Appeals Court reinstates Puncak Gali Harmoni’s suit against Emrail over RM145m Kelantan rail project, orders fresh hearing

PUTRAJAYA, April 11 — The Court of Appeal yesterday allowed the appeals by Puncak Gali Harmoni Sdn Bhd (PGH) to set aside the High Court’s decision to summarily dismissed its suit and ex parte injunction to prevent Emrail Sdn Bhd from terminating a subcontract award letter related to railway track restoration work between Gua Musang and Tumpat Stations in Kelantan.

A three-judge panel led by Justice Datuk Mohamed Zaini Mazlan ordered the case to be reinstated and remitted to the High Court Shah Alam for the hearing of the originating summons as well as for the injunction application to be heard inter parte before another judge or judicial commissioner.

The panel, also comprising Datuk Faizah Jamaludin and Datuk Ahmad Shahrir Mohamed Salleh, allowed PGH’s appeals with costs of RM30,000 subject to allocatur.

In the court’s broad grounds, Justice Mohamed Zaini said the panel was of the view that in the interest of justice, it would be best for the previous Judicial Commissioner not to continue presiding over the suit as she had made findings on the facts and issues in the suit.

“We further direct that the appellant’s application for an inter parte injunction be fixed for hearing within two weeks from today and be disposed of expeditiously, in view of the fact that this is a national project for the public’s benefit,” he said.

The decision was delivered online via Zoom yesterday. Lawyer Steven Thiru representing PGH confirmed the decision of the court, when contacted by Bernama.

In delivering the decision, Mohamed Zaini said the High Court had set aside the ex parte injunction even though PGH did not file an application to set it aside, adding that the absence of such an application, the High Court’s setting aside of the ex parte injunction was irregular.

“The learned Judicial Commissioner misdirected herself in law when she set aside the ex parte order and ordered that damages to be assessed, despite the absence of an application by the respondent (Emrail) to set it aside,” he said.

Justice Mohamed Zaini said the Judicial Commissioner Datuk Anita Harun’s decision to summarily dismissed the suit constituted a clear breach of natural justice.

In the judgment, Justice Mohamed Zaini said the appellant’s claim arose from a dispute between the company as subcontractor and the respondent (Emrail) as the main contractor regarding the railway restoration project awarded by the government through the Ministry of Transport (MOT).

He said PGH was appointed as a subcontractor via a Letter of Award dated 29 May 2025, with a contract value of approximately RM145.3 million, and a Letter of Undertaking dated 29 August 2025 was subsequently issued by Emrail. 

Justice Mohamed Zaini said the respondent had argued that the Letter of Award was conditional, being subject, inter alia to the respondent being awarded the main contract by MOT and the execution of a formal agreement. However, the appellant maintained that the contract had become unconditional.

He said PGH then commenced the suit against Emrail at the Shah Alam High Court by way of an originating summons on Sept 10, 2025, seeking among others an injunction to restrain the respondent from terminating the Letter of Award pending mediation and arbitration.

On 19 September last year, the Shah Alam High Court granted PGH’s application for an ex parte injunction. However, following an inter partes hearing on 2 October the same year, the court set aside the ex parte injunction and struck out the originating summons.

In the court’s proceeding yesterday, PGH was represented by lawyers Steven Thiru, Alvin Oh, Chong Jen Hui, Priscilla Lim, and Sew Chang Peng, while lawyers Ooi Suan Kim and Terrence Boo Honn Chin acted for the respondent. — Bernama