Company loses RM218m suit against Umno

PUTRAJAYA (Aug 25, 2010): A merchandise supplier which sued Umno for RM218 million for non-payment over the supply of election paraphernalia during the 2004 general election, lost its appeal to reinstate its civil suit against the party.

The Federal Court today dismissed Elegant Advisory Sdn Bhd's leave application to appeal over the Court of Appeal decision in affirming the High Court's ruling.

On Sept 10 last year, the Kuala Lumpur High Court allowed Umno's application to strike out the suit on the grounds that it did not follow the Contracts Act 1950.

Chief Judge of Sabah and Sarawak Tan Sri Richard Malanjum, who presided over the hearing, said there was no question of law for argument for the Federal Court to determine as stated under Section 96 of Courts of Judicature Act 1964, for the court to grant the leave.

However, he advised the company, as a "middle-man" (main contactor) with the sub-contractors, to execute the contract agreement properly through signing of an agreement before proceeding with any project.

He said the company was lucky in that it was not sued by the sub-contractors, to which the company's lawyer, Yusfarizal Yusof, replied "not yet".

Malanjum, who sat with Federal Court judges Tan Sri Zulkefli Ahmad Makinuddin and Datuk Seri Md Raus Sharif, ordered the company to pay RM2,500 as legal costs to Umno.

In the suit, the company initially named former Umno treasurer Datuk Seri Abdul Azim Mohd Zabidi as defendant, but his name was replaced with that of former Umno administration and finance secretary Datuk Ishak Abdul Rahman after the High Court allowed the company's application to amend the name of the defendant in the suit last year.

In its writ of summons, Elegant Advisory claimed that it was involved in supplying election merchandise, transportation and publications, and had supplied Umno with the items for the 11th general election in 2004.

The company claimed that it had sent invoices for RM218,013,475 and that the defendant had failed to pay up.

At the outset, Yusfarizal submitted there was an oral contract between the company and Umno, and that the goods had been delivered and used by Umno.

He told the court that the respondent also pleaded that they had received four delivery orders of the goods.

He said the company and Umno had discussed settling the case out of court, and reasoned that if there was no contract, the respondent would not have wanted to settle the case.

Yusfarizal submitted that Umno had paid RM8 million to four sub-contractors appointed by the main contractor, Elegant Advisory, for the project based on the delivery orders but refused to pay the amount sought by the main contractor.

Counsel Datuk Mohd Hafarizam Harun, representing Umno, replied there was no new issue of law raised by the company for the court to grant leave.

He said the company had also failed to furnish the terms of oral contact between both parties, in the statement of claim, or by way of affidavit. — Bernama