakar bin Pangis & Ors v. Tung
Cheong Sawmill Sdn Bhd & Ors [2014] 5 MLJ 384; Glove
Kendall Limited & Anor v. Maple Challenge Sdn Bhd &
Ors and other suits [2016] MLJU 1452; Simpson Wong v.
Vas Car Auto Parts Sdn Bhd & Ors and another case
[2017] MLJU 355; Mohd Shukri bin Mat (sebagai
112
pentadbir harta pusaka Wan Mek binti Wan

Abdullah@Wan Eshah bin Wan Abdullah) v. Wan Rahmah
binti Wan Abdullah (sebagai pentadbir harta pusaka Wan
Abdullah bin Wan Ahmad) [2017] MLJU 2026; and Public
Prosecutor v. Hassan Jafarpour [2019] 5 MLJ 350 in
urging the Court to reject their evidence.
In so far as Zelim’s testimony is concerned, Ms. Manjit

strongly argued that he is a self-serving witness and his
evidence should be treated with great caution, if n ot
disregarded altogether, since it was full of contradictions
with contemporaneous documents; his own evidence
throughout the trial; the evidence by Ilia and Lidiia;
averments in the affidavits filed in court; and the conduct
of the parties.
Contradictions in the evidence of a witness are not

uncommon. It is unrealistic to expect any witness, who is
after all mere mortal, to recall all events in the past with
absolute clarity and precision and be able to describe these
in an immaculate manner on each day that he or she is in
the witness box. The fact that there are discrepancies in a
witness’ testimony does not straight away make him an
unreliable witness and render the whole of his evidence
unacceptable (see Wan Yahya J (as he then was) in Pie Bin
Chin v. Public Prosecutor [1985] 1 MLJ 234 and quoted in
Dato’ Seri Anwar bin Ibrahim v. Public Prosecutor &
another appeal [2004] 3 MLJ 405).
In this case, the Court finds that despite the vigorous

cross- examination, overall, the credibility of the
Defendant’s witnesses remains intact and their account of
the facts is supported by the documents which were
113
marked as exhibits during the trial. Zelim was largely an

enthusiastic witness; he was visibly keen to tell his side of
the story and he strikes me as a sincere witness. Whatever
discrepancies in his evidence were sufficiently explained
or clarified during the re-examination.
Conclusion
[132] As the diagnostic work for Talisman/ Repsol was not performed
by the Defendant, it is irrefutable that the Pl aintiff had used the
Defendant’s name and the name of “PDT” to mislead Talisman/
Repsol into thinking that PDT services were provided, which is
the statement in the said Letters. By not using the Defendant ’s
phonon specialists to perform diagnostic work, i t is true that the
Plaintiff has simulated inspections of infrastructure facilities
using the PDT name although the Plaintiff does not possess the
relevant knowledge or PDT trained technical staff. Furthermore,
in an attempt to cover its tracks, the Plaint iff deviously changed
the name of the diagnostic method from PTD to HATs.
[133] With respect to the diagnostic work for PGB, there is ample
evidence which proves that the Plaintiff had entered into the
agreement with PGB secretly and performed the so-called PDT
services by hiring the former employees of the Defendant. The
Plaintiff conducted itself in a manner to mislead PGB into
believing that the inspection works were indeed performed by
the Defendant.
[134] For all the aforesaid reasons, the Court conclu des that the
Defendant has proven, on a balance of probabilities, that the
impugned statements are true or substantially true in material
particular.
114
Issue 3: If Question 1 is answered in the affirmative, whether the

Defendant could rely on the defence of fair comment?
- The Plaintiff’s objection to the Defendant’s pleadings
[135] The Plaintiff raised a similar objection in respect of the

Defendant’s defence of fair comment in that the Defendant has
failed to plead and particularise which are facts and which are
comments as required under O. 78, r. 3(2) RoC 2012.
[136] Section 9 of the Defamation Act 1957 provides that:
“In an action for libel or slander in respect of words

consisting partly of allegations of fact and partly of
expression of opinion, a defence of fair comment shall not
fail by reason only that the truth of every allegation of fact
is not proved if the expression of opinion is fair comment
having regard to such of the facts alleged or referred to in
the words complained of as are proved.”.
[137] In Dato’ Dr Tan Chee Khuan v. Chin Choong Seng @ Victor

Chin [2011] 8 MLJ 608 at p 623 the High Court held that:
“[27] … Whether pursuant to s. 9 of the Defamation Act

1957 or the common law, to constitute fair comment, a
distinction must first be drawn between an expression of
opinion which if given fairly or constructively, comes
within the ambit of fair comment and an assertion of facts
which the defendant must prove or establish sufficiently to
substantiate his comment basing on them to render it to be
fair comment. For that matter, O. 78 r. 3(2) of the Rules of
the High Court 1980 (RHC) requires the defendant to
plead clearly the expression of opinion as distinct from the
statement of facts that he relies on and they must be
115
particularised. …”.
[138] I have earlier alluded to the gist of para 39 in the Statement of

Defence and Counterclaim (refer para 53 above) wherein the
Defendant had pleaded that the statements and/ or words in the
said e-mail and said Letters are made, among others, on a matter
of public interest. This is borne out from para 37 of the same
pleading where the Defendant stated that the intention of the
said Letters is to warn Repsol and Occidental as the Plaintiff ’s
conduct in, inter alia, using non-certified phonon specialists has
caused or will cause a serious threat to industrial safety and v ery
likely lead to incorrect data on the status of hazardous facilities.
In para 38, the Defendant further pleaded that the said e -mail
and said Letters were sent with the intention of preventing the
Plaintiff from continuing to create a threat and risks o f
accidents, man-made disasters, industrial safety of industrial
facilities which were allegedly diagnosed by phonon diagnostics
as well as environmental threats to the regions where these
industrial facilities are located.
[139] Although the aspect of public interest has, to my mind, been

sufficiently pleaded, the Defendant did not indicate which words
in the impugned statements in the said Letters consist of
expressions of opinion. However, the Court accepts the
Defendant’s submissions that the Plaintiff’s failure to object
during the trial amounts to a waiver and that no prejudice is
caused to the Plaintiff as there is no element of surprise in the
light of the interlocutory injunction proceedings.
- Elements of the defence of fair comment
116
[140] The Defendant relied on the Privy Council decision in Joshua

Benjamin Jeyaretnam v. Goh Chok Tong [1989] 3 MLJ 1 in
submitting that there are four elements to the defence, namely –
(a) the words complained of are comment, though it may

consist of or include inference of facts;
(b) the comment is on a matter of public interest;
(c) the comment is based on facts; and
(d) the comment is one which a fair-minded person can

honestly make on the facts proved.
Each of these elements and the Plaintiff ’s contentions will now

be examined.
The words complained of are comment and/ or inference of facts
[141] It is settled law that a comment is a statement of opinion on

facts truly stated: see the Court of Appeal decision in BRE Sdn
Bhd & Ors v. Tun Datuk Patinggi Hj Abdul Rahman Ya’ Kub
[2005] 3 MLJ 485.
[142] In Joshua Benjamin Jeyaretnam v. Goh Chok Tong [1989] 3 MLJ

1, Lord Ackner, in delivering the judgment of the Privy Council,
referred to para 697 in Gatley on Libel and Slander (8 th Ed) in
the following passage at p 3 (emphasis is mine):
“…
Comment is a statement of opinion on facts. It is

comment to say that a certain act which a man has
done is disgraceful or dishonourable; it is an
allegation of fact to say he did the act so criticized
117
… while a comment is usually a statement of

opinion as to merits or demerits of conduct, an
inference of fact may also be a comment. There are,
in the cases, no clear definitions of what is
comment. If a statement appears to be one of
opinion or conclusion, it is capable of being
comment.
Of course, if a statement is capable of being comment,

whether or not it is a comment or a statement of fact, must
be a matter … for the judge, properly directing himself, to
decide.
In their Lordships’ judgment it was clearly open to the

judge to take the view that the observations following the
statement of facts were expressions of opinion or
conclusions or inferences drawn from those facts and
therefore capable of being comment. This being so, he
was fully entitled to decide that these observations were
‘a comment and not a bare or naked statement of facts. It
contained the defendant’s belief for his conclusions
based on or drawn from certain facts’.”.
[143] More recently, the Court of Appeal in Dato’ Seri Mohammad

Nizar bin Jamaluddin (supra, at p 258) held that:
“[50] The law on the defence of fair comment is that if a

defendant can prove that the defamatory statement is an
expression of opinion on a matter of public interest and
not a statement of fact, he or she can rely on the defence of
fair comment. The courts have said that whenever a matter
is such as to affect people at large, so that they may be
118
legitimately interested in, or concerned at, what is going

on or what may happen to them or to others, then it is a
matter of public interest on which everyone is entitled to
make fair comment.
[51] The comment must be based on true facts which are

either contained in the publication or are sufficiently
referred to. It is for the defendant to prove tha t the
underlying facts are true. If he or she is unable to do so,
then the defence will fail. As with justification, the
defendant does not to have to prove the truth of every fact
provided the comment was fair in relation to those facts
which are proved. However, fair in this context, does not
mean reasonable, but rather, it signifies the absence of
malice. The views expressed can be exaggerated, obstinate
or prejudiced, provided they are honestly held. If the
claimant can show that the publication was made
maliciously, the defence of fair comment will not succeed. ”
(emphasis added).
[144] Ms. Manjit argued that the defamatory statements in the said
Letters are factual allegations made in the form of statements
and not comments. The Defendant is also said to have failed to
justify the allegations made in the said Letters.
[145] However, the Court is persuaded by the Defendant’s submission

that the words “We believe …” at the start of the 8 th Statement
and 9 th Statement reflect the Defendant’s expressions of opinion
or belief for its conclusions drawn from the facts as set out in
the earlier part of the said Letter. Having read the entire said
Letters several times, the Court has no hesitation in concluding
that the Defendant was making comments or inferences that the
Plaintiff had committed forgery of the Defendant’s documents
119
and appropriation of money which may endanger industrial

safety and that this fact, as discussed in the earlier section of
this judgment, has been proven by the Defendant.
[146] The first element of the defence of fair comment has thus been
satisfied.
The comment is on a matter of public interest
[147] The Plaintiff contended that the defence of fair comment is

bound to fail because the said Letters were not sent in the public
interest but purely in the Defendant’s interest in order to secure
business for itself and to divert the Plaintiff ’s business and
income to the Defendant. This was admitted by Zelim.
Moreover, he had sent the said Letters only to Repsol and
Occidental, and not to PCSB and PGB where the bulk of the
Plaintiff’s services are rendered. Zelim’s excuse that he did not
do so because the Plaintiff has good connections with Petronas,
which must be in reference to the fact that Hazim was once
employed by Petronas, is testament that the Plaintiff is correct
in its stance.
[148] On the other hand, the Defendant asserted that the i ssue as to
whether a matter is of public interest does not depend on who
the Defendant chose to send the said Letters to, but rather on the
subject matter of the comment itself. To the Defendant, the gist
of the said Letters is intended to inform Repsol an d Occidental
about the use of the Defendant’s name and PDT by the Plaintiff,
its former exclusive agent, to mislead clients. PDT is used
mainly in the field of oil and gas where industrial safety is
paramount and will be threatened if diagnostic works are not
executed properly and not performed by certified specialists to
identify the defects.
120
[149] In my opinion, the evidence supports a finding that whilst the

Defendant had its own interests at heart when the said e -mail
and said Letters were sent, nevertheless, the Defendant was
concurrently equally concerned with the risks posed to the assets
of the oil and gas companies as a consequent of the Plaintiff ’s
acts. In quoting Zelim’s answer to Question 27 in his Witness
Statement as regards the issuance of the said Letters to Repsol
and Occidental, viz “… I wanted to put on record to them what
MRA had done and I do not want Diatech to be blamed if there
is anything that happened in their projects as a result of MRA’s
work. This issue is serious as it concerns industrial safety and
ecology.”, the Plaintiff’s counsel omitted to place emphasis on
the last sentence which represents the public interest element.
[150] Even the slightest threat to industrial and environmental safety

is of public interest. It is an agreed fact that PDT can only be
performed using PDT equipment and PDT software owned and
invented by the Defendant and by certified PDT specialist or
engineers trained on PDT by the Defendant. In the foregoing
analysis, this Court has set out the reasons for the conclusion
that the Defendant has, on a balance of probabilities, proven the
defence of justification in respect of the nine impugned
statements in the said Letters, including the 4 th Statement to 7 th
Statement. In the circumstances, there is no doubt in my mind
that the comment is on a matter of public interest.
The comment is based on facts
[151] To the Plaintiff, the Defendant has made baseless accusations in

the said Letters which remained unproven at the end of the trial.
For the Defendant, Ms. Cindy again cited the case of Joshua
121
Benjamin Jeyaretnam (supra), this time relying on the following

excerpt from p 3 of the report:
“(iii) Was the comment based upon facts which the

respondent established to be true?
It is of course well established that a writer may not

suggest or invent facts and then comment upon them, on
the assumption that they are true. If the facts upon which
the comment purports to be made do not exist, the defence
of fair comment must fail. The commentator must get his
basic facts right.
The basic facts are those which go the pith and substance
of the matter: see Cunningham-Howie v. Dimbleby [1951]
1 KB 360, 364. They are the facts on which the comments
are based or from which the inferences ar e drawn – as
distinct from the comments or inferences themselves. The
commentator need not set out in his original article all the
basic facts: see Kemsley v. Foot [1952] AC 345 but he
must get them right and be ready to prove them to be true;
(per Lord Denning MR in London Artists Ltd v. Littler.)”.
[152] Following from the findings of the Court in respect of the

defence of justification where the Defendant has proven the
central facts to be true, it naturally follows that the comments
made by the Defendant in the said Letters are based on facts.
The comment is one which a fair-minded person can honestly

make on the facts proved
122
[153] In Joshua Benjamin Jeyaretnam (supra, at p 4), the esteemed

panel referred to the test as adumbrated by Diplock J in Silkin v.
Beaverbrook Newspapers Ltd [1958] 1 WLR 743 in these words:
“… Could a fair-minded man, holding a strong view,

holding perhaps an obstinate view, holding perhaps a
prejudiced view – could a fair-minded man have been
capable of writing this?
...”.
[154] The Plaintiff obviously says, “No” on the ground that there is no
proof that the diagnostic works performed by the Plaintiff was
not performed correctly and/ or using n on-certified phonon
specialist and/ or non- phonon equipment. The Plaintiff’s
consistent position is that it has never provided PDT without the
Defendant’s involvement and it provided HATs. The Plaintiff
claimed that there is no evidence that HATs exposes a threat to
industrial safety.
[155] Likewise, with the verdict on the defence of justification, among

others that Hazim could not have invented HATs and that HATs
is a term that was coined by the Plaintiff to enable it to continue
to deceive the customers into believing that they were obtaining
a phonon based diagnostic technology, the Plaintiff ’s
contentions as outlined above ring hollow indeed.
[156] In contrast, there is no valid reason for the Court to reject

Zelim’s evidence, who in my observation is genuinely concerned
on the need to ensure and maintain industrial safety at all times,
that –
(a) PDT is a diagnostic method used on pipelines, tanks,

pressure vessels, furnaces, boilers and other industrial
123
objects to determine technical conditions such as the

presence of leaks and defects, and the remaining lifespan
of a technical objects so that any necessary repair work
can be recommended to prevent technical disasters;
(b) a proper diagnostic method would provide reliable

information and data to determine further operation
conditions of a facility and thereby guaranteeing industrial
safety; and
(c) he wrote the said Letters to Repsol and Occidental since

the Plaintiff was carrying out PDT without the Defendant ’s
involvement or knowledge whereby using the services of
non- qualified and non-certified specialists or secretly
employing the Defendant’s former employees who were no
longer certified as CS/E, using inappropriate and non -
certified equipment and providing false and inaccurate
reporting would jeopardise industrial safety at these
companies.
[157] Based on the facts as proven by the Defendant on a balance of

probabilities, a fair-minded person would be capable of writing
the said Letters in the manner as it was written by Zelim.
Malicious intent
[158] The Plaintiff vehemently argued that the said Letters were sent
maliciously with a clear motive to injure its trading reputation
and to pave the way for the Defendant to take over the
Plaintiff’s business. The indicia of malice are said to be as
follows:
124
(a) Datuk Fariz merely requested for a document that the

Plaintiff is no longer the Defendant ’s agent but instead the
Defendant issued the said Letters;
(b) the said Letters were not sent in public interest but for the
Defendant’s own commercial interests as admitted by
Zelim;
(c) Zelim purposely abstained from enquiring into the facts

and from availing himself of the means to verify the
information from the Plaintiff itself;
(d) the absence of any police report or crime report prepared

for investigation by the authorities as alleged in the said
Letters; and
(e) the Defendant did not take any legal action against the
Plaintiff and merely filed a counterclaim in this suit.
[159] Grounds (b) and (d) above have been dealt with earlier. As for
ground (a), Datuk Fariz had testified that Winner Inspection
brought the Defendant for the presentation on PDT and after the
presentation, she told the Defendant that Repsol already had a
contract with the Plaintiff for Phonon. When the Defendant
informed her that the Plaintiff was no longer the Defendant ’s
agent, she checked the report and found “HATs” being
mentioned. She then requested that the Defendant “… send me
the black and white to show that MRA is no longer their agent
so that I can bring this case to the Supply Chain Management
and Legal. …”. Whilst it is true that the content of the said
Letters was not limited to the matter as requested by Datuk
Fariz, the Defendant’s inclusion of the other statements therein
is defensible so as to provide an account of the Defendant ’s
125
Phonon method and the Plaintiff’s reprehensible conduct and its

consequences.
[160] Moving on to ground (c), that Zelim did not verify the
information obtained from the lawyer Rizwan, which in turn was
obtained from a private investigator, in re -examination Zelim
explained that information was in fact received from various
sources such as DW5, Ali Rasulov and Mr. Khotari in Oman.
Zelim then compared all the information and he came to the
conclusion that there was a trend or pattern in the Plaintiff ’s
actions.
[161] In so far as ground (e) is concerned, the said Letters to Repsol

and Occidental are dated 15.12.2016 and 27.12.2016,
respectively. The Plaintiff did not waste any time and had filed
this suit by 9.3.2017. The Defendant responded by not only
defending the suit but also filing its counterclaim comprising of
assertions which it could have made by initiating it s own suit if
the Plaintiff had not already begun the court proceedings. It is
well recognised that a counterclaim is a separate and
independent action by the Defendant, which the law allows to be
joined to the Plaintiff’s action in order to avoid multipli city or
circuitry of suits: see O. 15, r. 2 RoC 2012. The Plaintiff ’s
contention is thus plainly flawed.
[162] It must be added that the facts in this case is distinguishable

from the facts in Tjanting Handicraft Sdn Bhd & Anor v. Utusan
Melayu (Malaysia) Sdn Bhd & Ors [2001] 3 CLJ 571, being one
of the case authorities cited by Ms. Manjit. In that case, the
High Court held, inter alia, that the defendants’ choice of words
was inspired by malice because they far exceeded the realm of
fair and just criticism. The language used was so extreme that no
fair-minded person however obstinate and prejudiced his views
126
were would have honestly used them. Furthermore, the

defendants published the criticism with reckless indifference as
to whether they were true or not, which is certainly not the
finding of the Court in the instant case. The Defendant had
conducted its own investigations and gathered whatever
information and documents that it could and once satisfied with
the truth of the matter as reflected in the impugned statements, it
then sent the said e-mail and said Letters to Repsol and
Occidental.
[163] In sum, although the said Letters contain serious allegations but
as discussed in the preceding paras, the Defendant is justified in
doing so. The Court agrees with the Defendant that the said
Letters were not sent with malice, but instead to provide a
concise narration of the Plaintiff’s wrongdoings in order to
protect the Defendant’s name and reputation as well as to warn
the customers of the risks posed to them as a result of the
Plaintiff’s dishonorable conduct.
Issue 4: Whether the Defendant has committed the tort of

inducement of breach of existing contracts between the Plaintiff
and Repsol and Plaintiff and Occidental?
Issue 5: Whether the Defendant has committed the tort of

unlawful interference of business and tort of intentional
interference with prospective economic advantage?
[164] At the outset, it is observed that in its Written Submission, the

Plaintiff had addressed both these issues together and even
though the elements in respect of each cause of action were set
out with reference to case law, the subsequent analysis of the
127
evidence and arguments were skewed towards the tort of

unlawful interference with trade or business.
- Tort of inducing a breach of contract
[165] In Loh Holdings Sdn Bhd v. Peglin Development Sdn Bhd &
Anor [1984] 2 MLJ 105, the Federal Court referred to a passage
in Greig v. Insole [1978] 1 WLR 302 which summarises the
elements of this tort as follows:
“At common law it constitutes a tort for a third person

deliberately to interfere in the execution of a va lid
contract which has been concluded between two or more
other parties, if five conditions are fulfilled:
First. there must be (a) “direct” interference or (b)

“indirect” interference coupled with the use of unlawful
means; see per Lord Denning M.R. in Torquay Hotel
Company Ltd. V. Cousins [1969] 2 Ch. 106, 138.
As to the meaning of “interference” this is not confined to

the actual procurement or inducement of a breach of
contract: it can cover a case where the third person
prevents or hinders one party from performing his duties
even though this be not a breach.
Secondly, the defendant must be shown to have knowledge

of the relevant contract.
Thirdly, he must be shown to have had the intent to

interfere with it.
Fourthly, in bringing an action, other than a quia timet

action the plaintiff must show that he has suffered special
128
damage, that is more than nominal damage; see Rookes v.

