The Special Court here has ordered the Yang DiPertuan Besar of Negri Sembilan, Tuanku Ja’afar Ibni Almarhum Tuanku Abdul Rahman, to pay Standard Chartered Bank Malaysia Berhad (SCBMB) US$1mil to honour his commitment over a 1999 business deal.
SCBMB filed the suit in 2005 against Tuanku Ja’afar for allegedly failing to pay the bank US$1mil (RM3.5mil).
The suit arose after Tuanku Ja’afar, on or about Feb 12, 1999, established through SCBMB a stand-by letter of credit (SBLC) valued at US$1mil made in favour of the US-based Connecticut Bank of Commerce (CBC) for credit facilities to be extended by the latter to a US company called Texas Encore LLC (TEC).
At that time, Tuanku Ja’afar was the country’s 10th Yang diPertuan Agung.
TEC is primarily involved in the production of activated tyre rubber. It was to use the money to set up and operate a factory within the Ford Motors compound in Detroit, Michigan.
According to an earlier Bernama report, the bank was seeking a sum of US$999,772, commission fees at the rate of 0.125% per month pursuant to the SBLC facility, a declaration that the bank was entitled to set off the above amount and commission fee against the fixed deposit pursuant to the Letter of Set-Off, interest, costs and other reliefs deemed fit by the court.
The bank sued Tuanku Ja’afar after the defendant failed to undertake the express terms of the Documentary Credit Application (DCA).
In the statement of claim, the bank said the defendant in the DCA had undertaken to indemnify the plaintiff (the bank) against all losses, costs, damages, expenses and demands which it might incur or sustain by reason of the issuance or establishment of the credit.
The bank claimed that the defendant further undertook to provide funds to the bank to meet payments made by the bank in relation to the credit, including all interest, commissions, charges, disbursements and expenses, Bernama said.
The bank claimed that, pursuant to the terms of Irrevocable SBLC Facility and the DCA, the bank was entitled to be reimbursed by the defendant the sum of US$999,772.44.
Tuanku Ja’afar filed a countersuit, seeking a declaration that the bank was not entitled in law to uplift his fixed deposit to settle the sum of US$1mil.
In his statement of defence and in his suit against the bank, he claimed that after the establishment of the Irrevocable SBLC, TEC had not notified him for some months of any progress of the plant.
He said that he grew apprehensive of the lack of progress and by a letter dated April 6 1999, wrote to the bank asking for the Irrevocable SBLC to be suspended.
Tuanku Ja’afar contended that his personal representative, Datuk Hari Menon, had discussed the matter with the bank and was advised that the Irrevocable SBLC could not be revoked except with the consent of CBC as the beneficiary.
He said SCBMB had, via telex, informed the US bank of the notice of rescission, Bernama reported.
Both suits were filed in 2005 at the Putrajaya Special Court, which was set up to hear cases involving members of the royalty.
Wednesday October 15, 2008 MYT 11:19:28 AM The Star Online