Appellate court dismisses leave sought by Hydroshoppe and Menara KL to cite Fahmi, govt and three competitor companies for contempt

• Judge Datuk Che Mohd Ruzima Mohd Ghazali, who led the bench, said the bench concluded that there is no wanton destruction of the subject matter of the said assets, and even if the appeal to institute an injunction is in favour of the applicants’ position, it would not disrupt the proceedings.

PUTRAJAYA (Sept 4): A three-member Court of Appeal bench has dismissed a motion by former operators of the iconic KL Tower—Hydroshoppe Sdn Bhd and Menara Kuala Lumpur Sdn Bhd—for the court to grant permission to institute contempt proceedings against Communications Minister Datuk Fahmi Fadzil, the government, and three companies that took over the operation of the tower.

Judge Datuk Che Mohd Ruzima Mohd Ghazali, who led the bench, said the bench concluded that there is no wanton destruction of the subject matter of the said assets, and even if the appeal to institute an injunction is in favour of the applicants’ position, it would not disrupt the proceedings.

“There is no merit in the application to grant leave for contempt as sought by the applicants.

“This court orders the applicants Hydroshoppe and Menara KL to pay costs of RM20,000 to the government and minister, and RM20,000 to the three companies,” he said.

Sitting with Che Mohd Ruzima in the unanimous decision were judges Datuk Mohd Firuz Jaffril and Ong Chee Kwan.

Hydroshoppe and its subsidiary Menara KL had wanted to cite Fahmi, the government, along with the three defendant companies—LSH Service Master Sdn Bhd, LSH Best Builders Sdn Bhd, and Service Master (M) Sdn Bhd—for contempt.

Counsel Vinayak Sri Ram for Hydroshoppe and Menara KL, who appeared with David Wong, had wanted to seek leave to initiate contempt proceedings against the three defendant companies for moving into Menara KL on March 31 this year, when the two applicant companies still had a pending suit, including seeking an injunction to bar the three defendant companies from moving in.

Vinayak said to grant leave, the applicants must satisfy that there is a prima facie case for them to institute contempt proceedings against the defendants, as the defendants had acted in spite of a pending ad-interim injunction proceeding still.

“Can a party who thinks they have a good case (against the injunction) behave as if the court had already decided in their favour? We say they cannot, and hence, we say we have satisfied the prima facie for the court to consider imposing contempt,” he said.

The counsel further cited the Monatech principle, where the court can consider granting leave for contempt where there is disposal of assets that is found to interfere with the administration of justice.

However, Che Mohd Ruzima and Firuz had asked, in this case, whether there was dissipation of assets, and Vinayak had replied that when the defendants had moved in, it had affected the applicants’ reputation, as the interim injunction was mere weeks from being heard before the court.

He said the action taken by the proposed contemnor resulted in a forceable takeover to evict the applicants from Menara KL.

No prima facie of contempt, says govt

Senior federal counsel Ahmad Hanir Hambaly @ Arwi, who appeared for the minister and the government, told the appellate bench that there was no destruction of the impending proceeding.

“This is not applicable to all scenarios. There is no prima facie contempt of the action. The action to evict the applicants follows, as this court had pointed out, that the Federal Land commissioner owns the land and KL Tower is our property,” he said.

LSH Service Master is a joint venture between LSH Best Builders and Service Master. Lim Seong Hai Capital Bhd (LSH Capital) (KL:LSH) owns LSH Service Master.

Counsel for the three defendant companies, Datuk Arthur Wang, told the court that the three companies are an innocent third party, as they had successfully tendered the request for participation, and they are the company that took over the operation and possession of the tower.

“It is a national monument, and we have a contract to keep it running and operate it in good faith. There is no intention to upset the process of justice,” he added.

In Hydroshoppe and Menara KL’s suit filed on March 27, they claim that LSH Capital and its units had induced a breach of a contract that the plaintiffs had agreed to with the government in an Aug 1, 2022, meeting.

They claim that LSH Capital and its units had committed dishonest assistance and want the award of the KL Tower concession to LSH Service Master to be declared void and unlawful.

They also claim an estimated RM1 billion in damages and for the concession of the iconic Kuala Lumpur landmark building to be transferred back to them.

Prior to this, Hydroshoppe and Menara KL had failed to obtain an interim injunction from the KL High Court to halt the takeover, and they had also failed in their appeal at the Court of Appeal.

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