Barnard [1964] A.C. 1129, 1212, per Lord Devlin.
In any quia timet action, the plaintiff must show the

likelihood of damage to him resulting if the act of
interference is successful; Emerald Construction Company
Limited v. Lowthian [1966] 1 W.L.R. 691, 703, per Diplock
L.J.
Fifthly, so far as it is necessary the plaintiff must

successfully rebut any defence based on justification which
the defendant may put forward.”.
(see too, the High Court decision in Lionex (M) Sdn Bhd v.
Allen Lim Lai Wah & Ors [2016] MLJU 967 as cited by the
Defendant’s counsel).
[166] The Plaintiff referred to Hazim’s and Praba’s evidence in

submitting that the Defendant induced Repsol to breach its
contract with the Plaintiff by not giving any further job orders to
the Plaintiff after the said e-mail and said Letters were sent. At
the material time, the project value performed by the Plaintiff
was RM6,812,626.60 out of the total approved contract value of
RM10 million, hence leaving a balance contract value of
RM3,187,373.40, which the Plaintiff claims is its financial loss.
[167] Relying on Loh Holdings (supra), Ms. Manjit submitted that the
Plaintiff need not prove special damages in a quia timet action
and instead, proof of the likelihood of damage to the Plaintiff is
sufficient.
[168] The Court has deliberated on the matter and is in agreement with
the Defendant that the Plaintiff’s case falls short of the legal
requirements due to the following reasons:
129
(a) actual breach of contract is the “gist of the action” for

inducement for breach of contract (see Allen v. Flood
[1898] AC 1). However, the Plaintiff did not adduce any
evidence to show that Repsol and/ or Occidental had
breached the contract with the Plaintiff. Datuk Fariz
himself admitted that it is the prerogative of these
companies to decide what work to give to the Plaintiff
through the PO or Release Order despite the contract that
the Plaintiff has with them [see Article 2 on “Release
Order” in the Contract between Talisman and the Plaintiff
(exhibit P105)]). Datuk Fariz had illustrated this point in
the following manner:
“… even though we have a contract, let’s say

tomorrow I win a contract, 200 million let ’s say, we
have contract for three years. It’s not compulsory for
Petronas to complete 200 million. In three years
maybe they complete 60 million. That is 60 million.
It’s yours, that is for you. Even though you were
given the name numbers 200 million, let’s say. But
they will give you only 60 million for three years.
You cannot complain why didn’t get 200 million, you
cannot.... So this is what the common practice
happen in oil and gas industry.”.
Ms. Cindy went further by calculating the percentage of

unutilised allocation based on the above excerpt in
submitting that it is not uncommon for there to be over
70% unutilised allocation. As such, the unutilised
allocation for Repsol would be a mere 30% and the
Plaintiff has not shown that Repsol has deviated from the
common practice. In any event, the Plaintiff ’s contention
that the Contract with Talisman/ Repsol belongs to the
130
Plaintiff and is for the Plaintiff’s benefit is unfounded.

This will be further elaborated in respect of the issues
under the other tortious action; and
(b) the Plaintiff did not plead that it has suffered any special
damages from the alleged breach. It is trite law that special
damages must be specifically pleaded (see Shen & Sons
Sdn Bhd v. Jutawarna Development Sdn Bhd & Ors [2016]
7 MLJ 183) and failure to do so is fatal to the Plaintiff ’s
claim.
- Tort of unlawful interference with trade or business
[169] The High Court in Megnaway Enterprise Sdn Bhd v. Soon Lian
Hock (sole proprietor of the firm Performance Audio & Car
Accessories Enterprise) [2009] 3 MLJ 525 at pp 537 - 538, had
conveniently set out the following elements in respect of this
tort:
(a) interference with the plaintiff’s trade or business;
(b) unlawful means;
(c) intention to injure the plaintiff; and
(d) the plaintiff is injured thereby.
(see too, the High Court decision in H & R Johnson (Malaysia)

Bhd v. H & R Johnson Tiles Limited & Anor [1995] 2 AMR 1390
and Worldwide Rota Dies Sdn Bhd v. Ronald Ong Cheow Joon
[2010] 8 MLJ 297].
[170] Upon consideration of the pleadings filed, evidence presented

and submissions made by the parties, the Court finds that the
Plaintiff has not discharged the burden of proving the elements
131
of this tort, on a balance of probabilities, for the following

reasons:
(a) Interference with the Plaintiff’s trade or business
Apart from the said Letters, the Plaintiff relied on the

contents of the said e-mail (exhibit P104, see para 39
above) in contending that, when read as a whole, the said
e-mail shows the Defendant’s intention to interfere with
the Plaintiff’s existing three year contract with Repsol so
that Repsol cancels the existing contract with the Plaintiff
and ceases to use the Plaintiff’s services and the Defendant
can divert and take over the contracts and projects from
the Plaintiff and subsequently gain profits. The words “We
sincerely hope that soon this problem will be solved
favorably.” coupled with the Defendant’s request for an
opportunity to present PDT are said to show the
Defendant’s intention for the purported problem to be
resolved in a manner which will monetarily benefit the
Defendant.
There is an obvious flaw to the Plaintiff ’s stance, and it is

this: there can be no interference with the Plaintiff ’s trade
or business when its contracts with Repsol and Occidental
are not even the Plaintiff’s contracts in the first place. The
contract with Repsol was entered on 15.7.2015 (exhibit
P105) which was during the Plaintiff’s tenure as the
Defendant’s agent. The relevant excerpts from the
Exclusive Agency Agreement between the parties dated
31.3.2013 are shown below:
“…
WHEREAS, Principal is an inventor of various types
132
of phonon diagnostic equipment for technosphere,

collectively hereinafter referred to as “Products”
which Principal desires to market in Malaysia; and
WHEREAS, Agent is in the business of providing

products and services, exclusively in Malaysia; and
WHEREAS, Principal and Agent are desirous of

entering into a relationship whereby Agent would
purchase certain Products to conduct phonon
diagnostic services for technosphere, collectively
hereinafter referred to as Services, in Malaysia; and
WHEREAS, Agent intends to be an Exclusive

Supplier in Malaysia, Principal will not be allowed
to appoint other parties, companies or individuals
the right to purchase and supply phonon diagnostic
equipment or products in Malaysia; and
NOW, THEREFORE, both parties hereto agree as

follows:
1. APPOINTMENT OF AGENCY
1.1 Principal agrees to appoint Agent for selling

the Services in Malaysia, and Agent accepts
such appointment.
1.2 The rights and obligations of Agent will be

subject to the terms and conditions specified
hereunder.
2. RIGHTS AND RESPONSIBILITIES OF THE

PARTIES
133
2.1 Agent shall use its best efforts to

continuously promote and expand sale of
Services in Malaysia, and enhance
reputation and goodwill of Products in
Malaysia.
2.2 Agent agrees to sell only the Services only

to the customers in Malaysia.
2.3 Agent shall be responsible for any permit

or license necessary for sale and
distribution of the Products and Services
in Malaysia.
2.4 Agent shall indemnify and hold Principal

harmless against any claims,
compensation, damages, losses and
whatsoever incurred in connection with
the permit or license required under the
laws of Malaysia as well as the sale and
distribution of the Products and Services
in Malaysia.
…”.
It is crystal clear that under the Agency Agreement, the

Plaintiff is obliged to promote and sell only PDT to
customers in Malaysia. The Plaintiff’s contract with
Repsol was therefore executed pursuant to the Plaintiff ’s
obligation under, inter alia, Clauses 2.1 and 2.2 of the
Agency Agreement to expand the customer base of PDT
and was entered into on behalf of the Defendant and
Repsol. Acceptance of the Plaintiff’s submissions would
be at odds with the fundamental legal principles that, as
134
the Defendant’s agent (i) the Plaintiff cannot claim the

contract with Repsol as its own; and (ii) the Plaintiff owes
a fiduciary duty to the Defendant as its principal and this
includes a strict duty not to usurp the benefit of the
contract with Repsol to profit itself and not to put itself in
a position where its profit and its duty are in conflict (see
R v. Hopkins And Another [1915] 20 C.L.R. 464; Guy
Neale and others v. Nine Squares Pty Ltd [2014] SGCA
64; The Board of Trustees of the Sabah Foundation & Ors
v. Datuk Syed Kechik bin Syed Mohamed & Anor [1999] 6
MLJ 497; Gurbachan Singh Bagawan Singh & Ors v.
Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719;
and Lee Hark Lam & Ors v. Kebun Rimau Sdn Bhd & Anor
[2016] 6 MLJ 751).
The response by Repsol’s personnel upon being informed

of the termination of the Agency Agreement speaks
volumes of how the company placed great cons ideration to
the fact that the Defendant is the Plaintiff ’s principal in
the provision of PDT services. Ms. Sim’s reaction has been
discussed earlier. Another relevant piece of evidence is the
fact that its headquarters in Madrid proceeded to carry out
an audit on the contract with the Plaintiff in 2017 and
commissioned its security team from Madrid to interview
the relevant personnel and evaluate the evidence. This
eventually led to the issuance of show cause letters to
Praba and his dismissal.
A pertinent point was also raised by the Defendant as to

the Plaintiff’s approach to its case where it is plainly
obvious that the Plaintiff was cherry-picking as to when it
claims to be the agent of the Defendant or otherwise.
When it is not in its favor, the Plaintiff seeks to treat itself
135
not as an agent and thus entitling it to claim any contract

with the customer as its own and depriving the Defendant
of the benefit of the same. On the other hand, when it is in
its favor, the Plaintiff treats itself as an agent a nd invokes
s. 158 of the Contracts Act 1950 [Act 136] (‘CA 1950’)
against the Defendant and cries termination of agency
without sufficient cause. It seems to me that the Plaintiff ’s
disgraceful conduct has spilled into the trial.
It is therefore without any hesitation, I hold that the

Plaintiff has not proven the first element of this tort.
(b) Unlawful means
The Plaintiff claimed that the Defendant is not at liberty to

contact, and make false representations to, the Plaintiff ’s
customers; defame the Plaintiff; and thereafter offer to
make presentations on PDT technology.
The short answer to the above allegations is that, with the

defence of justification and fair comment having been
successfully proven, the issuance of the said Letters, in
particular to Repsol, cannot amount to unlawful means
since it is not defamation.
As regards Ms. Manjit’s submission that an actual breach

of contract need not be shown as laid down in the
judgment by Lord Denning MR in Torquay Hotel Co Ltd v.
Cousins [1969] 2 Ch 106 and cited in H & R Johnson
(supra) viz.:
“If one person deliberately interferes with the trade

or business of another, and does so by unlawful
means, that is, by an act which he is not at liberty to
136
commit, then he is acting unlawfully, even though he

does not procure or induce any actual breach of
contract.”,
Ms. Cindy has correctly pointed out that it is no longer

good law. The House of Lords in OBG Ltd v. Allan [2008]
1 AC 1 discussed the “unified theory” of the economic
torts of intentionally inducing a breach of contract and
inflicting harm by unlawful means as propounded by their
predecessors and concluded that the two torts are
essentially different and that the distinction should be
maintained. In other words, the “unified theory” was
rejected. Lord Nicholls of Birkenhead extrapolated that:
“172 Thus understood, the rationale and the

ingredients of the “inducement” tort differ from
those of the “unlawful interference” tort. With the
inducement tort the defendant is responsible for the
third party’s breach of contract which he procured.
In that circumstance this tort provides a claimant
with an additional cause of action. The third party
who breached his contract is liable for breach of
contract. The person who persuaded him to break his
contract is also liable, in his case in tort. Hence this
tort is an example of civil liability which is
secondary in the sense that it is secondary, or
supplemental, to that of the third party who
committed a breach of his contract. It is a form of
accessory liability.
173 This form of liability is to be contrasted with

the tort of unlawful interference. This is a “stand-
alone” tort of wide scope, imposing primary liability
137
on a defendant for his own conduct, irrespective of

whether on the facts anyone else may also be lia ble,
either in contract or in tort. On this I agree with
Philip Sales and Daniel Stilitz in their stimulating
article “Intentional Infliction of Harm by Unlawful
Means” [1999] 115 LQR 411, 433.”,
while Lord Hoffmann reasoned as follows:
“44 Finally, what counts as a breach of contract? In

Torquay Hotel Co Ltd v. Cousins [1969] 2 Ch 106,
138 Lord Denning said that there could be liability
for preventing or hindering performance of the
contract on the same principle as liability for
procuring a breach. This dictum was approved by
Lord Diplock in Merkur Island Shipping Corpn v.
Laughton [1983] 2 AC 570, 607-608. One could
therefore have liability for interference with
contractual relations even though the contracting
party committed no breach. But these remarks were
made in the context of the unifed theory which
treated procuring a breach as part of the same tort
as causing loss by unlawful means. If the torts are
to be separated, then I think that one cannot be
liable for inducing a breach unless there has been a
breach. No secondary liability without primary
liability. Cases in which interference with
contractual relations has been treated as coming
within the Lumley v. Gye tort (like Dimbleby & Sons
Ltd v. National Union of Journalists [1984] 1 WLR
67 and [1984] 1 WLR 427) are really cases of
causing loss by unlawful means.”
138
(emphasis added).
OBG’s case was referred by the High Court in Deepak

Jaikishan a/l Jaikishhan Rewachand & Anor v. Intrared
Sdn Bhd & Anor [2013] 7 MLJ 437 for the explication on
the element of the defendant’s intention to harm the
plaintiff.
(c) Intention to injure the Plaintiff
The Plaintiff maintained that the said e-mail and said

Letters were sent by the Defendant with an intention to
injure the Plaintiff. The views of the Court as expressed in
relation to the issues as to whether the comment is on a
matter of public interest and whether there is malicious
intent under the defence of fair comment are applicable
here. Basically, the Defendant wanted to disassociate itself
from the Plaintiff and to warn Repsol of the possibility
that the Plaintiff’s actions may have jeopardised industrial
and environmental safety.
It must also be highlighted that the Plaintiff ’s contention

that the said e-mail (exhibit P104) contains a request by
the Defendant “for an opportunity to present PTD” is
inaccurate because Ms. Sim and Zelim had testified that
Zelim had presented on PTD to Repsol in October 2016
which is before the said e-mail and said Letters were sent.
In fact, that was how Zelim came to know about the
contract between the Plaintiff and Repsol. What Zelim
stated in exhibit P104 was that additional information
regarding the Defendant and its rights to PTD would be
made available to Repsol if so requested.
The Court holds that this mental ingredient for the tort was
139
not fulfilled.
(d) Injury to the Plaintiff
As mentioned earlier, the Plaintiff submitted that Hazim ’s

and Zelim’s evidence in court supports a finding that the
Plaintiff was injuriously affected to the tune of
RM3,187,373.40 which is the balance of the amount
allocated by Repsol to the contract but was not utilised
when Repsol ceased to give any more work to the Plai ntiff.
However, the Court remains unconvinced by the Plaintiff ’s

arguments for the same reasons as before. Moreover, Ms.
Cindy referred to Lexis Nexis Words, Phrases & Maxims
which gave this explanation for “Damage And Loss”:
“A synonym of ‘damage’ when applied to a person

sustaining an injury, is ‘loss’. Loss is the generic
term. Damage is a species of loss. ‘Damage’ signifies
the thing taken away - the lost thing which a party is
entitled to have restored to him, so that he may be
made the whole again.”.
As aptly described by learned counsel for the Defendant,

“Since the Plaintiff did not possess the entitlement or right
to the whole of the allocation sum to begin with, the
Plaintiff cannot be heard to say that it has suffered
damage by reason of the 30% unutilised allocation. … In
short, the Defendant cannot take away from the Plaintiff
what the Plaintiff did not possess in the first place; and
the Plaintiff cannot claim to have lost something that
never belonged to itself.”.
Lest it be forgotten, no injury was pleaded by the Plaintiff
140
at all.
[171] In view of all the aforesaid considerations, the Plaintiff ’s causes

of action premised on the tort of inducement of breach of
contract and tort of unlawful interference with trade or business
are unmeritorious.
Issue 6: Whether the Plaintiff is entitled to the reliefs sought?
[172] Based on the foregoing discussion of the issues, the Court

has found that the Plaintiff has failed to prove its causes of
action. Hence, the answer to the question posed above
must be in the negative.
Issue 7: Whether the Plaintiff had breached the Agency

Agreement?
- Oral evidence to prove the terms of the Appointment Letters
[173] The Plaintiff’s appointment as the Defendant’s exclusive agent

in Malaysia, Brunei, Indonesia, Thailand, Turkmenistan,
Sultanate of Oman and South East Asia (exhibits P72 to P77) is
one of the agreed facts. According to the Defendant, the terms in
exhibit P73 governing the Malaysia sector apply to th e
Appointment Letters in exhibits P74 to P77 as well because
these Letters are very brief and were not intended to express the
entire agreement between the parties. In these circumstances, it
was submitted with reference to the case of Quality Concrete
Holdings Bhd v. Classic Gypsum Manufacturing Sdn Bhd & Ors
[2012] 2 MLJ 521 that extrinsic evidence in the form of oral
evidence by Zelim is admissible to prove the other terms which
had been agreed upon. The Defendant urged the Court to read
141
the Appointment Letters in conjunction with the Agency

Agreement.
[174] The Plaintiff disagreed with the Defendant’s propositions on the

grounds that –
(a) the Appointment Letters for other jurisdictions do not

make any reference at all to the Agency Agreement;
(b) the evidence being relied upon by the Defendant arose

during the re-examination of Zelim and was not put to any
of the Plaintiff’s witnesses and was not mentioned by any
other Defendant’s witnesses;
(c) any oral evidence to be admitted should have been adduced

through Prof. Vladimir who had signed the Agency
Agreement;
(d) sections 91 and 92 of the EA 1950 excludes admission of

oral evidence to modify a written contract for the purpose
of adding to the terms of a written agreement; and
(e) the Court should only be concerned to discover what the

instrument means and has no power to improve upon the
Appointment Letters and nor can it introduce terms to
make them fairer or more reasonable (Berjaya Times
Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn
Bhd) v. M Concept Sdn Bhd [2010] 1 MLJ 597 which cited
with approval the case of Attorney General of Belize v.
Belize Telecom Limited [2009] UKPC 11 referred).
[175] Upon scrutiny of the NoE, I find that Zelim’s evidence as quoted
by Ms. Cindy (and underlined in the excerpt below) came about
in the course of re-examination where learned counsel for the
Defendant sought an explanation from Zelim as to his answers
142
during cross-examination when he said that “We have agency

agreement for Malaysia which is the main base document. ” and
“All the Appointment Letters are secondary to the Agency
Agreement. The Letters of Appointment have to be in line with
Agency Agreement.”. Zelim clarified (see NoE, Vol. 18 on
21.1.2020 at pp 69 - 70) that:
“Agency Agreement for Malaysia is a complete document

and it was the first document we signed with MRA … All
other agreements or appointments as an exclusive agent
were done in a form of letter of appointment. … these
letters are short. They have much less information. So …
when we put these letters together we still refer to the
Agency Agreement for Malaysia being a complete and
detailed document. …
Because there are also agent appointments. So there ’s also

exclusivity clause there. Agency Agreement for Malaysia
gives a very detailed explanation of all the terms, when it
comes to exclusive agency agreement. And other letters of
appointment are also referring to exclusive agent
appointment. So, since the appointment letters do not give
enough information, we refer back to Agency Agreement to
understand what is meant by exclusivity.”.
[176] Section 91 of the EA 1950 stipulates that when the terms of a

contract have been reduced to the form of a document, no
evidence shall be given in proof of the terms of the contract,
except the document itself. Section 92 provides that when the
terms of any such contract have been proved according to
section 91, no evidence of any oral agreement shall be admitted
as between the parties to any such instrument for the purpose of,
inter alia, varying or adding to, its terms except that the
143
existence of any separate oral agreement, as to any matter on

which a document is silent and which is not inconsistent with its
terms, may be proved, and the court shall have regard to the
degree of formality of the document [refer proviso (b)].
[177] The Defendant submitted that the Appointment Letters do not

contain the entire agreement and embodies only bare minimum
statements as to the Plaintiff’s appointment and yet, the
transactions secured by virtue of the Appointment Letters may
give rise to transactions worth millions of Ringgit. Whilst it is
obvious that the Appointment Letters contain brief terms, the
Defendant’s attempt to prove that the entire terms of the Agency
Agreement are applicable to the Appointment Letters by relying
solely on Zelim’s evidence during re-examination cannot be
allowed when the matter was not put to Hazim and Zelim so that
they may give their version of the conventional basis on which
they had conducted their affairs.
[178] However, in my opinion, a plain reading of the contents of the

