Emrail loses RM59m LRT3 bond suit, ordered to pay Kuwait Finance House RM39m

In a significant legal decision, the High Court dismissed Emrail Sdn Bhd's RM59.1 million lawsuit against Kuwait Finance House (M) Bhd (KFH) regarding a disputed performance bond for the LRT3 project.

The court also upheld KFH's counterclaim, ordering Emrail and three guarantors to pay RM39.09 million to the bank.

The judgment highlighted that KFH was not contractually obligated to issue a performance bond conforming to a specific template demanded by the project delivery partner, MRCBGK, and emphasized the distinct contractual obligations between Emrail, its employer, and KFH.

The court further rejected claims of negligence and noted the lack of proof for Emrail's alleged financial losses attributed to the bond issue.

KUALA LUMPUR, Sept 24 — In a double courtroom defeat for rail contractor Emrail Sdn Bhd, the High Court has dismissed its RM59.1 million lawsuit against Kuwait Finance House (M) Bhd (KFH) and ordered the company alongside three personal guarantors to pay the bank RM39.09 million.

Justice Quay Chew Soon dismissed Emrail's claim over a disputed performance bond for the Light Rail Transit 3 (LRT3) development in its entirety and allowed KFH’s counterclaim in full, holding the contractor and its guarantors jointly and severally liable for the outstanding debt, FMT reported.

The three personal guarantors ordered to satisfy the judgment debt are prominent corporate figures Zaki Azmi, Hari Narayanan Govindasamy, and his son, Amrish.

The litigation turned on whether KFH was contractually bound to issue a performance bond conforming strictly to the template prescribed by MRCB George Kent Sdn Bhd (MRCBGK), the project delivery partner (PDP) for the LRT3 project.

“The central question underlying the plaintiffs’ claim is not what the employer wanted, but what the defendant (KFH) agreed to do,” Quay ruled in his judgment issued today.

The judge held that the underlying Islamic financing facility expressly stipulated that the Kafalah bank guarantee had to be in a form, and addressed to parties, acceptable to KFH. This contractual term gave KFH unfettered discretion to decide whether the wording and structure of the requested bond were acceptable.

The court further established that the specific performance bond template required by Emrail was never incorporated into the financing agreement with KFH.

Quay ruled that Emrail could not rely on its independent construction contract with MRCBGK to enforce obligations against KFH, which was not a party to that agreement.

“The plaintiffs have conflated Emrail’s contract with its employer/PDP and its financing contract with the defendant,” he said.

The court also rejected Emrail’s argument that KFH had acted negligently by failing to issue a compliant bond, ruling that a claimant cannot use the tort of negligence to extract a more favourable commercial bargain than what was negotiated under contract.

On Emrail’s claim that the lack of a compliant bond caused RM59.1 million in interim project payments to be withheld, the judge found that the contractor failed to establish causation. The court noted that Emrail offered no proof that MRCBGK would have certified or released the sums, observing that other LRT3 contractors faced industry-wide payment arrears, with Emrail itself eventually receiving around RM402.5 million under a subsequent contract for the rail project.

Ruling on KFH’s counterclaim, Quay held that the financing facility expired on Oct 31, 2021, leaving an outstanding debt of RM39,089,705.42 as of May 16, 2025.

The court ordered Emrail and the guarantors to settle the sum within one month, alongside post-judgment interest at 5 per cent per annum from the date of the decision until full settlement, and awarded KFH RM100,000 in legal costs.

Lawyers S. Shaarvin Raaj, A. Anusha, K. Ravvenneah, J. Jeyakrishna, and Iman Nur Alya represented Emrail and the guarantors.

Counsel Syed Faisal Al-Edros Syed Abdullah, Mohd Wafiy Azman, Choo Shi Jin, Nasbal Harun, Ahmad Iqbal Rohaizan, and Wardah Yunus acted for KFH.

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在一项重要的法律裁决中，高等法院驳回了 Emrail Sdn Bhd 针对 Kuwait Finance House (M) Bhd (KFH) 提起的 5910 万令吉诉讼，该诉讼涉及 LRT3 项目的有争议的履约保证金。

法院还支持了KFH的反诉，命令Emrail和三名担保人向银行支付3909万令吉。

判决强调，KFH 没有合同义务出具符合项目交付伙伴 MRCBGK 要求的特定模板的履约保函，并强调了 Emrail（其雇主）与 KFH 之间不同的合同义务。

法院进一步驳回了有关过失的指控，并指出缺乏证据证明 Emrail 因债券发行而遭受的所谓经济损失。

吉隆坡，9 月 24 日讯——铁路承包商 Emrail Sdn Bhd 在法庭上遭遇双重败诉，高等法院驳回了该公司针对科威特金融之家（马来西亚）有限公司（KFH）提起的 5910 万令吉诉讼，并责令该公司及其三名个人担保人向该银行支付 3909 万令吉。

据 FMT 报道，法官 Quay Chew Soon 完全驳回了 Emrail 就轻轨 3 号线 (LRT3) 开发项目有争议的履约保证金提出的索赔，并完全支持了 KFH 的反诉，裁定承包商及其担保人对未偿债务承担连带责任。

被勒令履行判决债务的三名个人担保人分别是知名企业人士扎基·阿兹米、哈里·纳拉亚南·戈文达萨米及其子阿姆里什。

诉讼的焦点在于 KFH 是否有合同义务签发一份严格符合 LRT3 项目项目交付伙伴 (PDP) MRCB George Kent Sdn Bhd (MRCBGK) 所规定模板的履约保函。

“原告索赔的核心问题不是雇主想要什么，而是被告（KFH）同意做什么，”奎伊法官在今天发布的判决中裁定。

法官认为，相关的伊斯兰融资机制明确规定，担保银行的保函必须采用KFH可接受的形式，并寄送给相关各方。这一合同条款赋予KFH完全的自由裁量权，以决定所要求的保函的措辞和结构是否可接受。

法院进一步确认，Emrail 要求的特定履约保证金模板从未纳入与 KFH 的融资协议中。

Quay 裁定 Emrail 不能依赖其与 MRCBGK 签订的独立施工合同来强制执行针对 KFH 的义务，因为 KFH 并非该协议的当事方。

他说：“原告混淆了 Emrail 与其雇主/PDP 之间的合同和其与被告之间的融资合同。”

法院还驳回了 Emrail 的论点，即 KFH 因未能签发符合规定的保函而存在疏忽行为，裁定索赔人不能利用过失侵权行为来获取比合同协商结果更有利的商业交易。

针对Emrail声称因缺乏合规保证金导致5910万令吉中期项目款项被扣留的说法，法官裁定承包商未能证明因果关系。法院指出，Emrail未能提供任何证据证明MRCBGK会出具担保或发放这些款项，并指出其他LRT3承包商也面临着行业普遍存在的款项拖欠问题，而Emrail最终根据后续的铁路项目合同收到了约4.025亿令吉。

Quay 法官就 KFH 的反诉作出裁决，认为该融资安排于 2021 年 10 月 31 日到期，截至 2025 年 5 月 16 日，仍有 39,089,705.42 令吉的未偿债务。

法院责令 Emrail 和担保人在一个月内偿还全部款项，并自判决之日起至全部款项付清之日止，按年利率 5% 支付判决后利息，并判令 Emrail 和担保人向 KFH 支付 10 万令吉的诉讼费用。

Emrail 和担保人的代表律师有 S. Shaarvin Raaj、A. Anusha、K. Ravvenneah、J. Jeyakrishna 和 Iman Nur Alya。

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