Thursday October 16, 2008
Court orders Negri ruler to RM3.5mil
By M. MAGESWARI
PUTRAJAYA: A special court here has ordered Yang di-Pertuan Besar Negri Sembilan Tuanku Jaafar Tuanku Abdul Rahman to pay nearly US$1mil (RM3.5mil) to Standard Chartered Bank Malaysia Bhd to honour his commitment in a letter of credit over a business deal.
Chief Justice Abdul Hamid Mohamad, who sat with Chief Judge of Malaya Justice Alauddin Mohd Sheriff, Chief Judge of Sabah and Sarawak Justice Richard Malanjum and Federal Court judges Justices Ariffin Zakaria and Zulkefli Ahmad Makinudin unanimously allowed the banks suit against Tuanku Jaafar. The court was set up to hear cases involving royalty and this was the first trial involving a member of royalty to be disposed of yesterday.
The suit arose after Tuanku Jaafar had on Feb 12, 1999 established through the bank a Standby Letter of Credit (SBLC) valued at US$1mil made in favour of the Connecticut Bank of Commerce (CBC) in the United States for credit facilities to be extended to an American company called Texas Encore LLC (TEC).
The bank had required Tuanku Jaafar to execute a security for the SBLC in the form of a letter of set-off over a fixed deposit to the sum of RM4.18mil in its Seremban branch.
Tuanku Jaafar obtained an injunction on Dec 29, 1999 restraining CBC from making a call on the SBLC and restraining the bank from uplifting the fixed deposit under the letter of set-off.
Yesterday, the Bench granted the banks application to withdraw the required amount from Tuanku Jaafar fixed deposit.
The five-man panel also dismissed with costs a counter-suit filed by the former Yang di-Pertuan Agong seeking a declaration that the bank was not entitled in law to uplift his fixed deposit in settlement of any liability arising from the said SBLC.
Justice Abdul Hamid read out the 32-page judgment over the two suits on his last day sitting as the top judge of the country.
He said: By merely looking at the documents alone, there is not the slightest doubt that the standby letter of credit in question is an irrevocable one.
SBLC is an irrevocable SBLC from its effective date on Feb 11, 1999. An irrevocable SBLC cannot be revoked unilaterally by a customer, he said.
former agong wor…