Appointment Letters in exhibits P74 to P77 show that the
appointment of the Plaintiff as the Defendant ’s “exclusive
agent” entails the obligation on the part of the Plaintiff to
promote the Defendant’s product namely, PDT to the exclusion
of all other products in the territories as stipulated in the
Letters. The Appointment Letters begin with a standard sentence
stating that “We, Diatech hereby confirm that your company,
MRA … has been appointed as our EXCLUSIVE AGENT in the
territory of … for our product as follows: ”. The product is PDT
and the 28 items of diagnostics, inspection, services and surveys
provided are then listed. Hence, it can be impli ed that, as the
Defendant’s agent, the Plaintiff is not allowed to sell diagnostic
service which is in competition with PDT. This is consonant
144
with the fiduciary duty owed by the Plaintiff to the Defendant as

its principal including the “no conflict rule” as indicated earlier.
- Breach of the Agency Agreement
[179] Clause 2.2 of the Agency Agreement expressly provides that the
Plaintiff agrees to sell only the PDT services to the customers in
Malaysia. Hazim testified that HATs and PDT are both
diagnostic and inspection technologies having relatively similar
functions ie, to determine the technical conditions of, and the
presence of leaks and defects in, industrial assets. Datuk Fariz
admitted that the Plaintiff is fully aware that it should not be
promoting another technology in competition with PDT. So,
while it is true that the Plaintiff can provide other diagnostic
services than PDT as submitted by Ms. Manjit, it is certainly not
permissible for the Plaintiff to promote HATs as an “enhanced
version” of PDT capable of performing the same function. By
selling and promoting HATs, the Court has no hesitation in
concluding that the Plaintiff has breached the Agency
Agreement.
[180] Further, by way of Clause 7.3 of the Agency Agreement, the

Plaintiff shall not assign any, and all, of its rights or obligations
under the Agreement to any third party without prior written
consent from the Defendant. The Defendant submitted that the
evidence has established that the Plaintiff had appointed the
following third parties as agent for the following countries:
(a) BISCO for Saudi Arabia pursuant to the “Phonon

Diagnostic Technology Agency Agreement” dated
10.6.2015 (exhibit P220);
145
(b) Berk Hill for Turkmenistan pursuant to the “Phonon

Diagnostic Technology Agency Agreement” dated 1.6.2015
(exhibit P221);
(c) Velosi for Vietnam; and
(d) Vanguard for Oman pursuant to the “Contract Agreement

for Phonon Diagnostic Technology” between the Plaintiff
and Vanguard dated 29.6.2016 (exhibit D187).
[181] On the other hand, the Plaintiff contended that it appointed the
abovementioned parties as joint business partners to promote
PTD in the respective countries. There was no assignment of the
Plaintiff’s rights or obligations under the Agency Agreement
and thus, there is no breach of the same, so goes the argument.
The Plaintiff additionally posited that the Defendant ’s denial of
any knowledge on the aforesaid appointments is unbelievable for
the following reasons:
(a) Ilia’s evidence that he prepared the “Report Studies For

Provision Of Reliability Study Utilizing Phonon Diagnostic
Technology For Pipeline PID0089” for Brunei Shell
(exhibit P82) where BEST Integrated Engineer Solution &
Supplies Sdn Bhd (‘BEST’) is the local agent;
(b) the PO dated 10.9.2014 issued by Datuk Fariz to Zelim for

PDT services for Petronas Turkmenistan (exhibit D179);
(c) Zelim’s evidence that the Defendant had done two projects
for Sharq in Saudi Arabia and the corresponding technical
reports dated 31.12.2014 (exhibits P85 and P86) which
show Bisco’s involvement in the said projects; and
(d) the purported private investigator somehow knew where to

obtain the agreements in exhibits P220, P221 and D187.
146
[182] The ground relating to Ilia’s testimony can be dealt with swiftly.
I have perused the NoE, Vol. 9 and I find that although Ilia
admitted to being involved in the project for Brunei Shell
including the preparation of the report, he also said that the
front page to exhibit P82 has been replaced and some
information therein has been amended or replaced. Ilia was
unshaken in his evidence and appears to me to be a truthful
witness. Zelim had also testified that BEST has no business
relationship with the Defendant and that the Defendant would
not put BEST’s logo on the report. Moreover, there are no
signatures or initials of the Defendant ’s employees on the cover
of the report. It can thus be safely concluded that exhibit P82 is
not the final version of the report which was prep ared by the
Defendant.
[183] As for the second ground, the Plaintiff has failed to show the
nexus between the issuance of the PO for PDT services for
Petronas Turkmenistan with the alleged knowledge by the
Defendant of the Plaintiff’s agreement with Berk Hill.
[184] Moving to the third ground, when re-examined, Zelim testified

that the Defendant had carried out PDT works for one
complimentary project for Sharq involving two objects, a tank
and a column. Being a complimentary project, no PO was
issued. However, Zelim denied that exhibits P85 and P86 are the
reports prepared by the Defendant for the project because these
are not signed or initialed by its employees. The Plaintiff has
similarly failed to show the linkage between these reports with
the alleged knowledge by the Defendant of the Plaintiff’s
agreement with Bisco.
147
[185] The final ground which questioned the private investigator ’s

ability in discovering the agreements is purely speculative and
not founded on any credible evidence.
[186] In view of all of the above, the Defendant has correctly

submitted that not a shred of evidence was produced by the
Plaintiff to support its contention that the Defendant had
knowledge about the appointment of local partners in other
jurisdictions to promote PDT and had agreed to the same. If the
Plaintiff had indeed informed the Defendant of this matter and
obtained the Defendant’s consent, there would surely have been
some correspondence to that effect. However, none was ever
produced during the trial.
[187] By virtue of Clause 1.1 in the PDT Agency Agreements entered

into by the Plaintiff with Bisco (exhibit P220) and Berk Hill
(exhibit P221), the Plaintiff had appointed Bisco and Berk Hill,
respectively, as a joint business partner to promote, market and
solicit bids, orders or contracts from customers for the provision
of PDT services by the Plaintiff and Bisco/ Berk Hill as agent in
the Kingdom of Saudi Arabia/ Turkmenistan. The duration of
both agreements is for 60 months. The Plaintiff asserted that it
needed to appoint the local partners as a means of securing
projects from the oil and gas companies. However, as
highlighted by the Defendant, there is no provision in the
Agency Agreement which allows the Plaintiff to enter into such
agreements on its own. In so far as Saudi Arabia, the Plaintiff
was not even appointed as an agent there by the Defendant and
so the Plaintiff has no valid reason to be dealing with Bisco in
Saudi Arabia in the manner that it did. The Court is satisfied
that the Defendant has proven, on a balance of probabilities, that
the Plaintiff has breached the Agency Agreement by entering
148
into agreements in respect of the Defendant’s PDT with other

parties without the consent of the Defendant.
- Is Clause 7.2 of the Agency Agreement void?
[188] The Plaintiff submitted that pursuant to Clause 7.2 of the

Agency Agreement, both parties agreed not to claim for any
damages arising from the breach of Agency Agreement. The
entire Clause 7.2 reads:
“In no event shall either party be liable to the other party

for indirect, special or consequential damages or for loss
of anticipated profits on any claims of any kind resulting
from any performance, non-performance, or breach of this
Agreement.”.
[189] The Defendant takes the position that Clause 7.2 is void
pursuant to s. 29 CA 1950 which provides that:
“Agreements in restraint of legal proceedings void
29. Every agreement, by which any party thereto is

restricted absolutely from enforcing his rights under or in
respect of any contract, by the usual legal proceedings in
the ordinary tribunals, or which limits the time within
which he may thus enforce his rights, is void to that
extent.”.
[190] In CIMB Bank Bhd v. Anthony Lawrence Bourke & Anor [2019]
2 MLJ 1, the issue before the apex court was whethe r clause 12
of the loan agreement which was executed by the parties offends
s. 29 CA 1950. The said clause 12 reads:
“Liability
149
Notwithstanding anything to the contrary, in no event

will the measure of damages payable by the Bank to
the Borrower for any loss or damage incurred by the
Borrower include, nor will the Bank be liable for,
any amounts for loss of income or profit or savings,
or any indirect, incidental consequential exemplary
punitive or special damages of the Borrower, even if
the Bank had been advised of the possibility of such
loss or damages in advance, and all such loss and
damages are expressly disclaimed.”.
[191] Balia Yusof FCJ in delivering the judgment of the Court held
that:
“[37] We agree with the Court of Appeal when it opined

that it is not right to think that a right can be dissociated
from remedy and as can be clearly demonstrated by the
instant appeal, where despite the finding that there is a
breach by the bank, if cl 12 of the loan agreement is
allowed, it would be an exercise in futility for the plaintiffs
to file any suit against it. The plaintiffs are precluded from
claiming the remedies against the bank. Clause 12 of the
loan agreement negates the rights of the plaintiff s to a
suit for damages, and the kind of damages as spelt out in
the said clause encompasses and covers all forms of
damages under a suit for breach of contract or
negligence. There is an absolute restriction. Section 29 of
the Contracts Act 1950 prohibits such restriction.”
(emphasis added).
[192] Based on the above authority, this Court holds that Clause 7.1 of
the Agency Agreement, which stipulates that “In no event shall
either party be liable …”, has the effect of precluding the
150
Defendant from claiming remedies against the Plaintiff and is

therefore void and prohibited by s. 29 CA 1950. The natural
consequence is that the Plaintiff can be, and is, liable for any
damages or losses resulting from breach of the Agency
Agreement.
Issue 8: If Question 7 above is answered in the affirmative,

whether the Defendant is estopped from alleging that
the Agency Agreement was terminated due to breach of
the Agency Agreement?
Issue 13: If Question 7 above is answered in the affirmative,

whether the Defendant has waived its rights from
alleging that the Agency Agreement was terminated due
to breach of the Agency Agreement?
[193] The Plaintiff asserted that the Defendant is estopped from

alleging the Plaintiff’s breach of contract because the Defendant
did not rely on Clause 6.2(a) of the Agency Agreement to
terminate the same and giving the Plaintiff 15 days ’ notice to
rectify the breaches.
[194] The Plaintiff also argued that the Defendant has waived its
rights from alleging that the Agency Agreement was t erminated
due to purported breaches or illegal conduct by the Plaintiff
since in the notice of termination, the Defendant had chosen not
to give any reasons at all for the termination and the Defendant
did not take any action against the Plaintiff until th e present suit
was filed by the Plaintiff.
[195] The Defendant retorted that the mere non-reliance on Clause

6.2(a) of the Agency Agreement is no basis for the Plaintiff ’s
claim of estoppel or waiver. In the case of Deepak Jaikishan a/l
151
Jaikishhan Rewachand & Anor v. Intrared Sdn Bhd & Anor

[2013] 7 MLJ 437, Nallini Pathmanathan J (now FCJ) rejected
the defendant’s estoppel and waiver claim even though the
plaintiff in that case did not rely on a clause in the agreement
which would have given the defendant 14 day to rectify its
breach of payment.
[196] I agree with the Defendant that just because it chose, based on
acceptable grounds, to terminate the Agency Agreement based
on Clause 6.3, as expressly provided for under the Agreement, it
is not estopped from making a case that the Plaintiff is in breach
of the Agreement. This is clearly a separate cause of action that
is available to the Defendant.
[197] Furthermore, the Plaintiff has committed breaches of the Agency

Agreement and other unlawful conduct. The Plaintiff did not
come to court with clean hands and is therefore not entitled to
rely on the equitable doctrine of estoppel against the Defendant
(see Cheng Chuan Development Sdn Bhd v. Ng Ah Hock [1982] 2
MLJ 222, Ho Weng Leong v. Ng Kee Chin [1996] 5 MLJ 139 and
Boo Are Ngor (P) v. Chua Mee Liang (P) (sued as public officer
of Kim Leng Tze Temple) [2009] 6 MLJ 145 whereby Ms.
Manjit’s attempts to distinguish these cases and the case of SPM
Membrane Switch (supra) as cited by Ms. Cindy are, to my
mind, not on valid grounds).
[198] As for the so-called delay of 15 months between the date of the
notice of termination and the filing of the Defendant ’s
counterclaim, the Defendant did raise the issues of some of the
alleged breaches which had been committed by the Plaintiff in
the e-mails dated 18.5.2015, 21.5.2015, 27.52015 and
14.10.2015 (exhibits P89, P91, P93 and P95) to the Plaintiff.
Besides, Clause 7.1 of the Agency Agreement states that “Any
152
failure to enforce any of provisions of this Agreement shall not

be construed as waiver by such party of its right concerning
such provision.”. The Federal Court in Kumpulan Darul Ehsan
Bhd v. Mastika Lagenda Sdn Bhd [2017] 4 MLJ 561 had
occasion to consider a clause which is similar to Clause 7.1 and
found that there was no basis to call upon equity in aid to the
case of the defendant and that laches and unreasonable delay do
not arise. In addition, the Defendant is well within the limitation
period of 6 years for a claim based on breach of contract (see s .
6 of the Limitation Act 1953 [Act 254]).
Issue 12: Whether the Defendant’s conduct of terminating the

Plaintiff’s agency was pre-maturely without any sufficient cause
or is wrongful and unlawful?
[199] The Plaintiff submitted that Clause 6.1 of the Agency

Agreement clearly provides that the Agreement shall be in effect
for a period of 5 years from 31.3.2013. However, the Defendant
terminated the same prematurely vide a notice dated 24.2.2016
(exhibit P97) and without sufficient cause because no reasons at
all were stated in the notice. The Plaintiff claimed that pursuant
to s. 158 CA 1950, it is entitled to compensation. The said
provision reads:
“Compensation for revocation by principal or

renunciation by agent
158. Where there is an express or implied contract that

the agency should be continued for any period of
time, the principal must make compensation to the
agent, or the agent to the principal, as the case may
be, for any previous revocation or renunciation of
the agency without sufficient cause.”.
153
[200] Ms. Manjit cited the decisions of the Court of Appeal in

American International Assurance Co Ltd v. Koh Yen Bee (F)
[2002] 4 MLJ 301 and Merbok Hilir Bhd v. Sheikh Khaled
Jassem bin Mohammad Jassem Al-Thani (t/a Petroserv General
Trading Establishment) and other appeals [2013] 5 MLJ 407 for
the propositions that s. 158 CA 1950 does not apply to all
contracts of agency but only to the contracts of agency for a
fixed period of time and that a fixed term agency cannot be
terminated without sufficient cause, consistent with ss . 157 and
158 CA 1950, respectively.
[201] She further referred to the evidence given by Hazim and Datuk
Fariz on the hardship allegedly suffered by the Plaintiff as a
result of the abrupt termination of the Agency Agreement.
Learned counsel urged the Court to allow the Plaintiff ’s claim
for compensation for the unlawful, wrongful and premature
termination of the same.
[202] The Plaintiff, however, did not response to the fundamental

issue that it did not plead this cause of action and nor did it seek
the relief as what was suddenly raised at the stage of
submission. This failure to plead is sufficient to dispose of Issue
12 altogether but for the sake of completeness, my views on the
Plaintiff’s contentions have been partly articulated in paras 71 -
76 above.
[203] In furtherance of those views –
(a) the Defendant has provided a cogent reason as to why

Clause 6.3 was chosen instead of Clause 6.2(a) namely,
because it did not want the Plaintiff to delay the
termination of the Agency Agreement. This is how Zelim
describes it:
154
“In our correspondence with MRA in May 2015 and

October 2015 we clearly named the issues we have
with MRA and we also list the reasons for eventual
termination of the agency agreement. Since MRA
denied all our accusations of any unlawful activities,
we realized that if we followed the process of 6.2, we
will simply delay the process of termin ation of the
agency agreement. MRA was interested in buying
time to make sure agency agreement stays valid as
long as possible. Not willing to give them this
opportunity, we chose to terminate the agreement
based on 6.3 because we felt we have already
expressed all our claims clearly enough in our
emails.”; and
(b) although the Plaintiff in its letter dated 14.3.2016 (exhibit

P98) stated that “… the fixed term agency agreement has
been prematurely terminated by DIATECH for no reason
whatsoever.”, the evidence before this Court proves, on a
balance of probabilities, that the Plaintiff has committed
breach of contract, misrepresentation, misappropriation of
the business opportunity belonging to the Defendant as its
principal, copyright infringement and breach of
confidential information (the latter two causes of action
will be discussed in the ensuing paras). There is, therefore,
more than sufficient cause for termination and there is no
room for the application of s. 158 CA 1950 in this case.
[204] Before moving on to the evaluation of Issues 9, 10 and 11, it

should be made clear that in the course of determining these
three Issues, the Court has borne in mind the overarching
additional Issue 14 which was framed by the Defendant ie,
155
“Whether the Plaintiff has a defence to the Defendant ’s

counterclaim?”.
Issue 9: Whether the Plaintiff infringed the copyright of the

Defendant?
- The Defendant’s pleaded case
[205] Before proceeding to deal with the issue as to whether the

Defendant has fulfilled the legal requirements to establish its
cause of action for infringement of copyright, I shall first need
to address the Plaintiff’s submission on the point regarding
pleadings.
[206] Ms. Manjit referred to paras 17, 50 and 53 of the

Statement of Defence And Counterclaim which state
as follows:
“17. The Defendant further states that the Defendant is the

rightful copyright owner of the Information and
Documents. The copyright is subsisting in the
literary work of the Information and Documents as
the Defendant has expended much skill and effort to
create the Information and Documents.
50. The Defendant states that there is reproduction of the

Defendant’s material in relation to the PDT
Technology by the Plaintiff. A perusal of the
Plaintiff’s presentation materials for HAT would
disclose that the Plaintiff has copied substantially
from the Defendant’s presentation material.
156
53. A simple comparison between the Technical Report

and/or presentations of HAT and PDT would disclose
that the Technical Report and/or presentations for
HAT was copied entirely from PDT, save for the
details in Russian language in the diagram which
was removed by the Plaintiff.”,
and argued that the Defendant’s claim on copyright infringement

ought to fail on point of pleadings. This is because –
(a) the Defendant has failed to plead the particulars of

copyright infringement and the purported “confidential
information and documents pertaining to PDT”. In para 49
of the Statement of Defence and Counterclaim, the
Defendant stated that it is “… unable until discovery to
give particulars of all the acts of breach of confidential
information and copyright infringement committed by the
Plaintiff, but will at the trial of this action seek to recover
in respect of all such acts. The following are the
particulars that the Defendant can give until after
discovery.”. Ms. Manjit argued that this statement shows
that the Defendant is aware of the requirement for it to
plead the particulars of all acts of breach but no
application for the discovery of documents and amendment
of pleadings were made by the Defendant; and
(b) the Defendant is not entitled to rely on the evidence given

by Zelim on the comparisons between –
(i) the Defendant’s presentation on the company and

PDT at p 500, C4 (exhibit D261) and the Plaintiff’s
presentation on HATs at p 471, C4 (exhibit D64)
157
showing the “Scientific Principals Of Phonon Testing

Technology” and “Hybrid Acoustic Technology
(HAT) Fundamental”, respectively, with the same
drawing and mathematical concept of E + M → PhE
(where “E” = Energy, “M” = Material and “PhE” =
Phonon Emission) and physics on the “occurring of
stress”;
(ii) the Defendant’s webpages at p 3807, B25

(exhibit P138) and p 8127, B54 (exhibit D258), and
the Plaintiff’s HATs marketing materials/ bunting at
the exhibition with Bisco at pp 8133 and 8135
(exhibit D196) showing similar screenshots of
“Phonon diagnostics of tank structures:
Interconnection diagrams” and the “Real-time defect
processing and identification” as against the
Plaintiff’s “Engineering & Material Management
Asset Integrity Safety Management Assessment ”
(“Lower Semisphere”, “Upper Semisphere” and
“Phonon Diagnostics ‘Flat’ Scheme”);
(iii) the Defendant’s presentation on the company and

