1. Case Information
- Court: Court of Appeal, Putrajaya.
- Coram: Aziah Ali, Hamid Sultan Abu Backer, Umi Kalthum Abdul Majid JJCA.
- Decision Date: 9 May 2014.
- Parties: China Road & Bridge Corporation & Anor (Appellants/1st and 2nd Defendants) vs. DCX Technologies Sdn Bhd (Respondent/Plaintiff).
2. Background and Facts The Plaintiff and 1st Defendant entered into a memorandum of agreement (MoA) to secure the “Penang 2nd Bridge Project”. The Plaintiff agreed to provide “support and assistance” to submit proposals to the Malaysian Government. If successful, the Plaintiff would receive 3% of the project value and a 20% sub-contract. After several failed proposals, the 1st Defendant merged with the 3rd Defendant and released information related to its proposal to them. Part of the project was subsequently awarded to the 3rd Defendant. The Plaintiff sued four defendants for breach of contract and confidential information but chose not to serve the 3rd and 4th Defendants.
3. Key Legal Issues
- Whether the Plaintiff properly identified the “confidential information” alleged to have been breached under Clause 7 of the MoA.
- The effect of suing four defendants while only serving two and failing to amend the pleadings.
- Whether the contract involved “peddling skills” or “lobbying” in a manner contrary to public policy.
4. Court’s Decision and Reasoning
Failure to Identify Confidential Information The Court found that the Plaintiff failed to specify what information was actually confidential. It noted:
“Clause 7 of the Memorandum sought to protect confidential information but did not prohibit the intellectual property of the 1st defendant or the plaintiff to be given to third parties. There was no prohibition to divulge their own confidential information.”
The Court emphasized that “information” has a specific legal meaning and the trial court erred by failing to identify it:
“The trial court had to first identify the ‘information’ which had the characteristic of confidentiality and then proceed to consider whether the exception stated in cl 7 would apply and whether there was a breach… Failure to do so would necessarily compromise the integrity of the decision making process and the judgment would stand as perverse.”
Procedural Fairness and Pleadings The Court criticized the Plaintiff’s failure to serve all named defendants or amend the pleadings:
“Naming them and not serving pleadings on them would in actual fact be abhorrent to the notion of justice and fair play. It is the duty of the court to ensure the trial process is not abused whether there is an objection or not by the parties concerned.”
Public Policy and the Role of the Plaintiff The Court observed that the Plaintiff’s role appeared to be that of an “introducer” or “lobbyist”:
“…the plaintiff has no role to play officially with the Government of Malaysia but is just trying to earn something out of the deal by ‘peddling skills’ and the consideration are cosmetic in nature only… It is the duty of the court to ensure that judicial process is not abused by touts in relation to Government contracts.”
Citing Section 24 of the Contracts Act 1950, the Court remarked:
“A promises to obtain for B an employment in the public service, and B promises to pay RM1,000 to A. The agreement is void, as the consideration for it is unlawful.”
5. Outcome The Court of Appeal allowed the appeals of the 1st and 2nd Defendants and set aside the High Court judgment.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified Advocate & Solicitor for your specific legal needs.