PDT at p 500, C4 (exhibit D261) and the Plaintiff’s
HATs marketing materials/ bunting at the exhibition
with Bisco at pp 8132 (exhibit D196) showing the
“Scientific Principals Of Phonon Testing
Technology” and “HATs Fundamental”, respectively,
with the same drawing and mathematical concept of
E + M → PhE (where “E” = Energy, “M” = Material
and “PhE” = Phonon Emission) and physics on the
“occurring of stress”; and
158
(iv) the Defendant’s presentation on the company and

PDT at p 509, C4 (exhibit D261) and the Defendant’s
webpage at p 3807, B25 (exhibit P138), and the
Plaintiff’s HATs marketing materials/ bunting at the
exhibition with Bisco at pp 8134 (exhibit D196)
showing a similar drawing of the “3D-Model Of Tank
With Defective Areas” and the “Grade Of Defective
Areas” (insignificant, significant and critical defects
at the Upper, Middle and Lower Levels) as against
the Plaintiff’s services, respectively, for the reason
that the subsistence of copyright in the Defendant ’s
work as set out above is in the form of artistic works
pursuant to para 7(1)(c) of the Copyright Act 1987
(‘CA 1987’) but para 17 of the Statement of Defence
and Counterclaim mentions literary work and not
artistic work.
[207] I have examined the Defendant’s pleadings and it is my

considered opinion that the Defendant has pleaded sufficient
particulars of the alleged copyright infringement and the
information and documents pertaining to PDT as evident in
paras 50 and 53 of the Statement of Defence And Counterclaim.
In para 50, the Defendant had expressly pleaded that the works
infringed consist of the Defendant’s presentation material in
relation to PDT while the infringing works consist of the
Plaintiff’s presentation materials for HATs. In para 53, the
Defendant had pleaded that a simple comparison betw een the
Technical Report and/ or presentations on PDT and HATs would
disclose that the Technical Report and/ or presentations on
HATs was copied from PDT.
[208] Additionally, in para 52, the Defendant had averred that in the
course of marketing PDT to its customers, the Defendant had
159
provided the Plaintiff with technical information for them to

prepare the presentation slides for PDT to its customers. This is
because the Plaintiff does not possess any technical knowledge
on PDT as the Plaintiff was never authorised to perform services
using PDT for its customers.
[209] Moreover, the trite legal principles that a party must plead
material facts and not evidence (see Sukatno v. Lee Seng Kee
[2009] 3 MLJ 306; Iftikar Ahmed Khan (as a representative for
the estate of Sardar Mohd Roshan Khan, deceased) v. Perwira
Affin Bank Bhd (previously known as Perwira Habib Bank
Malaysia Bhd) [2017] MLJU 1765; and Tony Pua Kiam Wee v.
Government of Malaysia and another appeal [2019] 12 MLJ 1)
and evidence given at the trial can overcome defects in the
pleadings, if any, where the net result of such evidence is to
prevent the other side from being taken by surprise, stand in the
Defendant’s favor. In the instant case, the Plaintiff was not
prejudiced or taken by surprise by any aspect of the Defendant ’s
pleadings on copyright infringement since the material facts
have been pleaded such as to enable the Plaintiff to respond and
prepare its case in a comprehensive manner as seen from the
detailed questioning of the witnesses during the trial and
extensive written submissions filed (see the series of decisions
by the apex court in Playing Cards (Malaysia) Sdn Bhd v. China
Mutual Navigation Co Ltd [1980] 2 MLJ 182; Siti Aisha binti
Ibrahim v. Goh Cheng Hwai [1982] 2 MLJ 124; Ang Koon Kau
& Anor v. Lau Piang Ngong [1984] 2 MLJ 277; and Kondisi
Utama Sdn Bhd v. Baltic Agencies Pte Ltd and another appeal
[2019] 1 MLJ 181).
[210] It is undeniable that the Defendant had pleaded “literary work”

as opposed to “artistic work” (see para 17 in the Statement of
Defence and Counterclaim). According to sub-s. 7(1) CA 1987,
160
both these works are eligible for copyright. The definition of

“artistic work” under limb (a) in s. 3 CA 1987 includes a
graphic work, photograph, sculpture or collage irrespective of
artistic quality whilst the definition of “graphic work”, also in
limb (a) of the same section, includes any painting, drawing,
diagram, map, chart or plan.
[211] There are eight limbs to the definition of “literary work” in s. 3

CA 1987 but Ms. Cindy has chosen to highlight the following
limbs:
“(a) novels, stories, books, pamphlets, manuscripts,

poetical works and other writings;
(e) letters, reports and memoranda;
(g) tables or compilations, whether or not expressed in

words, figures or symbols and whether or not in a
visible form;
…”.
[212] The copyrighted work which learned counsel submitted belongs

to the Defendant and was infringed are as follows:
(a) the Defendant’s webpages on PDT at pp 3803 - 3813, B25

(exhibit P138) and pp 8121 - 8129, B54 (exhibit D258);
(b) the Defendant’s presentation on the company and PDT at

pp 494 - 525, C4 (exhibit D261);
161
(c) the Defendant’s technical information in the presentation

slides on PDT at pp 4322 - 4347, B29 (exhibit P139); and
(d) the Defendant’s technical information in the presentation

slides on PDT at pp 4396 – 4427, B29 (exhibit P140)
(hereinafter collectively referred to as the ‘Copyrighted

Works’).
[213] The Defendant alleged that the Copyrighted Works were

infringed by the Plaintiff through the following:
(a) the Plaintiff’s Presentation on HATs at pp 464 - 493, C4

(exhibit D64); pp 527 - 565, C5 (exhibit D65); pp 436 -
463, C4 (exhibit D189); and pp 566 - 617, C5 (exhibit
D192);
(b) the Plaintiff’s Presentation on HATs to MTBE dated

15.1.2016 at pp 618 - 652, C5 (exhibit D193); and
(c) the Technical Proposal on HATs to MTBE at pp 4348 -

4374, B29 (exhibit D194)
(hereinafter collectively referred to as the ‘Infringing Works’).
[214] Ms. Cindy further submitted that the Copyrighted Works are
literary and/ or artistic works which are eligible for copyright
for the following reasons:
(a) the Copyrighted Works comprise of expressions in writing

and based on the definition of “literary work” in s. 3 CA
1987, the Copyrighted Works are “literary work”, which is
eligible for copyright. In this regard, although the
Defendant’s presentation in exhibit D261 also contains
photographs and drawings, as a whole it can still be
162
considered as “literary work” pursuant to s. 3 CA 1987;

and
(b) the Copyrighted Works contained photographs/ screenshots

of PDT software and diagrams and charts in relation to
PDT. The diagrams and charts fall within the definition of
“graphic works” in s. 3 CA 1987 whilst the graphic works
and photographs fall within the definition of “artistic
works” which is eligible for copyright.
[215] I have scrutinised the Copyrighted Works in exhibi ts P138,

P139, P140, D258 and D261 and I find that these contain
writings, diagrams, drawings, photographs and screenshots.
Based on the Plaintiff’s submission, it accepts that the pages
from the Copyrighted Works as set out in paras 37, 38 and 48 of
the Defendant’s Written Submission (Vo. 2: Defendant ’s
Counterclaim) (encl. 304) fall within the description of artistic
work namely, diagrams, drawings and photographs. However,
the Plaintiff’s complaint is that the Defendant’s pleaded
copyright protection is predicated on (i) literary work and not
artistic work; and (ii) presentation materials and not web pages.
[216] The Defendant responded by relying on O. 1A, RoC 2012 and

the decisions of the appellate courts in Playing Cards
(Malaysia) (supra); Karuppannan v. Elizabeth [2010] 1 MLJ
156; and Malayan Banking Bhd v. KM Music Lines Sdn Bhd
[2015] 5 MLJ 533 in submitting that the purpose of the rules of
pleadings is to enable the other party to know the precise case
that it has to answer and these should not be applied to shut out
a party from making its case. Further relevant facts or issue s of
fact may emerge before a case is concluded, and if both parties
were able to deal with such facts or issues, then just because the
facts were not pleaded should not become a tool to shut out
163
justice on the merits which require that the substantive iss ue

between the parties be considered.
[217] In my view, the Defendant’s submission is compelling in the

circumstances of this case. The failure to plead that the
copyright subsists in the artistic work and that the copyrighted
works include the Defendant’s web pages did not catch the
Plaintiff by surprise or prejudice it in any way since the key
witnesses were shown the Copyrighted Works in exhibits P138,
P139, P140, D258 and D261 and their attention was drawn to
the relevant pages where they were asked to make comparisons.
Since these comparisons involve diagrams, drawings and
photographs, the Plaintiff knew that the case presented by the
Defendant encompasses artistic work and the Defendant ’s web
pages. The Plaintiff was not prejudiced, surprise d or misled as
Ms. Manjit was clearly prepared throughout the trial and ably
conducted grueling questioning of the witnesses and had every
opportunity of presenting the Plaintiff’s case.
[218] Besides, the issue of whether the Copyrighted Work is “artistic

work” or “literary work” within the meaning of s. 3 CA 1987 is
a question of law. In the upshot, this is an apt case for the Court
to hold that the technicality of pleadings ought not to be made
an instrument of the Plaintiff to prevent a determination of the
substantive issues between the parties.
[219] If I am found to be in error on this issue regarding pleadings –
(a) the Defendant is still able to rely on the Copyrighted

Works in exhibits P139, P140 and D262 which do not
comprise the web pages;
(b) the word “includes” in the definition of “literary work” in

s. 3 CA 1987 denotes that the works enumerated are
164
illustrative and not exclusive or exhaustive. The term

“literary work” covers a wide range of works regardless of
literary merit or quality and circuit diagrams have been
held to be protected as literary work (see Khaw On
Copyright Law In Malaysia, Fourth Edition, Lexis Nexis,
2017 by Khaw Lake Tee and Tay Pek San at pp 86 - 87 and
footnote 15 where the cases of Anacon Corporation Ltd &
Anor v. Environmental Research Technology Ltd & Anor
[1994] FSR 659 and Real Electronics Industries Singapore
(Pte) Ltd v. Nimrod Engineering Pte Ltd (T Vimalanathan,
third party) [1996] 1 SLR 336 are referred). The width of
coverage is reflected by the words “other writings” in limb
(a) of the definition. The fact that the Copyrighted Works
in exhibits P139, P140 and D261 contain information in
writing which can be read by a person or persons is
incontrovertible; and
(c) limb (g) of the definition of “literary work” in s. 3 CA

1987 covers “tables or compilations, whether or not
expressed in words, figures or symbols and whether or not
in a visible form”. The Copyrighted Works in exhibits
P139, P140 and D261 are compilations expressed in
words, figures or symbols apart from diagrams, drawings,
photographs and screenshots and thus, would fall under the
said limb.
- Ownership of copyright
[220] The action that can be brought by an owner of copyrigh t and the
reliefs available are provided under sub -s. 37(1) CA 1987 which
reads:
“37. (1) Infringements of copyrights and the prohibited
165
acts under sections 36A and 36B shall be actionable at the

suit of the owner of the copyright and, in any action for
such an infringement or prohibited act, the court may
grant the following types of relief:
(a) an order for injunction;
(b) damages;
(c) an account of profits;
(d) statutory damages of not more than twenty-five

thousand ringgit for each work, but not more than
five hundred thousand ringgit in the aggregate; or
(e) any other order as the court deems fit.”.
[221] For the purpose of s. 37 CA 1987, “owner of the copyright”

means the first owner or an assignee of the relevant part of the
copyright (see sub- s. 37(11) CA 1987).
[222] The Plaintiff contended that based on the above provision, only
an owner can launch a suit for copyright infringement and since
the Defendant is not the owner of the presentation slides, the
Defendant cannot claim copyright in respect of the same and
bring this suit to the court.
[223] The issue as to whether the Defendant is the owner of the

copyright has to be analysed in relation to the following:
(a) The Defendant’s webpages and presentation on the

company and PDT (exhibits P138, D258 and D261)
Hazim and Datuk Fariz had mentioned the Defendant ’s

webpages during their evidence. Zelim had testified that
exhibits P138 and D258 show the Defendant’s website (see
166
NoE, Vol. 16 on 9.1.2020 at p 16). Exhibit P138 is the

section titled “Phonon Diagnostics” and it seeks to explain
about PDT in writings, diagrams, drawings, photographs
and screenshots on the materials particularly, the alternate
diagrams of phonon pipeline system diagnostics, phonon
diagnostics in linear location mode for submerged
pipelines; and phonon diagnostics of pipeline systems,
submerged crossing, tanks, tank structures, spherical tanks,
pressure vessels, wellhead equipment, PK-14 boiler, RZ-
H-07 reformer, chimney stacks and railway transport
rolling stock. Exhibit D258 is also about “Phonon
Diagnostics” and the materials. The fact that the
Defendant is the owner of the copyright in these webpages
was not disputed by the Plaintiff since its bone of
contention is that the information therein is easily
available.
During the cross-examination by Ms. Manjit, Zelim had

testified that all the pages of the presentation in exhibit
D261 belongs to the Defendant and this was accepted by
learned counsel (see NoE, Vol. 14 on 18.11.2019 at pp 34 -
35).
The Defendant’s name and logo can clearly be seen on all

three exhibits where in exhibit D261, these are found at
the bottom of each slide (see pp 495 - 504, 506 - 509, 512
- 514, 516 - 523 and 525, C4 including the cover page at p
494 which states that all the slides are “SPC Diatech LLC
Company Presentation”).
Based on the oral and documentary evidence, the Court is

satisfied that the Defendant has established that it is the
author and owner of the copyright in thes e exhibits.
167
(b) The Defendant’s technical information in the presentation

slides (exhibits P139 and P140)
Zelim had given evidence that all information on PDT in

the presentation slides marked as exhibits P139 and P140
(‘said Slides’) originated from the Defendant (see NoE,
Vol. 12 on 17.10.2019 at p 95). The Defendant asserted
that as a result of the Plaintiff’s obligation to promote PDT
under the Agency Agreement, the Defendant had provided
the Plaintiff with information regarding PDT to enable the
Plaintiff to produce the said Slides to market PDT.
Ms. Cindy submitted that, as the Plaintiff ’s principal, the

Defendant is the ultimate owner of the copyright subsisting
in the said Slides by reason of the following:
• the Defendant is the equitable owner of the said

Slides;
• any rights that the Plaintiff may have in preparing

the said Slides have been assigned to the Defendant;
and
• the Plaintiff has prepared the said Slides as an agent

of the Defendant.
(i) Equitable ownership & the principal – agent

relationship
The Defendant contended that it is the equitable

owner of the said Slides because they were prepared
during the period when the Plaintiff was the
Defendant’s exclusive agent and solely for the
purpose of marketing PDT pursuant to the Agency
Agreement. As consideration for the Plaintiff’s
168
preparation of the marketing materials, the Plaintiff

obtained the benefit of being the exclusive agent for
PDT in numerous jurisdictions. Neither party could
have contemplated that the Plaintiff would have any
genuine use for the said Slides themselves. Thus, the
Defendant is said to be the equitable owner of the
work in the said Slides.
Ms. Cindy went on to submit that in view of Zelim ’s

testimony as above mentioned, the Plaintiff ’s
presentations slides were derivative from the pre -
existing work and information of the Defendant. This
is evident from the fact that certain diagrams in the
said Slides were taken from the Defendant ’s PDT
software because the Cyrillic alphabet can be seen
and are in the same format as the screenshot from the
Defendant’s PDT software.
The Plaintiff vigorously opposed the Defendant ’s

contentions on several grounds as set out below:
(A) The Defendant’s stance that the Plaintiff’s

presentation in exhibits P139 and P140 is the
Defendant’s copyrighted work is a radical departure
from the pleaded case which is the Defendant ’s
copyright subsists in the Defendant’s works that it
had created. This ground can immediately be
dismissed as being completely unfounded by
reference to paras 15, 16, 17 and 52 of the Statement
of Defence and Counterclaim. This also concurrently
debunks the Plaintiff’s contention that the
Defendant’s works were created by the Defendant’s
employees in Russia and hence, is not eligible for
169
copyright in view of sub-s. 10(3) CA 1987 which

provides that “Notwithstanding subsection (1) and
(2), copyright shall subsist, subject to this Act, in
every work eligible for copyright if the work is made
in Malaysia.”. Under sub-s. 10(3), copyright may
subsist in a work that is made ie, created or reduced
into writing or some other material form, in
Malaysia.
A work first published in Malaysia is entitled to

copyright in Malaysia irrespective of whether the
author is a qualified person viz. a citizen or a
permanent resident of Malaysia or a body established
in Malaysia and constituted or vested with a legal
personality (see s. 3 CA 1987), or not [see Khaw on
Copyright Law in Malaysia (supra at pp 57, 65 -
66)]. The said Slides were put together by the
Plaintiff in Malaysia upon its appointment as the
Defendant’s agent. Hence the said Slides are eligible
for copyright under CA 1987.
(B) Datuk Fariz had testified that he gathered the

information to create the said Slides from the
Defendant’s website (exhibit P138) and Skypearl’s
and Calidad’s presentation slides on PDT (exhibits
P136 and P137). Hazim’s evidence was that the
information used to create the said Slides is easily
available in the market and from the internet as can
be seen in the web printout of Shanghai Daodun
(exhibit 141) which contains identical information on
PDT. This evidence is consistent with the Plaintiff ’s
pleadings in para 25.2 of the Reply to Statement of
Defence and Defence to Counterclaim. In short, the
170
Plaintiff contends that it is the author of the said

Slides and had independently produced the same
based on material which were already and easily
available. It was additionally argued that the Plaintiff
was not commissioned by the Defendant to create the
said Slides and so the question of transfer of
ownership does not arise (see s. 26 CA 1987).
In finding the answer to the conundrum surrounding

the issue of the author, owner and maker of the said
Slides, I was very much assisted by the elucidation in
Khaw on Copyright Law in Malaysia (supra, at pp
161 - 164 and 171 - 172) which can be summarised
as follows:
▪ The author is the creator or originator of the

works and is generally, the first owner of the
copyright but he may not always remain so for
the duration of the copyright. Where literary
works are concerned, the author is the writer or
maker of the works.
▪ The owner is the person who has put in

sufficient skill and effort of his own to produce
an original work and is thereby entitled to
control the doing of the various restricted acts.
▪ The maker is the person who first reduced the

work into material form or who completed the
work.
The Plaintiff alleged that it is the author of the said

Slides because it created or made the same. Whilst
this may appear to be correct at first blush, the
171
Plaintiff has side-stepped several unassailable facts,

namely that –
(I) the said Slides are on PDT and were prepared

by the Plaintiff as the Defendant’s agent in line
with the Plaintiff’s obligation to promote and
sell PTD in Malaysia pursuant to the Agency
Agreement;
(II) the Plaintiff has no knowledge about the

technical aspects of PDT and had sourced the
information for the said Slides from the
Defendant’s webpages. The indicia of copyright
“©Diatech, 2013” on the webpage as a form of
notification to the public of a claim to
copyright is visible (see exhibits P138 and
D258);
(III) sufficient effort has been expended by the

Defendant to make the technical information
original in character. Para 7(3)(a) CA 1987
provides, among others, that a literary work
shall not be eligible for copyright unless
significant effort has been expended to make
the work original in character. Originality in
the context of copyright does not mean that the
work must be in an original or novel form. The
originality required relates to the expression of
the thought. The work must not be copied from
another work and a sufficient amount of the
work must originate from the author
independently (see the Federal Court decision
in Dura-mine Sdn Bhd v. Elster Metering
172
Limited & Anor [2015] 3 MLJ 1). In this

regard, Zelim had said that the Defendant is the
only company in the world which has phonon
technology in industrial diagnostics and the
details of PDT are only known, and is owned,
by the Defendant; and
(IV) the technical information on PDT have been

written, recorded or otherwise reduced to
“material form” as defined in para 7(3)(b) CA
1987.
In view of the above, the Defendant’s submissions

that the Defendant is the ultimate copyright owner of
the said Slides by virtue of the fiduciary relationship
between the Defendant and the Plaintiff as principal
and agent, respectively, is on solid ground. To
support her argument that the Plaintiff holds the
copyright to the said Slides in trust for the
Defendant, Ms. Cindy cited the High Court decision
in Juris Technologies Sdn Bhd & Anor v. Foo Tiang
Sin & Ors [2020] MLJU 157 where Wong Kian
Kheong J held that all six defendants were
constructive trustees of the 1 st plaintiff’s confidential
information. In deciding to grant a Judicial
Assignment, His Lordship referred to the case of
Vitof Ltd v. Altoft [2006] EWHC 1678 where the
following excerpt from para 5-176 in Copinger &
Skone James on Copyright (15 th ed) was quoted:
“Where the work is created by someone who stands

in a fiduciary relationship with another, such that he
cannot be heard to say that he created the work for
173
his own benefit, he will usually hold the copyright in

trust for that other person.”.
In this case, I have no hesitation in making a finding

that the Plaintiff holds the copyright to the said
Slides in trust for the Defendant. It would be
repugnant to all notions of fairness and justice if the
Plaintiff is to be allowed to turn the tables and claim
that it created the said Slides for its own benefit and
is the author, maker and owner of the copyright to
the same.
Apart from the above, the Plaintiff cannot maintain

its own title as the true owner of the copyright
against the Defendant since an agent cannot acquire
title against the principal. In Halsbury’s Laws of
England, Fourth Edition Reissue, Volume 1(2), this
trite legal principle is explicated in these words:
“An agent in possession of property as agent

will not be permitted to deny that his
possession is that of his principal. He is
therefore estopped from setting up a statutory
title against the principal, or maintaining his
own title as the true owner against the
statutory title acquired by his principal through
him.…”.
Therefore, it does not lie in the mouth of the Plaintiff

to say that it is not liable for copyright infringement
when, no matter how one looks at it, the ultimate
owner of the copyright in the PDT technical
information as contained in the said Slides is the
Defendant.
174
It is opportune to mention at this juncture that the

Plaintiff had also submitted that the Defendant has
failed to file any affidavit or statutory declaration
under sub-s. 42(2) CA1987 claiming to be the owner
of the copyright work for copyright protection. This
submission is entirely misplaced as s . 42 merely
provides that a person claiming to be the owner of
the copyright in a work, or any person on his behalf,
may attach a certified extract of the Register of
Copyright referred to under s. 26B, or may make an
affidavit or statutory declaration, with a true copy of
the work annexed to it, as evidence that at the time
specified, copyright subsists in the work and he is the
owner of the copyright. In Dura-mine’s case (supra),
the Federal Court observed that s. 42 provides a
means but not the only means of proving copyright.
A person claiming copyright could adduce oral

evidence and tender other evidence, as what Zelim
had done, to proof the claim for copyright.
Interestingly for present purposes, the Federal Court
agreed that oral evidence, being open to cross -
examination, is of higher evidential value than an
affidavit or statutory declaration [see Khaw on
Copyright Law in Malaysia (supra at pp 71 - 73)].
(C)- The proposition that the Defendant is the equitable

owner of the said Slides is not based on Malaysian
law but on English law which is merely persuasive.
Moreover, under sub-s. 37(1) CA 1987, an equitable
owner cannot maintain a suit for copyright
infringement unless the actual owner is joined as a
party to the proceedings.
175
The case relied upon by Ms. Cindy in advocating that

the Defendant is the equitable owner of the said
Slides is A & M Recording Limited And Another v.
Video Collection International Limited [1995]
E.M.L.R. 25 (see too, a summary of the facts of the
case in Khaw on Copyright Law in Malaysia, supra at
p 168) and in particular the excerpt from the
judgment of Sir Mervyn Davies in the High Court of
Justice Chancery Division as quoted below:
“When A makes or creates a work for B and A

becomes at law the owner of the copyright in
the work, B will sometimes be regarded as the
equitable owner of the copyright and entitled to
have an assignment made in his favour by A. B
will be so regarded when it is a necessary
implication from the facts of the case that
copyright should belong to B; see Copinger,
13 th edition, page 96, and Massine v. De Basil
(1936-45) Macgillivray’s Copyright Cases,
223.”.
However, following from the findings and conclusion

of the Court on the Defendant’s alternative argument
premised on the law of agency, there is no necessity
for the Court to make a determination on the
submission as regards the Defendant’s purported
equitable ownership of the said Slides.
(ii) Assignment of rights
Similarly, the need for a verdict as to the Defendant ’s

submission based on the authorities of Ray v. Classic FM
Plc [1998] All ER (D) 105 and Bio Pure Technology Ltd v.
176
Jarzon Plastics Ltd & Anthony Elliott [2005] Lexis

Citation 3643 that an assignment of all rights in the said
Slides to the Defendant has to be implied into the Agency
Agreement does not arise in view of the acceptance by the
Court of the Defendant’s alternate contention founded on
the fiduciary relationship between the parties. Such an
assignment, if there is found to be one, must inevitably be
an oral assignment and will make the Defendant the
equitable owner of the copyright to the said Slides. As the
equitable owner, the Defendant would not be entitled to
the reliefs available to the legal owner as prescribed under
s. 37 CA 1987, with the exception of an application for an
interlocutory injunction, unless the Plaintiff is joined as a
party to the proceedings [see Khaw on Copyright Law in
Malaysia (supra at pp 189 - 190)].
- Infringement of copyright
[224] Sub-s. 13(1) CA 1987 provides, inter alia, that copyright in a

literary, artistic or derivative work shall be the exclusive right
to control in Malaysia, the reproduction in any material form of
the whole work or a substantial part thereof, either in its original
or derivative form.
[225] The Defendant in this case alleged that there i s a direct, as

opposed to an indirect, infringement of copyright by the
reproduction of a substantial part of the Copyrighted Work in
the Infringed Works. Direct infringement occurs when any of the
activities under the exclusive control of the copyright ow ner are
conducted without his licence or consent (see sub-s. 36(1) CA
1987). The Defendant bears the burden of proving on a balance
177
of probabilities that infringement has occurred [see Khaw on

Copyright Law in Malaysia (supra at p 205)].
[226] In Francis Day & Hunter Ltd. And Another v. Bron And Another
[1963] 1 Ch. 587 at 618, Upjohn LJ expounded the two-step
process in determining whether there is copying, which is a
requirement for purposes of direct infringement, in these words:
“… The first stage is objective, and the second stage

subjective. The first question is whether in fact the alleged
infringing work … is similar to the work of the original
author
... Is it then proper to draw the inference that the

defendant’s work may have been copied from the plaintiffs’
work? This is purely an objective question of fact …
The next stage is the subjective stage and is equally a

question of fact, though … the degree of similarity is most
important in reaching this subjective conclusion. The
question … is: has the defendant copied the plaintiff’s
work, or is it an independent work of his own? ”.
[227] Diplock L.J. in the same case said that “… it is well established
that to constitute infringement of copyright in any literary, …
work, there must be present two elements: first, there must be
sufficient objective similarity between the infringing work and
the copyright work, or a substantial part thereof, for the former
to be properly described, not necessarily as identical with, but
as a reproduction or adaptation of the latter; secondly, the
copyright work must be the source from which the infringing
work is derived.”.
178
[228] The issue as to whether a substantial part of the work in

question has been copied is a matter of fact and degree and
depends more on the quality or substantial significance rather
than the quantity or physical amount of what had been taken or
copied (see the House of Lords decision in Ladbroke (Football)
Ltd v. William Hill (Football) Ltd [1964] 1 All ER 465).
[229] The Defendant sought to prove that there was copying by the
Plaintiff by showing substantial objective similarities between
the Copyrighted Work and Infringed Works. Similar elements in
the writings, diagrams, drawings, photographs and screenshots
from the relevant pages of the Copyrighted Work and Infringed
Works were conveniently re-produced in tables in subparas 37.1,
38.1 - 38.3, 48.1 - 48.31 of the Defendant’s Written Submission
(Vol. 2: Defendant’s Counterclaim).
[230] I have visually compared the Copyrighted Work and Infringed

Works and I find that not only is there a high degree of
similarity in the slides, but some slides are in fact exa ctly the
same, for example, the ones at p 500, C4 (exhibit D261) and p
471, C4 (exhibit D64); p 4328, B29 (exhibit P139) and p 444,
C4 (exhibit D189); and p 4329, B29 (exhibit P139) and p 445,
C4 (exhibit D189). As submitted by the Defendant’s counsel, the
copying is so blatant that the Cyrillic alphabet for PDT materials
can be seen in some of the HATs materials in the Infringing
Works (for example, see subparas 48.14, 48.17, 48.29 and 48.31
in the Defendant’s Written Submission) and there is also
reference to “phonon transducers” in the Infringing Works (see
subparas 48.13 and 48.28 in the same Submission).
[231] In their evidence, Hazim (see NoE, Vol. 4 on 14.2.2019 at pp 9 -

14, 19 - 24, 27 - 33 and 42) and Datuk Fariz (see NoE, Vol. 6 on
22.3.2019 at pp 14 - 17) themselves acknowledged that some
179
pages in the slides on PDT and the ones on HATs “look alike” or
are similar. In respect of the wordings/ information, diagrams
and contents in some of the slides, Hazim agreed with Ms.
Cindy’s suggestions that they are identical.
[232] It is, of course, open to the Plaintiff to argue that there are
differences between the Copyrighted Work and Infringed Works
which indicate independent creation or other sources in respect
of the latter such that any inference of co pying is rebutted. In
her submission for the Plaintiff, Ms. Manjit pointed out that
there are differences in the screenshots at p 8127, B54 (exhibit
D258) with the ones at pp 8133 and 8135, B54 (exhibit D196).
However, exhibit D196 is not among the Infringing Works
which are relied upon by the Defendant. As for Hazim ’s
evidence that the presentation slides and promotional materials
for HATs are completely different from the ones used for PDT,
the Court agrees with the Defendant that the testimony of a
single partisan witness cannot hold water against the Plaintiff ’s
witnesses’ admissions and the contemporaneous documentary
evidence which tend to support that there are similarities in the
Infringed Copyright and the Infringing Works. Moreover, the
use of even a small portion of an author’s work is sufficient, if it
is used in a work which competes with the author ’s work (see
para 520.092 of Halsbury’s Laws of Malaysia – Intellectual
Property). In the instant case, HATs is a technology which is
competing directly with PDT but the similarities are sufficiently
numerous to support an inference of copying.
[233] Following from the above analysis, this Court is satisfied that
the Defendant has proven sufficient objective similarity in a
substantial part of the Infringed Copyright. A prima facie
presumption of copying by the Plaintiff arises and the burden is
shifted to it to rebut the causal connection. Failure to do so
180
means that the Infringing Works must have been copied from the
Copyrighted Works (see Megnaway Enterprise, supra at p 537).
[234] The matters raised by the Plaintiff in attempting to rebut the

said presumption (which have not been dealt with under the
foregoing parts of this judgment since there is an overlapping of
issues in the Defendant’s submissions) and the findings of the
Court are set out below:
(a) Hazim’s evidence that the slides in exhibits D64, D65,

D189, D192 and D193 are not the Plaintiff’s presentations
and the absence of any proof on details of the
presentations and attendees. Hazim testified that the
Plaintiff’s actual HATs presentation is at pp 3766 - 3802,
B25 (exhibit P142) and that he did not present the slide on
HATs at p 471, C4 (exhibit D64).
(b) PTD and HATs are diagnostic and inspection technologies

which are provided to the oil and gas industry with similar
benefits, advantages and limitations. Hence, owing to their
common features, similarities are unavoidable and even if
there are any, they ought to be disregarded as they relate to
features that are commonplace and on gener al physics.
– In respect of subparas (a) and (b) above, The Court

has earlier ruled that the Plaintiff used “phonon” to
mislead customers as to the inspections which were
performed; merely changed the reference to the
diagnostic method from PTD to HATs as evident
from the Infringing Works; and leeched on PDT to
promote HATs. In view of these findings, HATs as
the so-called diagnostic inspection technology
invented by Hazim is totally discredited. In addition,
Hazim’s credibility as a truthful witness is very much
181
in doubt as discussed in the preceding part of this

judgment. In contrast, Syafiq had testified that he
had seen exhibit D64 in 2016 at the Plaintiff’s office.
This would support the Defendant’s stance that the
said presentation slides originated from the Plaintiff.
(c) The Defendant has failed to produce the original work

from which the Infringing Works were purportedly copied
from and so, it is not possible for the Court to undertake
the comparison in determining whether there is objective
similarity between the Copyrighted Works and the
Infringing Works.
– The Defendant’s submission is erroneous since the

Infringing Works may be made from the original or
from a copy or a reproduction of the original.
(d) There is no evidence before the Court that the Defendant

had passed any information pertaining to PDT to the
Plaintiff to establish causal connection.
– The Court takes the view that in so far as Hazim’s

and Datuk Fariz’s admission in court that they had
relied on information available from the Defendant ’s
website, there is thus no need for the Defendant to
show that information on PDT had been “passed” by
the Defendant to the Plaintiff. With regards to
exhibits P139, P140 and D261, Zelim’s account on
these has been discussed earlier.
(e) The Defendant ought to have produced an expert opinion

to guide the Court since the counterclaim for copyright
infringement is based on technology which is scientific in
nature.
182
– The Court finds that there is no necessity for such

expert opinion as the case authorities cited have
clearly held that proof of objective similarities
require a visual comparison to be done by the Court
to detect the similarities and differences between the
Copyrighted Works and the Infringing Works. The
Court is able to do so without the need for any expert
opinion.
(f) The diagrams, photographs and screenshots in question

show the method of operation, procedure and mathematical
expression which are not protected under sub-s. 7(2A) CA
1987.
– In my opinion, the diagrams, photographs and

screenshots must be seen and read together with the
writings and drawings in the Copyrighted Works
which goes to show that the work has transposed
beyond a mere idea. The basic concepts have been
detailed and transformed into concrete or tangible
form as evident from exhibits D258 and D261 and
thus are protectable elements under the law.
(g) In so far as the buntings, banners and brochures for the

event at Saudi Arabia are concerned, these were prepared
by Bisco who had mistakenly mixed up the PTD materials
with the HATs materials. Hazim had instructed Bisco to
remove the buntings etc. and Bisco had done so. The
Plaintiff cannot be held liable for infringement of
copyright of material prepared by a third party.
– It has earlier been alluded to that the Defendant did

not appoint the Plaintiff as an agent to promote PDT
in Saudi Arabia and the Defendant has no knowledge
183
about Bisco. Thus, the only logical conclusion is that

it was the Plaintiff who provided the materials to
Bisco. The Plaintiff did not call anyone from Bisco
to support its version of the facts. The Court holds
that the Plaintiff has not discharged the burden of
proving the facts as it has claimed in court (see s .
103 of the EA 1950).
(h) Even if there is copying, it was done unconsciously and

was inevitable.
– The short answer to this contention is that there is no

requirement to prove that the Plaintiff intends to
infringe or has knowledge that it is infringing a
work. This is a case involving textual copyin g and
deliberate substitution of the word “PDT” with
“HATs” in the presentation slides (and as seen
earlier, in the reports on the diagnostic inspections
performed for the Plaintiff’s clients). It is highly
implausible for the Plaintiff to have copied the
Copyrighted Works involuntarily.
[235] To sum up, proof of sufficient similarities and causal connection

gives rise to an inference of copying, which the Plaintiff must
rebut. Since this Court disbelieves the explanation offered, and
rejects the arguments raised, by the Plaintiff, the irresistible
conclusion is that a substantial part of the Copyrighted Work has
been infringed.
Issue 10: Whether the Plaintiff had committed breach of

confidential information pertaining to the Defendant ’s documents
and confidential information?
184
- The Defendant’s pleaded case
[236] The Plaintiff once again raised the issue of the Defendant ’s
pleadings, this time in respect of the alleged failure to clearly
identify the information alleged to have been imparted in
confidence and to have been misused by the Plaintiff. Ms.
Manjit cited a host of cases such as Ganesh Raja a/l Nagaiah &
Ors v. NR Rubber Industries Sdn Bhd [2017] 2 MLJ 396; China
Road & Bridge Corp & Anor v. DCX Technologies Sdn Bhd and
another appeal [2014] 5 MLJ 1 and Dynacast (Melaka) Sdn Bhd
& Ors v. Vision Cast Sdn Bhd & Anor [2016] 3 MLJ 417 in
submitting that the information in question must be stated with
specificity and not merely on global terms as seen in para 15 of
the Statement of Defence and Counterclaim and para 18 of the
Reply To Defence To Counterclaim.
[237] Para 15 of the Statement of Defence and Counterclaim was

quoted in para 51 above. Para 18 of the Reply To Defence To
Counterclaim (with my added emphasis) is as follows:
“18. In response to paragraph 21 of the DTC, the

Defendant states that the Plaintiff had obtained the
Defendant’s confidential information either from the
Defendant itself or through its representatives
including but not limited to the technical
information on PDT and PDT’s equipment such as
its explanation, diagram, drawings, methodology ,
etc.”.
[238] Having read the pleadings several times, I am of the considered

opinion that sufficient particulars have been given on the
alleged misappropriated confidential information in paras 15 and
52 of the Statement of Defence and Counterclaim read together
185
with para 18 of the Reply To Defence To Counterclaim. The

Plaintiff responded in para 25 of its Defence to Counterclaim by
denying the Defendant’s averments in para 15 of the Statement
of Defence and Counterclaim, and in para 25.1 by stating that
“Plaintif menegaskan bahawa Defendan tidak pernah
membekalkan Plaintif dengan sebarang maklumat dan dokumen
sulit berkaitan dengan teknologi PDT yang eksklusif kepada
Defendan dan tidak didapati dalam domain awam. Defendan
diletakkan di atas beban bukti yang kukuh bahawa maklumat
dan dokumen sulit telah diberikan oleh Defendan kepada
Plaintif.”.
[239] This shows that the Plaintiff understood the confidential

information pleaded by the Defendant and further supported by
the fact that the Plaintiff did not file any application to seek
further and better particulars.
[240] To avoid repetition of the analysis concerning pleadings under

Issue 9 on Copyright, suffice for me to say that the findings
thereunder are equally applicable here in that the evidence
adduced during the trial is more than sufficient to cure any
alleged defects in the Defendant’s pleadings [refer paras 22 of
the Defendant’s Written Reply Submission (Reply To Vol. 4:
Counterclaim) where learned counsel had tabulated the identity
of the confidential information, namely the methodology of PDT
in Procedure 2005, the Mathematical Formula and PDT
Software, which produced the diagrams or screenshots (technical
information of the PTD equipment) (see too, para 245 below),
and the evidence as to the nature of the confidential
information]. The Plaintiff was not prejudiced or taken by
surprise by the Defendant’s pleadings. Ultimately, the pleadings
should not become a tool to shut out substantive justice on
merits.
186
- The general principles
[241] The duty of confidence is expressed in Clerk & Lindsell On

Torts, Eighteenth Edition, Sweet & Maxwell, 2000 at p 1517 in
these terms:
“… a duty of confidence arises when confidential

information comes to the knowledge of a person, in
circumstances where he has notice, or is h eld to have
agreed that the information is confidential, with the effect
that it would be just in all circumstances that he should be
precluded from disclosing the information to others. ”
[see too, para 380.571 in Halsbury’s Laws of Malaysia –

Tort (Vol. 13(2)].
[242] Lord Nicholls of Birkenhead in Campbell v. MGN Ltd [2004] 2

AC 457 elucidated on this cause of action at pp 464 - 465 as
follows (with my added emphasis):
“13 The common law or, more precisely, courts of equity

have long afforded protection to the wrongful use of
private information by means of the cause of action which
became known as breach of confidence. A breach of
confidence was restrained as a form of unconscionable
conduct, akin to a breach of trust. Today this
nomenclature is misleading. The breach of confidence
label harks back to the time when the cause of action was
based on improper use of information disclosed by one
person to another in confidence. To attract protection the
information had to be of a confidential nature. But the gist
of the cause of action was that information of this
character had been disclosed by one person to another in
circumstances “importing an obligation of confidence”
187
even though no contract of non-disclosure existed: see the

classic exposition by Megarry J in Coco v. A N Clark
(Engineers) Ltd [1969] RPC 41, 47-48. The confidence
referred to in the phrase “breach of confidence” was the
confidence arising out of a confidential relationship.
14 This cause of action has now firmly shaken off the

limiting constraint of the need for an initial confidential
relationship. In doing so it has changed its nature. In this
country this development was recognised clearly in the
judgment of Lord Goff of Chieveley in Attorney General v.
Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 281.
Now the law imposes a “duty of confidence” whenever a
person receives information he knows or ought to know is
fairly and reasonably to be regarded as confidential . Even
this formulation is awkward. The continuing use of the
phrase “duty of confidence” and the description of the
information as “confidential” is not altogether
comfortable. Information about an individual ’s private life
would not, in ordinary usage, be called “confidential”.
The more natural description today is that such
information is private. The essence of the tort is better
encapsulated now as misuse of private information .”.
[243] In the case which was mentioned in the above quotation namely,
Coco v. A. N. Clark (Engineers) Ltd. [1969] RPC 41, the three
elements which are normally required for a cause of action for
breach of confidence were succinctly stated as that –
(a) the information must have the necessary quality of

confidence about it;
(b) the information must have been imparted in circumstances

importing an obligation of confidence; and
188
(c) there must be an unauthorised use of the information to the

detriment of the party communicating it.
[244] I shall now examine each of the abovementioned elements to

determine whether the Defendant has successfully established its
counterclaim premised on this cause of action.
- Is the information confidential in nature?
[245] The Defendant submitted that based on the evidence given by

Ilia and Zelim, technical information on PDT comprising of its
explanation, diagrams, drawings and methodology had been
disclosed to the Plaintiff and in particular –
(a) the Defendant’s internal document that describes the step

by step procedure on how PDT is to be carried out titled
“Procedure of Instrumental Phonon Diagnostics of
Pipelines” (‘PDT Procedure 2005’);
(b) the mathematical formula invented by the Defendant and is

used to identify phonon defects (‘Mathematical
Formula’); and
(c) screenshots of the Defendant’s software which can only be

used by the Defendant in doing diagnostic work (‘PDT
Software’).
[246] It was contended that the PDT Procedure 2005, Mathematical

Formula and PDT Software are Confidential Information
belonging to the Defendant because the information –
(a) records, inter alia, the data processing, analysis,

procedure, algorithm and formula pertaining to PDT; and
189
(b) is the Defendant’s invention and pertain to the technology

invented by the Defendant. The Defendant as the maker of
the Confidential Information has used its “brain” and
produced a result which can only be produced by
somebody who goes through the same process (with
reference to the case of Regent Decorators (M) Sdn. Bhd.
& Anor. v. Michael Chee & Ors. [1984] 2 MLJ 78 and
Saltman Engineering Co., Ltd. And Others v. Campbell
Engineering Co., Ltd. [1963] 65 RPC 203).
[247] The Plaintiff retorted that the Defendant has not proven that the
Confidential Information is confidential in nature for the
following reasons:
(a) PDT Procedure 2005
Ms. Manjit submitted, and as confirmed by Zelim himself,

that only the title or name of the document viz “Procedure
of Instrumental Phonon Diagnostic of Pipelines ” is
mentioned in the PL 106 Report and Slug Catchers Report
and not the contents and nor was a copy of the document
attached to these reports. Further, no evidence was
adduced to show that a working group as mentioned by
Zelim in his evidence was established to produce the said
document and that it had expended effort and money in
developing the same. Zelim could only recall two people
who supposedly authored the PDT Procedure 2005 ie, Oleg
Strobykim and Andrey Konyrev but there was no evidence
as to whether they had the necessary qualification for the
job. They were not called as witnesses even though they
are still in the Defendant’s employment. Prof. Vladimir,
whom Hazim and Zelim said had invented PDT, was not
named as one of the members of the working group. The
190
best person to testify on the nature and purported

confidentiality of PDT Procedure 2005 would be Prof.
Vladimir.
(b) Mathematical Formula
Apart from repeating its submission pertaining to the

working group and non-calling of Prof. Vladimir, Oleg
Strobykim and Andrey Konyrev as witnesses, the
Plaintiff’s complaint is that Zelim was unable to answer
questions on whether the mathematical formula is taught to
the expert diagnosticians during the PDT training, how the
formula is utilised for purposes of reporting a phonon
active area and whether PDT software is required.
Although Zelim said the best person to testify on these
matters would be the Defendant’s technical specialist on
phonon diagnostics, no such person was called as a
witness.
(c) PDT Software
The same points of contention as set out in subpara (b)

above were raised by the Plaintiff.
[248] I have perused the pages in the reports which contain references
to the PDT Procedure 2005 and the Mathematical Formula as
well as the screenshots of the PDT Software and it is my finding
(using the PL 106 as an example) that –
(a) the para where the PDT Procedure 2005 (at p 2930, C25) is
mentioned reads:
“For the purpose of executing work there was used a

technology of phonon diagnostics and monitoring as
a basic one in accordance with Customer’s ASME
191
requirements and normative document “Procedure of

instrumental phonon diagnostics of pipelines”.
Russian Academy of Natural Science, Division
“Diagnostics and safety of technosphere”. Moscow,
2005.”;
(b) the Mathematical Formula is applied to do PDT related

works and in particular, to calculate, inter alia, the
phonon-active area activity coefficient, defect activity
coefficient with account for operating life of equipment,
scaling coefficient, allowable stress and evaluation of
remaining life for pipelines (using the results of phonon
diagnostics, actual data on thickness and break point). The
complexity of the Mathematical Formula is apparent and as
an illustration, the formula to evaluate the remaining l ife
for pipelines is quoted below:
192
(see pp 2946, 2968, 2969 and 2991, C25);
(c) the screenshots of the PDT Software with the Cyrillic

alphabet and the time and date of processing are
introduced by the statement that “Primary results of
phonon monitoring for each 3 section are presented on
phonon calibrations presented in Table 5.2” (see pp 2936 -
2942, C25);
(d) the Confidential Information is evidently complicated,

more sophisticated than a simple formulation, method or
plan and was created especially for the Defendant’s PDT
specialists to perform PDT works;
(e) Hazim in his answer to Question 142 in his Witness

Statement has admitted that information concerning data
processing and algorithm is confidential for technologies
like PDT. The Mathematical Formula and PDT Software is
undoubtedly data processing and algorithm. Having seen
193
these being applied in the projects where PDT was utilised,

the Plaintiff must have known of the confidential nature of
the Confidential Information;
(f) in his evidence, Zelim had explained the confidential

nature of the Confidential Information. Firstly, phonon
diagnostic and monitoring works are carried out according
to the procedure as set out in the PDT Procedure 2005.
Secondly, Zelim when cross- examined, was steadfast that
the Mathematical Formula was created a very long time
ago by a group of specialists in mathematics, diagnostics
and other related areas of specialization employed by the
Defendant. This work was initiated within the Defendant
by the Defendant and the outcome thus belongs to the
Defendant and is applied and utilised by the Defendant.
Thirdly, the screenshots that comes out from the PTD
Software are never identical because they reflect live
monitoring of industrial objects which would differ from
one project to another and from one part to another part of
the same object;
(g) Zelim was also asked about Clause 4 of the Agency

Agreement which reads:
“4. INTELLECTUAL PROPERTY RIGHT (IP)
4.1 Agent hereby agrees to protect and secure

Principal of their Copyright, Patents,
Trademarks, Intellectual Property and Data
Protection against any threat of plagiarism.
4.2 Agent is responsible to protect the Products

against any reverse engineering or
modifications from any part with the intent of
194
reproducing the Products or any other intent.

Any modifications to be made to the product by
Agent shall have written consent from
Principal.”,
to which Zelim opined that “Data Protection” in Clause

4.1 refers to technical information and for the Defendant,
this means confidential information. Hence, under the
Agency Agreement, the Plaintiff is duty -bound to protect
and secure the Defendant’s confidential information;
(h) non-production of the original PDT Procedure 2005 or a

copy of it is not fatal to the Defendant ’s case; and
(i) Zelim’s evidence suffice as proof of the confidential

nature of the Confidential Information. The Plaintiff did
not cite any case authority which has held that only the
author can testify on this aspect. As the Defendant ’s
President since 2009, Zelim is the highest authority in the
company and certainly in the best position to give
evidence pertaining to the Confidential Information. I
agree with the Defendant that in view of the Defendant
being a company based in Moscow, Russia, it would be
impractical and inconvenient to require each employee
who was involved in the creation or invention of the
Confidential Information to travel to Kuala Lumpur,
Malaysia to testify;
[249] In view of all the above, I hold that the Defendant has proven,
on a balance of probabilities, that the Confidential Information
are confidential in nature.
195
- Was the information communicated in circumstances

importing an obligation of confidence?
- Was there an unauthorised use of the information by the

Plaintiff?
[250] The Defendant placed heavy reliance on Zelim’s testimony in

submitting that the Plaintiff had received, misused and disclosed
Confidential Information without the Defendant ’s knowledge
and consent when the Plaintiff secretly employed Alex and
Marina to perform diagnostic works for projects, specifically as
follows:
(a) PDT Procedure 2005
Based on the statements at p 2930, C25 and p 7763, B52 in

the PL 106 Report and the Slug Catchers Report,
respectively, the Defendant contended that the PDT
Procedure 2005 was used for the works carried out by the
Plaintiff for PCSB.
The Plaintiff however argued that Zelim had given

contradictory evidence on the issue as to whether the
Defendant had furnished the PDT Procedure 2005 to the
Plaintiff ie, ranging from there being no handing over of
the document at all, to Zelim himself had transferred the
technical information including the said document to the
Plaintiff, and then saying that someone else had done so
but he did not know the identity of the person.
Moreover, the Technical Report Complete Pipeline

Integrity Study For Cooling Water Underground Pipelines
Petronas Penapisan Melaka (PPM) Sdn Bhd By Means Of
Phonon Diagnostic Technology No. TR-PPM-05-12 for the
196
period April – July 2012 (exhibit P136) which was

prepared by the Defendant’s and Skypearl’s Project Team
consisting of Khosim, Prof. Vladimir, Alex, Marina and
Ashraf Abu Seman (as Project Manager and Coordinator)
had made reference to the PDT Procedure 2005. This, it
was argued, lends credence to the contention that the
Plaintiff obtained the information from Skypearl and not
from the Defendant.
Learned counsel also referred to the Report Studies For

Technology For PL-222R1-R4 6”, 1.62KM Pipeline (From
WLDP-B To WLDP-A) At West Lutong For Petronas
Carigali Sdn Bhd dated 16.1.2014 (exhibit P145; ‘PL-222
Report’) where mention is similarly made of the PDT
Procedure 2005. The Defendant’s conduct of referring to
the said document in the reports that it had prepared for
PDT projects, which would subsequently be given to the
end customers, is said to have resulted in the said
document being placed in the public domain.
(b) Mathematical Formula
The Defendant asserted that the Mathematical Formula was

used in the PL 106 Report and the Report Studies For
Technology For PL-221 6”, 0.5KM and PL-218 6”, 1.1KM
of Pipeline dated 16.1.2014 (exhibit P144; “PL-221 and
PL-218 Report”) as can be seen at, among others, p 2946,
C25 and p 7668, B51.
Ms. Manjit argued that no reliable evidence was adduced

by way of oral or documentary evidence to show that the
Mathematical Formula was furnished to the Plaintiff on the
197
same grounds as the PDT Procedure 2005. The Plaintiff

asserted that the same Mathematical Formula can be found
in the PDT reports prepared by Skypearl (exhibit P136)
and for projects PID0324 (at pp 8421 - 8480, B57) and
PID0089 (at pp 8490 - 8560, B57). Attention was drawn to
Ilia’s testimony that the entire PDT report for PID0089
was prepared by the Defendant. The Mathematical Formula
is thus said to be in the public domain.
(c) PDT Software
The Defendant once again relied on Zelim ’s testimony and

the PL 106 Report at pp 2937 - 2942, C25 and Slug
Catchers Report at pp 7772 - 7796, B52 as evidence that
its PDT Software was used to analyse the data for
diagnostic work. In addition, reference was made to the
PL-221 and PL-218 Report at pp 7660 - 7665, B51 and PL-
222 Report at pp 7708 - 7710, B51).
The Plaintiff responded by relying on the same parts of

Zelim’s evidence which purportedly show a contradiction.
Ms. Manjit further referred to Hazim’s and Datuk Fariz’s
testimony that the PDT equipment were always under the
control of the Defendant’s expert diagnosticians during the
tenure of the Agency Agreement. The screenshots from the
PDT software are alleged to have been provided by the
Defendant’s expert diagnosticians to the Plaintiff for the
purposes of incorporating the same in the technical reports
to be forwarded to customers.
According to the Plaintiff, the PDT screenshots provided

by the Plaintiff is purely to demonstrate the results of
phonon monitoring to the end user. Akin to the earlier
submissions, reference was made to the PL -222 Report and
198
the reports for PID0324 (exhibit D3) and PID0089 (exhibit

P82) and to the fact that similar screenshots can be seen at
the Defendant’s website (exhibits P138 and D258) and in
its company presentation (exhibit D261) to support the
contention that the screenshots of PDT software are in the
public domain.
Ms. Manjit stressed that the Defendant cannot claim that

the Plaintiff had committed breach of confidential
information by incorporating screenshots of PDT software
in PDT reports when the Defendant itself had don e so and
the screenshots incorporated by the Plaintiff in the PDT
reports were provided by the Defendant’s expert
diagnosticians.
As for the argument premised on the allegation that the

Plaintiff’s actual HATs presentation is as per exhibit P142
and not the ones relied upon by the Defendant, this has
been dealt with in relation to the issues on Statements 6
and 7 in the said Letters (see para 90).
[251] Having considered the entire oral and documentary evidence and
submissions by the parties, the following are my findings:
(a) The alleged inconsistencies in Zelim’s evidence as

submitted by Ms. Manjit is partly attributed to the way that
learned counsel had put the questions to the witness during
cross-examination where the same questions were asked in
a different, and at times, rather confusing manner. With
respect, the tendency for learned counsel to be repetitious
and haphazard is exemplified in the written submissions as
well.
Ultimately, the Court accepts Zelim’s clarification during
199
the re- examination, namely that he believes Alex and/ or

Marina, who were both involved in the PL106 and Slug
Catchers projects, had passed the Confidential Information
to the Plaintiff. This would explain how the PT D
Procedure 2005, Mathematical Formula and screen shots of
the PDT Software came to be included in the various
reports as outlined above. I have, in subpara 131(i) above,
given my justifications in concluding that overall, Zelim is
a credible witness.
(b) The Plaintiff has not discharged the evidential burden of

proof that it had received the Confidential Information
from Khosim since Khosim was not called as a witness.
Moreover, even if this allegation is true, the Plaintiff
would still be bound by the duty of confidentiality in the
light of its knowledge about the nature of the Confidential
Information, which the Court has held to be confidential.
(c) The issue relating to the control of the PDT equipment has
been addressed in subpara 70(b) above.
(d) The misuse and disclosure of Confidential Information is

supported by documentary evidence in the form of the
reports as outlined in the preceding paras. Zelim testified
that the reference to the PDT Procedure 2005 in the reports
means that the said document must be in the Plaintiff’s
possession and that it was shared with the customer. This
is because the works concern industrial safety and the
customer would want to know what the procedure for the
works which are to be carried out. In fact, Zelim said that
the customers usually demand for the procedure to
familiarise themselves with it.
200
(e) The irresistible conclusion from the fact that references to

the Mathematical Formula are contained in the reports
leads back to Alex and Marina who, as the Defendant ’s
former phonon specialists, are the only ones that would
know how to apply the Mathematical Formula to achieve
the objectives of the reliability studies and inspection
works.
(f) Zelim also testified that the screenshots in these reports

are indicia that the Plaintiff had used the Defendant’s PDT
Software to analyse data for diagnostic works without
consent from the Defendant. The only logical explanation
as to how the screenshots of the PDT Software could
appear in the reports as aforesaid is that the PDT Soft ware
was used for data processing for those diagnostic work
since the screenshots are unique to the PDT Software
owned by the Defendant and would only appear if the PDT
Software was utilised. In re-examination, Zelim said that
samples of the screenshots can be seen at the Defendant’s
website. However, there is only one PDT software and the
shape, frame or general look of the screenshots will seem
similar on different shots but the reality is that the
contents would be different according to the specific
project. The screenshot of the object that was inspected
and monitored for a project would be confidential.
(g) As regards the Plaintiff’s defence on the ground that the

Confidential Information is in the public domain, it is one
of the factors to be considered in determining whether
there is a duty of confidentiality. Just because the
Confidential Information is publicly accessible and/ or
accessed, this does not ipso facto strip the Confidential
Information of its confidential character. A common sense
201
inquiry based on the circumstances of each case must be

undertaken by the Court in determining whether the
Confidential Information has become so accessible and/ or
accessed that it would not be just to require the Plaintiff to
treat the Confidential Information as confidential (see the
decision of the Singapore Court of Appeal delivered by
Tay Yong Kwang JA in Wee Shuo Woon v. HT SRL [2017]
2 SLR 94 and Creation Records Ltd. and others v. News
Group Newspaper Ltd [1997] Lexis Citation 1633).
In the instant case, the Court is in agreement with the

Defendant’s submission that a common sense inquiry
would lead to the conclusion that the reports as
aforementioned were not disclosed to the world at large
but were for the consumption of the customers as named in
the reports and would remain as internal documents of
these customers. The Confidential Information has not
become so accessible and/ or accessed that it would not be
just to require the Plaintiff to treat the Co nfidential
Information as confidential. To the contrary, the
confidentiality of the Confidential Information is
preserved.
In so far as the Plaintiff’s reliance on the reports for

PID0324 (exhibit D3) and PID0089 (exhibit P82) is
concerned, Zelim has unwaveringly denied that these
reports were prepared by the Defendant. Hence, the
Plaintiff’s argument has been nipped in the bud.
(h) There is no legal requirement that the Confidential

Information must be imparted directly by the Defendant to
the Plaintiff. Even if the Plaintiff received the Confidential
Information as a third party recipient, it would still be
202
bound by the duty of confidentiality because it knows of,

or is willfully blind to, the confidentiality of the
Confidential Information (see Alfa Laval (M) Sdn Bhd v.
Ng Ah Hai & Ors [2008] 5 MLJ 344 and Imerman v.
Tchenguiz & Ors [2010] EWCA Civ 908). Hazim’s
evidence that information on diagnostic technologies is
classified as confidential and the Plaintiff ’s conduct in
keeping the employment of Alex and Marina under wraps
indicate that the Plaintiff is aware of the confidential
nature of the Confidential Information and that the
unauthorised use of the same would be in violation of the
Agency Agreement and may give rise to an action for
breach of confidence.
[252] In the upshot, the weight of the evidence supports a finding in

favor of the Defendant that the Plaintiff had indeed received,
misused and disclosed the Confidential Information without the
Defendant’s consent and thereby committed breach of
confidence.
- Absence of a Non-Disclosure Agreement
[253] Ms. Manjit submitted that the parties did not sign a Non -
Disclosure Agreement (‘NDA’) at the time when any
information and document were provided by the Defendant to
the Plaintiff.
[254] However, it bears repetition that at the material time, the parties
were in a principal – agent relationship. Hence, the Plaintiff, as
an agent of the Defendant, owes a duty of good faith to the
Defendant not to use for purposes other than for the agency, or
to divulge to a third party, information obtained by virtue of the
agency.
203
[255] Para 110.077 in Halsbury’s Laws of Malaysia – Agency, Volume

4 (2013 Reissue) states the following:
“It is the duty of an agent to employ the materials and

information obtained by reason of his agency solely for
the purposes of the agency, and not to use any materials
or information so acquired, whether his agency has come
to an end or not, in any manner inconsistent with good
faith, as by divulging them to third parties, or by using
them himself in unfair competition with his principal. ”.
(emphasis added)
[256] It is therefore crystalline that the factual matrix in this case is

such that the Plaintiff, as the Defendant’s agent, cannot be
allowed to use the absence of a NDA as a reason to deny its duty
of confidence to the Defendant.
Issue 11: Whether the Defendant is entitled to the reliefs sought

under its counterclaim?
[257] Having held that the Defendant has succeeded in proving its
cause of action under the counterclaim for breach of contract,
copyright infringement and breach of confidential information,
it follows that the Defendant is entitled to the reliefs sought
namely, in general, for declarations, perpetual injunctions,
delivery up, an inquiry in respect of general damages and/ or an
account of profits, statutory damages pursuant to para 37(1) (d)
CA 1987, interests and costs.
[258] With regards to prayer (I) in the Counterclaim for additi onal,
exemplary and/ or aggravated damages, the Defendant in its
Written Submission, had urged the Court to award a sum of
RM800,000.00 on the grounds that:
204
(a) the facts of this case fall within the second category of
Rookes v. Barnard [1964] AC 1129 where the Plaintiff’s
conduct was calculated to make a profit for itself and
discloses malice, fraud and insolence such as to merit an
order for exemplary damages to be paid (see Worldwide
Rota Dies Sdn Bhd v. Ronald Ong Cheow Joon [2010] 8
MLJ 297); and
(b) the Plaintiff’s conduct which depict malice and fraud as

borne out by the evidence adduced at the trial are, among
others –
(i) the falsification of the Reference Letter and Ilia’s

Contract For Services;
(ii) misleading customers into thinking that the Plaintiff

is providing PDT services by using the PDT name;
(iii) engaging the Defendant’s former Russian employees

to perform diagnostic services to mislead customer s
into thinking that their diagnostic services were
performed by the Defendant;
(iv) calling the Plaintiff’s employees “Phonon Engineers”

and “Phonon specialists” when these employees have
never been trained by the Defendant at the PDT
Training Centre in Russia;
(v) concocting HATs to mislead customers but utilising

PDT technical information and PDT methodology;
(vi) lying to customers that HATS is an enhanced/

improved version of PDT but yet during the trial,
claiming that PDT and HATs are totally differen t;
205
(vii) continuing to enter into agreements and secret

projects with customers using PDT even after the
termination of the Agency Agreement;
(viii) interfering with Syafiq, the Defendant’s subpoena

witness. On 17.7.2019, Syafiq took the witness stand
for the first time. The second question posed by Ms.
Cindy in the examination-in-chief was whether
anyone from the Plaintiff had contacted him after he
was served the subpoena. According to Syafiq, he
received messages through WhatsApp inquiring
whether he has received the subpoena and if so, to
discuss the matter with the Plaintiff’s lawyer and if
not, then not to accept the subpoena. Ms. Cindy
informed the Court that she will seek the client ’s
instructions as to whether to file contempt
proceedings against Hazim, who presumably is the
person who sent the messages to Syafiq (refer NoE,
Vol. 10 on 17.7.2019 at pp 4 - 6). However, no such
application was filed to date and the Plaintiff made
no protestation as to Syafiq’s evidence on this
serious allegation of an attempt to tamper with a
witness; and
(ix) having a collateral purpose in filing the suit which is

to be on the offensive against the Defendant under
the erroneous assumption that the Defendant will not
come and oppose the suit since it is based in Russia,
and obtaining an ex-parte injunction which was
subsequently set aside for the primary reason of there
being no full and frank disclosure of material facts.
206
[259] The Court had considered all the factors meticulously listed by
the Defendant in its Written Submission and finds that there are
ample grounds to support the Defendant’s case for prayer (I) to
be allowed albeit the quantum of any exemplary and/ or
aggravated damages will be determined at the assessment stage
of the proceedings.
[260] It should be made clear here that following the pronouncement

by the Court of the decision in respect of the Common Issues To
Be Tried (see para 31), learned counsels appearing for the
parties were invited to address the Court on the prayers in the
Counterclaim. Ms. Cindy submitted that the Defendant –
(a) would not be pursuing prayer (F) in the Counterclaim;
(b) reserves its right for each copy of the Infringing Works to
be counted as per the provisions in the CA 1987 during the
assessment of damages;
(c) did not abandon the alternative relief for an account of

profits in prayer (G) in the Counterclaim since the word
“includes” was used in para 67 of the Defendant ’s Written
Submission when the prayers in the Counterclaim were
mentioned;
(d) prayed for pre-judgment interest to be awarded at the rate

of 5% per annum from the date of termination of the
Agency Agreement or breach of copyright and confidential
information, whichever is earlier. Since the PL 106 Report
is the earliest, the Defendant urged the Court to award
interest from 30.9.2013; and
(e) sought an order for costs of RM1.2 million for the trial on
liability citing cases such as Positive Well Marketing Sdn
207
Bhd v. OKA Concrete Industries Sdn Bhd [2014] 10 MLJ

385, Motordata Research Consortium Sdn Bhd v. Ahmad
Shahril Abdullah & Ors [2017] 1 LNS 1142 and Jan De
Nul (Malaysia) Sdn Bhd v. Berjaya Sompo Insurance
Berhad [2019] 1 LNS 516.
[261] Ms. Manjit, in responding to the above submissions prayed,

inter alia, that pre-judgment interest be awarded from 2.5.2017
which is the date of filing of the Counterclaim, and the Court
agreed. It was also contended that the Defendant had abandoned
the claims for aggravated damages and an account of profits and
relying on the case of Motordata (supra), that the Defendant is
not entitled to statutory damages pursuant to the CA 1987.
However, upon a proper reading of the Defendant ’s Written
Submission and as further clarified by Ms. Cindy, the Court was
not swayed by the submissions of the Plaintiff ’s counsel.
[262] On the issue of costs, the Court is of the opinion that it would be
best for the quantum of costs for the trial on both liability and
assessment of damages be determined at the end of the whole
proceedings to enable the matter to be considered in its entirety.
Moreover, the Court found that the Defendant’s Written
Submission and supplemented by counsel’s oral submission on
the date of decision did not justify an order for costs in the sum
of RM1.2 million to be made at that juncture since the
Defendant had not itemised the disbursements in writing (these
were raised verbally) and did not produce other relevant case
authorities on point.
[263] Two drafts of the judgment on liability was prepared on the

evening of 14.8.2020 and learned counsels were given the
opportunity to submit accordingly and finally, the Court made
the orders as reflected in the 2 nd draft of the judgment marked as
208
Annexure ‘A’. That, however, was not the end of the matter.
Subsequently, the parties twice requested for clarification
sessions on the draft judgment.
[264] Learned counsels appeared before the Court on 7.9.2020 as

regards the wordings of what is now para 7 in the final judgment
(see para 30 above). Ms. Manjit also proposed that references to
exhibit P138 and D258 be added to subpara 3(a) and to exhibit
D261 be added to subpara 3(b). Ms. Cindy relied on the case of
Flexsoft Technology Sdn Bhd v. First E-Formatics Sdn Bhd &
Ors [2020] 5 CLJ 650 in objecting to the Plaintiff ’s suggestion
and the Court upheld the objection. The Plaintiff’s counsel
additionally enquired regarding the prayers in subpara 36(d)(i)
and (ii) in the SoC (see para 25 above) for a permanent
injunction to, among others, restrain the Defendant from
publishing defamatory allegations against the Plaintiff, HATs
and/ or the Plaintiff’s management, directors, employees and/ or
shareholders. The Court explained that the foundation for these
prayers no longer exists upon the findings of the Court that the
Defendant has succeeded in establishing its defence of
justification and fair comment. Lastly, Ms. Cindy conveyed her
client’s instruction to ask for costs of RM800,000.00 for the
trial on liability and that she was prepared to file written
submission within a week. However, Ms. Manjit was unable to
do so within the same timeline and so the Court decided that the
order as to costs shall be maintained and the trial on the
assessment of damages before this Court is to be expedited.
[265] On 30.9.2020, the counsels again appeared before the Court, this
time in relation to para 8 of the draft judgment wherein the
Defendant requested, vide its solicitor’s letter dated 9.9.2020,
that the amendments as underlined below be incorporated in the
said para:
209
“An inquiry as to damages suffered by the Defendant for

the Plaintiff’s breach of contract and an inquiry as to
damages suffered by the Defendant and alternatively, at
the Defendant’s option an account of profits due from the
Plaintiff’s act of utilizing and/or disclosing and/or in any
way dealing with the Defendant’s Information and
Documents and/or the Plaintiff’s acts of infringement of
the Defendant’s copyright;”.
[266] In the said letter dated 9.9.2020, the Defendant stated its
understanding that the inquiry as to damages is for all the cause
of actions as pleaded in the Counterclaim including breach of
contract, and as an alternative, an account of profit which
applies only for infringement of copyright and breach of
Confidential Information. The Defendant cited the case of CIMB
Bank Bhd v. Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1
for the trite principle of ubi jus ibi remedium – where there is a
right there is a remedy.
[267] The Plaintiff’s counsel objected to the amendment for the reason
that the words “and/ or” after the words “An inquiry as to
damages suffered by the Defendant” suffice to preserve the
Defendant’s right to an inquiry for damages for breach of
contract.
[268] After hearing submissions by learned counsels, the Court

decided that the draft judgment does not need to be amended as
proposed by the Defendant because –
(a) the Defendant had pleaded three distinct cause of action

namely, breach of contract, infringement of copyright and
breach of the Defendant’s Confidential Information and
the trial had proceeded on this basis and judgment was
given in favor of the Defendant for all three cause of
210
action. Based on the CIMB Bank case, the relief is

ancillary to the cause of action and thus, the Defendant is
not precluded from seeking general damages following the
declaration that the Plaintiff has breached the Agency
Agreement;
(b) the Plaintiff’s counsel agreed that the Plaintiff will not
raise any objection at the hearing on the assessment of
damages to the effect that the Defendant is prohibited from
claiming general damages for breach of contract just
because this relief was not pleaded in the Cou nterclaim;
and
(c) the wordings in para 8 of the judgment does not preclude

the Defendant from leading evidence on general damages
for breach of contract at the hearing on assessment of
damages.
The Plaintiff’s application for leave to adduce fresh evidenc e

during the trial
[269] For the sake of completeness, it should be mentioned that during

the cross-examination of Zelim on 13.1.2020, which is the 34 th
day of trial and 9 th day of the cross-examination of Zelim (see
NoE, Vol. 16 at pp 33 - 45), the Plaintiff’s counsel wanted to
refer Zelim to a copy of a document from the State Register of
Russia which was printed on 16.11.2019 ( ‘said Document’).
[270] Ms. Manjit drew the attention of the Court to the Primary State
Registration Number (‘PSRN’) on the said Document viz.
1027700125210, which is identical to the PSRN in the
Certificate issued by the Ministry of Taxation of the Russian
Federation for the Defendant, “LLC SPC “Diatech”“ (exhibit
211
D252). Learned counsel submitted that the said Document

reflects two changes within the Defendant, namely –
(a) its full name and abbreviated name which was changed on
16.2.2010 from “Limited Liability Company Scientific and
Production Company “Diagnostic Technologies for the
Technosphere” or “NPF “Diatekh LLC”“ to “Society With
Limited Liability Research And Production Firm
“Diagnostic Technologies For Technosphere ” or “LLC
NPF “Diatech”“; and
(b) on 8.10.2018, Zelim was released as the President and on

8.7.2019, one Kleschunov Alexey Sergeevich ’s position
changed from “previously temporarily carrying out the
responsibilities of the President” to “currently the
President”.
[271] The Defendant’s counsel strenuously objected to any reference

being made to the said Document. Subsequently, Ms. Manjit
informed the Court that her instruction was to proceed to make
an application for the said Document to be referred to Zelim and
admitted in evidence.
[272] The Court then directed learned counsels to prepare written

submissions wherein the Plaintiff submitted that this is a
suitable case for the Court to exercise the discretion conferred
pursuant to O. 1A; O. 3, r. 5; O. 34, r. 2(2) (i); and O. 92, r. 4
RoC 2012 and grant leave to refer and admit the said Document
on the grounds that –
(a) the said Document is admissible and relevant to the issue

of Zelim’s credibility;
212
(b) the changes on the full and abbreviated names of the

Defendant is within Zelim’s knowledge as the President at
the material time;
(c) the changes in the position of the President took place in

October 2018 and July 2019 and the said Document was
only obtained by the Plaintiff on 16.11.2019. Hence, there
was no delay in referring to the said Document;
(d) the Plaintiff’s application is bona fide and is necessary to

prevent injustice and will serve to achieve sub stantial
justice in court; and
(e) there is no prejudice suffered by the Defendant and nor

any element of surprise as the said Document is in relation
to the Defendant company and Zelim’s position thereto.
[273] The Defendant countered that the Plaintiff’s application should

be dismissed with cost because –
(a) the Plaintiff had attempted to adduce new documents on

several occasions during the trial and the Court had, on
18.3.2019, expressly directed that no further documents
shall be adduced and Ms. Manjit had confirmed that there
will not be anymore documents from the Plaintiff;
(b) the Plaintiff’s conduct is a trial by ambush and amounts to

an abuse of the process of the court and made in bad faith;
(c) the Plaintiff had closed its case; and
(d) the source of the said Document is doubtful and

questionable.
[274] Following a short clarification on 21.1.2020 concerning the

written submissions, the Court took cognizance that the
213
Plaintiff’s application was with a view of testing Zelim ’s

credibility pursuant to s. 146(a) EA 1950 which provides that
“When a witness may be cross-examined, he may, in addition to
the questions hereinbefore referred to, be asked any questions
which tend – (a) to test his accuracy, veracity or credibility;
…”. The Court noted that the Certificate marked as exhibit D252
appears to originate from the Ministry of Taxation of the
Russian Federation rather than the authority responsible for
State Registration of Legal Entities and the registration number
in that Certificate is identical to the PSRN appearing in the said
Document.
[275] In the circumstances, the Court was inclined to allow the

Plaintiff to make references to the said Document in a further
session of cross- examination of Zelim with the right being
given for re-examination and reasonable time to be given to the
Defendant to look into the said Document and to prepare its
case. In my view, the interest of justice is best served by giving
an opportunity to the Defendant to explain this issue since it
involves aspects of Russian law and regulations and if left
unexplained, there would be nagging doubt cast over Zelim ’s
evidence by the very fact that the Plaintiff’s counsel has raised
the matter, especially as regards Zelim’s designation as the
Defendant’s President, albeit in a very belated manner at the end
of her cross- examination.
[276] Following the ruling of the Court, on 22.1.2020, Zelim was

questioned regarding the said Document which was marked as
ID273 and the Plaintiff also produced the printout from the
current website of the Defendant (exhibit D272) (see NoE, Vol.
18 at pp 3 - 103). Suffice to say that the Court is satisfied with
Zelim’s evidence that (i) he is indeed the Defendant ’s President;
(ii) ID273 is issued by the Federal Service for Monitoring in the
214
areas of Communication and Information Technologies

(ROSKOMNADZOR) which do not issue any certificates or
information about companies or their registration and has a
statement at the end that “In the process of information output,
the section history of changes may contain minor inaccuracies
associated with incorrect data obtained from the primary
sources, and therefore the information in this section is intended
for informational purposes only.”; and (iii) the company
registration data is within the scope of the Federal Tax Service
which runs the Unified State Register for Legal Entities. In any
event, a perusal of Appendix 7(F) in the Plaintiff ’s Executive
Summary (Volume 2) shows that the Plaintiff had decided not to
pursue the issue surrounding ID273 as one of the basis to
challenge Zelim’s credibility.
PRONOUNCEMENT
[277] Based on all the abovesaid consideration, the Court pronounced

the following findings in respect of the Common Issues To Be
Tried and the Plaintiff’s Additional Issues To Be Tried:
(a) The contents of the e-mail to Repsol dated 15.2.2016, the

letter to Repsol dated 15.12.2016 and the letter to
Occidental dated 27.12.2016 are defamatory of the
Plaintiff.
(b) However, the Defendant has established its defence of

justification and fair comment.
(c) The Defendant has not committed the tort of inducement

for breach of existing contracts between the Plaintiff and
Repsol, and the Plaintiff and Occidental.
215
(d) The Defendant has not committed the tort of unlawful

interference of business and tort of intentional interference
with prospective economic advantage.
(e) The Plaintiff is not entitled to the reliefs sought.
(f) The Plaintiff had breached the Agency Agreement d ated

31.3.2013.
(g) The Defendant is not estopped from alleging that the

Agency Agreement was terminated due to the breach of the
Agency Agreement.
(h) The Plaintiff has infringed the copyright of the Defendant.
(i) The Plaintiff has committed breach of confidential

information.
(j) The Defendant is entitled to the reliefs sought under its

Counterclaim as set out in the final judgment (encl. 367).
(k) The Defendant’s conduct in terminating the Agency

Agreement is not premature without any sufficient cause o r
is wrongful/ unlawful.
(l) The Plaintiff has not established its defence to the

Defendant’s Counterclaim.
[278] In summary, the final outcome of this long outstanding dispute

is that the Plaintiff has not established any of its claims on a
balance of probabilities whilst the Defendant has successfully
done so in respect of its counterclaim for breach of the Agency
Agreement, copyright infringement and breach of the
Defendant’s Confidential Information.
[279] Order for assessment of damages to be held befo re this Court.
216
Dated: 28 MAY 2021
(ALIZA SULAIMAN)
Judge High Court
Kuala Lumpur
COUNSEL:
For the plaintiff - Manjit Kaur Gill & Keshantini Baskeran; M/s
Manjit Lavinder & Co
Advocates & Solicitors
Suite 566, Block A1
Leisure Commercial Square
No. 9, Jalan PJS 8/9
46150 Petaling Jaya
Selangor
For the defendant - Cindy Goh Joo Seong, Heidi Lim Ai Yuen &
Hayden Tan Chee Khoon; M/s Chooi & Company + Cheang & Ariff
Advocates & Solicitors
39 Court @ Loke Mansion
No. 273A, Jalan Medan Tuanku
50300 Kuala Lumpur
Case(s) referred to:
A & M Recording Limited And Another v. Video Collection

International Limited [1995] E.M.L.R. 25
AB Latef & Associates (M) Sdn Bhd v. Govindasamy a/l Suppiah

[2016] 5 MLJ 508
Abdul Rahman bin Md Yusoff & Ors v. Kwong Yik Bank Bhd [1998]
MLJU 252
217
Abu Bakar bin Pangis & Ors v. Tung Cheong Sawmill Sdn Bhd &
Ors [2014] 5 MLJ 384
Alfa Laval (M) Sdn Bhd v. Ng Ah Hai & Ors [2008] 5 MLJ 344
Allen v. Flood [1898] AC 1
American International Assurance Co Ltd v. Koh Yen Bee (F)

[2002] 4 MLJ 301
Ampledeal (M) Sdn. Bhd. & 3 Ors. v. Laponie (M) Sdn. Bhd. & 3
Ors. [2015] MLJU 1933
Anacon Corporation Ltd & Anor v. Environmental Research

Technology Ltd & Anor [1994] FSR 659
Andy Bagindah v. PP [2000] 3 CLJ 289
Ang Koon Kau & Anor v. Lau Piang Ngong [1984] 2 MLJ 277
Attorney General of Belize v. Belize Telecom Limited [2009] UKPC

11
Ayob Bin Saud v. TS Sambanthamurthi [1989] 1 MLJ 315
Azmi Osman v. PP & Another Appeal [2015] 9 CLJ 845

Bandar Setia Alam Sdn Bhd v. Intramewah Development Sdn Bhd &
Anor [2007] 1 LNS 365
Bank Of Tokyo-Mitsubishi (Malaysia) Bhd v. Sim Lim Holdings Bhd

& Ors [2001] 2 CLJ 474
Bekalan Sains P & C Sdn Bhd v. Bank Bumiputra Malaysia Bhd
[2011] 5 MLJ 1
Berjaya Times Squares Sdn Bhd (formerly known as B erjaya Ditan
Sdn Bhd) v. M Concept Sdn Bhd [2010] 1 MLJ 597
Bio Pure Technology Ltd v. (1) Jarzon Plastics Ltd and (2) Anthony
Elliott [2005] Lexis Citation 3643
Boo Are Ngor (p) v. Chua Mee Liang (p) (sued as public officer of
Kim Leng Tze Temple) [2009] 6 MLJ 145
218
Bovril Ltd v. Bodega Co Ltd [1916] 33 RPC 153
BRE Sdn Bhd & Ors v. Tun Datuk Patinggi Hj Abdul Rahman Ya'
Kub [2005] 3 MLJ 485
Buckman Laboratories (Asia) Pte Ltd v. Lee Wei Hoong [1999] 3

SLR 333
Bumi Armada Navigation Sdn Bhd v. Mirza Marine Sd n Bhd [2015]

5 CLJ 652
Campbell v. MGN Ltd [2004] 2 AC 457
CGU Insurance Bhd v. Asean Security Paper Mills Sdn Bhd [2006]
3 MLJ 1
Chai Hoon Seong v. Wong Meng Heong [2010] 8 MLJ 104
Chantika Kelang Beras Sdn Bhd v. Padiberas Nasional Berhad

[2019] MLJU 301
Charles Grenier Sdn Bhd v. Lau Wing Hong [1996] 3 MLJ 327
Cheng Chuan Development Sdn Bhd v. Ng Ah Hock [1982] 2 MLJ
222
Chiew Foo Hua v. The Publisher Miri Daily News & Anor [2000]
MLJU 664
Chin Moi Yen & Ors v. Chai Weng Sing & Ors [2016] 1 LNS 976
China Road & Bridge Corp & Anor v. DCX Technologies Sdn Bhd
and another appeal [2014] 5 MLJ 1
Chok Foo Choo @ Chok Kee Lian v. The China Press Bhd [1999] 1
MLJ 371
Chong Swee Huat & Anor v. Lim Shian Ghee t/a L & G Consultants
& Education Services [2009] 3 MLJ 665
CIMB Bank Bhd v. Anthony Lawrence Bourke & Anor [2019] 2 MLJ
1
Coco v. A.N. Clark (Engineers) Ltd. [1969] RPC 41
219
Creation Records Ltd. and others v. News Group Newspaper Ltd
[1997] Lexis Citation 1633
Dato' Dr Tan Chee Khuan v. Chin Choong Seng @ Vict or Chin

[2011] 8 MLJ 608 at p 623
Dato Seri Mohammad Nizar bin Jamaluddin v. Sistem Televisyen

Malaysia Bhd & Anor [2014] 4 MLJ 242
Dato' Sri Dr Mohamad Salleh Ismail & Anor v. Nurul Izzah Anwar
& Anor [2018] 9 CLJ 285
Dato' Seri Anwar bin Ibrahim v. Publi c Prosecutor & another

appeal [2004] 3 MLJ 405
David Macbrayne Limited Pursuer against ATOS IT Services (UK)

Limited Defender [2018] CSOH 32
David Wong Hon Leong v. Noorazman bin Adnan [1995] 4 CLJ 155
Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v. Intrared Sdn
Bhd & Anor [2013] 7 MLJ 437
DP Vijandran v. Karpal Singh & Ors [2000] 3 MLJ 22

Dura-mine Sdn Bhd v. Elster Metering Limited & Anor [2015] 3
MLJ 1
Dynacast (Melaka) Sdn Bhd & Ors v. Vision Cast Sdn Bhd & Anor
[2016] 3 MLJ 417
Eastern & Oriental Hotel (1951) Sdn Bhd v. Ellarious George
Fernandez & Anor [1989] 1 MLJ 35
Electro Cad Australia Pty Ltd & Ors v. Mejati RCS Sdn Bhd & Ors
[1998] 3 MLJ 422
Flexsoft Technology Sdn Bhd v. First E -Formatics Sdn Bhd & Ors
[2020] 5 CLJ 650
Francis Day & Hunter v. Bron [1963] Ch 587 at 618
Ganesh Raja a/l Nagaiah & Ors v. NR Rubber Industries Sdn Bhd
[2017] 2 MLJ 396
220
Glove Kendall Limited & Anor v. Maple Challenge Sdn Bhd & Ors
and other suits [2016] MLJU 1452
Greig v. Insole [1978] 1 WLR 32
Guan Teik Sdn Bhd v. Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ
324
Gurbachan Singh Bagawan Singh & Ors v. Vellasamy Pennusamy &

Other Appeals [2015] 1 CLJ 719
Guy Neale and others v. Nine Squares Pty Ltd [2014] SGCA 64
Gwee Tong Hiang v. Boo Cheng Hau [2016] MLJU 27
Gerard Jude Timothy Pereira v. Kasi a/l KL Palaniappan [2017] 6

MLJ 54
H & R Johnson (Malaysia) Bhd v. H & R Johnson Tiles Limited &

Anor [1995] 2 AMR 1390
Ho Weng Leong v. Ng Kee Chin [1996] 5 MLJ 139
Iftikar Ahmed Khan (as a representative for the estate of Sardar
Mohd Roshan Khan, deceased) v. Perwira Affin Bank Bhd
(previously known as Perwira Habib Bank Malaysia Bhd) [2017]
MLJU 1765
Imerman v. Tchenguiz & Ors [2010] EWCA Civ 908
Institute of Commercial Management Unite d Kingdom v. New

Straits Times Press (Malaysia) Bhd [1993] 1 MLJ 408
Ismeca Malaysia Sdn Bhd v. Micheal Gerard Peterson & Ors [2012]
4 CLJ 973
Item Industrial Engineering Sdn Bhd & Ors v. Bank Utama

(Malaysia) Bhd [2015] 1 CLJ 933
Jaafar bin Shaari & Anor (suing as administrator of the estate of

Sho?ah bte
Ahmad, deceased) v. Tan Lip Eng & Anor [1997] 3 MLJ 693;
[1997] 4 CLJ 509
221
Jan De Nul (Malaysia) Sdn Bhd v. Berjaya Sompo Insurance Berhad
[2019] 1 LNS 516
Janagi v. Ong Boon Kiat [1971] 2 MLJ 196
Jasmine Food Corp Sdn Bhd v. Leong Wai Choon & Anor [2016] 11
MLJ 812
JB Jeyaratnam v. Goh Chok Tong [1985] 1 MLJ 334
JB Kulim Development Sdn Bhd v. Great Purpose Sdn Bhd [2002] 2

MLJ 298
Jorden v. Money [1854] v. HLC 185
Joshua Benjamin Jeyaretnam v. Goh Chok Tong [1989] 3 MLJ 1
Juahir bin Sadikon v. Perbadanan Kemajuan Ekonomi Negeri Johor

[1996] 3 MLJ 627
Juris Technologies Sdn Bhd & Anor v. Foo Tiang Sin & Ors [2020]
MLJU 157
Karuppannan a/l Ramasamy & Anor v. Elizabeth Jeevamalar
Ponnampalam & Ors (Sundaram a/l Marappa Goundan & Anor,
interveners and Raya Realti, third party) and another appeal [2010]
1 MLJ 156
Keongco Malaysia Sdn Bhd v. Ng Seah Hai [2012] 7 MLJ 288
Khaw Cheng Bok & Ors v. Khaw Cheng Poon & Ors [1998] 3 MLJ
457
Kheng Chwee Lian v. Wong Tak Thong [1983] 2 MLJ 320

Koh Yen Bee v. American International Assurance Company Ltd
[2000] 3 CLJ 28
Kondisi Utama Sdn Bhd v. Baltic Agencies Pte Ltd and another
appeal [2019] 1 MLJ 181
Ktl Sdn. Bhd. v. Leong Oow Lai [2014] MLJU 1405
222
Kumpulan Darul Ehsan Bhd v. Mastika Lagenda Sdn Bhd [2017] 4
MLJ 561
Ladbroke (Football) Ltd v. William Hill (Football) Ltd [1964] 1 All

ER 465
Landry v. Pratt & Whitney Canada [1996] 8 W.W.R. 511
Lau Song Seng & Ors v. Public Prosecutor [1998] 1 SLR 663
Lee Hark Lam & Ors v. Kebun Rimau Sdn Bhd & Anor [2016] 6
MLJ 751
Lee Kuan Yew v. Chin Vui Khen & Anor [1991] 3 MLJ 494
Lee Ah Chor v. Southern Bank Bhd [1991] 1 MLJ 428
Letchumanan Chettiar Alagappan @ L Allagappan (sebagai

pelaksana wasiat/executor kepada SL Alameloo Achi alias Sona
Lena Alamelo Acho, si mati) & Anor v. Secure Plantation Sdn Bhd
[2017] MLJU 379
Lim Guan Eng & Anor v. Ganesan a/l Narayanan [2017] MLJU
1898
Lionex (M) Sdn. Bhd. v. Allen Lim Lai Wah & Ors [2016] MLJU 967
Loh Holdings Sdn Bhd v. Peglin Development Sdn Bhd & Anor
[1984] 2 MLJ 105
M Concept Sdn Bhd v. Berjaya Times Square Sdn Bhd [2004] 4 MLJ
556
Mak Khuin Weng v. Melawangi Sdn Bhd [2016] 5 MLJ 314

Malayan Banking Bhd v. KM Music Lines Sdn Bhd [2015] 5 MLJ
533
Megnaway Enterprise Sdn Bhd v. Soon Lian Hock (sole proprietor

of the firm Performance Audio & Car Accessories Enterprise)
[2009] 3 MLJ 525 at pp 537 - 538
223
Merbok Hilir Bhd v. Sheikh Khaled Jassem bin Mohammad Jassem
Al-Thani (t/a Petroserv General Trading Establishment) and other
appeals [2013] 5 MLJ 407
Merkur Island Shipping Corp v. Laughton and others [1983] 1 All

ER 334
Mirzan Bin Mahathir v. Star Papyrus Sdn Bhd [2000] 6 MLJ 29
Mohd Shukri bin Mat (sebagai pentadbir harta pusaka Wan Mek
binti Wan Abdullah@Wan Eshah bin Wan Abdullah) v. Wan Rahmah
binti Wan Abdullah (sebagai pentadbir harta pusaka Wan Abdullah
bin Wan Ahmad) [2017] MLJU 2026
MRA International Sdn Bhd v. SPC Diatech, LLC at [2018] MLJU

107; [2018] 1 LNS 136
Motordata Research Consortium Sdn Bhd v. Ahmad Shahril
Abdullah & Ors [2017] 1 LNS 1142
Muniyandi A/L Periyan & Anor v. Eric Chew Wai Keat & Anor
[2003] 3 MLJ 527
Menah Sulong v. Lim Soo & Anor [1983] 1 CLJ 26
National Feedlot Corp Sdn Bhd & Ors v. Public Bank Bhd [20 18]
MLJU 766
Ng Yee Fong & Anor v. E.W. Talalla [1986] 1 MLJ 25

OBG Ltd and another v. Allan and others Douglas and others v.
Hello! Ltd and others (No 3) Mainstream Properties Ltd v. Young
[2008] 1 AC 1
Omega Securities Sdn Bhd v. Kok Fook Loy [2010] 9 ML J 224
Pedley v. Majlis Ugama Islam Pulau Pinang & Anor [1990] 2 MLJ
307
Penerbitan Pelangi Sdn Bhd v. Pan Alliance Sdn Bhd And Other
Actions [1999] 4 MLJ 369
Perunding Alam Bina Sdn Bhd v. Errol Oh & Ors [1999] 6 MLJ 101
224
Playing Cards (Malaysia) Sdn Bhd v. China Mutual Navigation Co
Ltd [1980] 2 MLJ 182
Popular Industries Ltd. v. The Eastern Garment Manufacturing Co.

Sdn. Bhd. [1990] 2 CLJ Rep 635
Positive Well Marketing Sdn Bhd v. OKA Concrete Industries Sdn

Bhd [2014] 10 MLJ 385
Public Prosecutor v. Hassan Jafarpour [2019] 5 MLJ 350

Quality Concrete Holdings Bhd v. Classic Gypsum Manufacturing
Sdn Bhd & Ors [2012] 2 MLJ 521
R v. Hopkins [1915] 20 CLR 464
Raub Australian Gold Mining Sdn Bhd (in creditors' voluntary

liquidation) v. Hue Shieh Lee [2019] 3 MLJ 720
Ray v. Classic FM plc [1998] All ER (D) 105

Re Coroin Ltd (No 2); McKillen v. Misland (Cyprus) Investments
Ltd and others [2013] 2 BCLC 583
Real Electronics Industries Singapore (Pte) Ltd v. Nimrod

Engineering Pte Ltd (T Vimalanathan, third party) [19 96] 1 SLR
336
Regent Decorators (M) Sdn. Bhd. & Anor. v. Michael Chee & Ors.
[1984] 2 MLJ 78
RHB Bank Bhd (substituting Kwong Yik Bank Bhd) v. Kwan Chew
Holdings Sdn Bhd [2010] 2 MLJ 188
Rochdale Canal Company v. King [1851] 2 Sim NS 78
Rookes v. Barnard [1964] AC 1129
S Pakianathan v. Jenni Ibrahim [1988] 2 MLJ 173
Saiman Bin Umar v. Lembaga Pertubuhan Peladang and another

appeal [2015] 6 MLJ 492
225
Saltman Engineering Co., Ltd. And Others v. Campbell Engineering
Co., Ltd. [1963] 65 RPC 203
Sarawak Energy Berhad & Anor v. Peter Kallang & ors [2016] 1
LNS 1072
Schmidt v. Schmidt [1969] QWN 3
Seacera Group Berhad v. Dato' Tan Wei Lian & Ors [2019] 1 LNS
762
Selangor Industrial Corporation Sdn Bhd v. Kesuma Murni Sdn Bhd
(dahulunya dikenali sebagai Wawasan Bina Murni Sdn Bhd) & Ors
[2016] MLJU 1087
Shen & Sons Sdn Bhd v. Jutawarna Development Sdn Bhd & Ors
[2016] 7 MLJ 183
Silkin v. Beaverbrook Newspapers Ltd [1958] 1 WLR 743

Simpson Wong v. Vas Car Auto Parts Sdn Bhd & Ors and another
case [2017] MLJU 355
Siti Aisha binti Ibrahim v. Goh Cheng Hwai [1982] 2 MLJ 124
SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor
[2016] 1 MLJ 464
Sukatno v. Lee Seng Kee [2009] 3 MLJ 306
Sunrise West Sdn Bhd & Ors v. Pravin Mahtaney Ramchand & Anor
[2012] 1 MLJ 414
Superintendent of Land and Survey (4 t h Div) v. Hamit bin Matusin

[1994] 3 MLJ 47
Syed Husin Ali v. Sharikat Penchetakan Utusan Melayu Berhad &

Anor [1973] 2 MLJ 56
Tan Hui Nee @ Tan Gwee Lian & Satu Lagi v. Central Sugars
Refinery Sdn Bhd [2011] 1 LNS 1647
Tan Kim Khuan v. Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697
226
Tenaga Nasional Bhd v. Guan Heng Plastic Industries Sdn Bhd
[2013] 7 MLJ 888
Tenaga Nasional Bhd v. Panareno Sdn Bhd (Vital Projects Sdn Bhd,
third party and Semantra No-dig Engineering Sdn Bhd, fourth
party) [2018] MLJU 2003
The Board of Trustees of the Sabah Foundation & Ors v. Datuk

Syed Kechik bin Syed Mohamed & Anor [1999] 6 MLJ 497
Tindok Besar Estate Sdn Bhd v. Tinjar Co [1979] 2 MLJ 229
Tjanting Handicraft Sdn Bhd & Anor v. Utus an Melayu (Malaysia)

Sdn Bhd & Ors [2001] 3 CLJ 571
Tony Pua Kiam Wee v. Government of Malaysia and another appeal

[2019] 12 MLJ 1
TOP-A Plastik Sdn Bhd & Ors v. Bumiputra Commerce Bank Bhd
[2006] 3 CLJ 460
Torquay Hotel Co Ltd v. Cousins [1969] 2 Ch 106
UDA Holdings Bhd (formerly known as Perbadanan Pembangunan

Bandar) v. Melewar Leisure Sdn Bhd (formerly known as Harta
Bumi Sdn Bhd) [2009] 2 MLJ 408
UEM Group Bhd (previously known as United Engineers (M) Bhd v.

Genisys Integrated Engineers Pte Ltd & Anor [2018] supp MLJ 363
Vitof Ltd v. Altoft [2006] EWHC 1678
Wee Shuo Woon v. HT Sri [2017] SGCA 23

Welds (by his mother and litigation friend) v. Yorkshire Ambulance
Service NHS Trust and another 155 BMLR 101
Wong Thin Yit v. Mohamed Ali [1971] 2 MLJ 175
Worldwide Rota Dies Sdn Bhd v. Ronald Ong Cheow Joon [2010] 8
MLJ 297
Yeoh Tai Chuan & Anor v. Tan Chong Kean [2016] 4 MLJ 769
227
Yeohata Machineries Sdn Bhd & Anor v. Coil Master Sdn Bhd &
Ors [2015] 6 MLJ 810
Yian Sdn Bhd v. Datuk Bandar Kuala Lumpur & Ano r [1998] 5 MLJ
550
Zung Zang Wood Products Sdn Bhd & Ors v. Kwan Chee Hang Sdn
Bhd & Ors [2012] 5 MLJ 319
Legislation referred to:
Contract Act 1950, ss. 29, 157, 158
Copyright Act 1987, ss. 3, 7, 13, 26, 36, 37, 42

Defamation Act 1957, ss. 8, 9
Evidence Act 1950, ss. 60 (3), 91, 92, 101, 102, 103, 114 (g), 146
(a)
Limitation Act 1953, s. 6
Rules of Court 2012, O. 1A, O. 2 r. 1, O. 3 r. 5, O. 15 r. 2, O. 34 r.

2(2)(i), O. 78 r. 3(2), O. 92 r. 4
Trade Marks Act 1976 (Repealed), s. 10
Trademarks Act 2019, s. 23
Others referred to:
Ananda Krishnan's Words, Phrases & Maxims, Legally & Judicially

Defined, Volumes 10 & 12, Lexis Nexis, 2008
Cambridge Dictionary at
https://dictionary.cambridge.org/dictionary/english/simulate and
https://dictionary.cambridge.org/dictionary/english/possess Clerk &
Lindsell On Torts, Eighteenth Edition, Sweet & Maxwell, 2000
Fowler H. W., Fowler F. G. & Thompson D., The Concise Oxford
Dictionary of Current English (9 t h Edition), Clarendon Press, 1995
228
Gatley on Libel and Slander, 6 t h (1967) and 11 t h (2008) editions,
Sweet & Maxwell
Halsbury's Laws of Malaysia – Agency, Volume 1(2), Fourth

Edition Reissue, LexisNexis, 2002
Halsbury's Laws of England – Agency, Fifth Edition, Volume 1(2),

LexisNexis Butterworths, 2008
Halsbury's Laws of Malaysia – Agency, Volume 4 (2013 Reissue)

Halsbury's Laws of Malaysia – Evidence, Limitation of actions,
Volume 21, LexisNexis, 2011
Halsbury's Laws of Malaysia – Intellectual Property, Volume 22

(2013 Reissue), LexisNexis, 2013
Halsbury's Laws of Malaysia – Tort, Volume 13(2) Reissue,
Marsden Law Book, 2017
Khaw Lake Tee and Tay Pek San, Khaw On Copyright Law In
Malaysia, Fourth Edition, Lexis Nexis, 2017
229

Tab 15 Mra International V SPC

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tab 15 Mra International V SPC

Uploaded by

Copyright:

Available Formats

[2021] 1 LNS 870 Legal Network Series

IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR

MRA INTERNATIONAL SDN BHD

SPC DIATECH, LLC … DEFENDANT

[1] This case involves a wide spectrum of issues in view of the

Parte Interim Injunction Order granted by the Court on

[4] The Defendant is a company established under the laws of the

[5] The main area of the Defendant’s business is technical

[6] In addition, the Defendant is professionally engaged in research

[7] PDT is a diagnostic method which involves applying energy

[8] Based on the Corporate Information from the SSM Search as at

[10] The Plaintiff has received accreditation under MS ISO

- The relationship between the parties

[11] In order to fully understand the history of the relationship

[12] During the pre-Phase 1 period, the Plaintiff contended that

[13] Subsequently, Khosim, Datuk Fariz Nazrul Bin Che Noh

(a) “Exclusive Agent Appointment Letter” for a period of 5

(b) “MRA International Sdn Bhd Agency Agreement For

(c) “Memorandum Of Understanding For Expansion Of

for Prof. Vladimir and transport and personal assistance

(d) “Exclusive Agent Appointment Letter” for a period of 5

(e) “Exclusive Agent Appointment Letter” for a period of 3

(f) “Exclusive Agent Appointment Letter” for a period of 3

Defendant to the attention of Datuk Fariz whereby the

(g) “Exclusive Agent Appointment Letter” for a period of 5

[15] In order to promote and effectively market PDT in Malaysia,

[17] The Defendant further claimed that sometime in January 2014, it

[18] The Defendant additionally alleged that the Plaintiff had

[19] On 24.2.2016, Zelim signed the 30 days’ notice to the Plaintiff

[20] The Plaintiff replied to the Defendant vide a letter dated

[21] In an undated letter, the Defendant’s solicitors, Messrs. Adzly &

- Events post-termination of the Agency Agreement

[22] According to the Defendant, sometime in October 2016, Zelim

(a) “Phonon Diagnostic Technology Agency Agreement” dated

(b) similar agreement with Berk Hill E.S. (‘Berk Hill’) on

(c) “Contract Agreement For Phonon Diagnostic Technology ”

(d) “Commercial Proposal – Provision For Reliability Study

Occidental, Vanguard and the Plaintiff dated 22.2.2017

- The Alleged Defamatory Electronic Mail and Letters

[24] Consequent to the outcome of the investigations, the Defendant

“a) The Plaintiff is an entity which practices fraud and

b) The management of the Plaintiff manages the entity

c) The Plaintiff is an entity which cheats and provides

d) The Plaintiff is an entity which is unethical,

e) The Plaintiff is an entity which do not possess

f) The Plaintiff is an entity which abuses its customers

g) The Plaintiff is an entity which does not practice

h) The Plaintiff is an entity which neglects and does not

i) The Plaintiff is an entity which seeks to make profit

j) The Plaintiff is an entity which produces false and

k) The Plaintiff and its management have committed

l) The Plaintiff is an entity which has infringed the

m) The Plaintiff’s management is a criminal and will be

“a) A declaration that the Defendant wrongfully defamed

b) A declaration that the Defendant has committed the

c) A declaration that the Defendant has committed the

d) A permanent injunction prohibiting, preventing

(i) publishing defamatory allegations whether

and/or any other services provided by the

(ii) publishing defamatory allegations whether

(iii) inducing and/or encouraging breach and/or

(iv) contacting the directors and/or shareholders

(v) interfere and/or interrupt and/or disturb the