The Kuala Lumpur High Court, today struck out election campaign material supplier Elegant Advisory Sdn Bhd's RM218 million suit against Umno.

Justice Anantham Kasinater said he was satisfied that the application was without basis and did not follow the Contracts Act 1950.

"The court is satisfied that it did not meet the requirements of Section 71 of the Act and ruled it was unjust enrichment."

"The court is also satisfied there is no privity of contract between Elegant Advisory and Umno. Based on the plaintiff's statement of claim, it does not include material facts necessary to establish viable legal right enforceable against the defendant," said Justice Anantham in chambers.

Indeed, he said in his judgment, the application was frivolous and vexatious and does not merit a full trial.

Justice Anantham also noted that as the case had generated a lot of public interest, he would be failing in his duty by not perusing the case carefully.

However, after studying the facts, he said he was satisfied that the application should be struck out.

He also ordered Elegant Advisory to pay costs of RM10,000 to Umno within 14 days.

Umno ‘a responsible party'

NONE Umno was represented by Mohd Hafarizam Harun (left), while Elegant Advisory was represented by Ahmad Termizi Abdullah.

Ahmad Termizi said he has received instructions to appeal as his client felt that there was a point of law to be raised.

"We will do more research after getting this full judgment before filing the appeal," he said.

Hafarizam meanwhile, lauded the decision as this proved that the party was not involved in lavish or overspending in election campaigns.

"Umno, as a responsible party, did not violate the Election Offences Act 1994," he said

Hafarizam, said DAP veteran leader Lim Kit Siang had made the allegations in parliament based on the the statement of claim.

"Now, with the striking out it proves that we did not violate any laws," he said.

The Act stipulates that campaign material for Parliament elections should not be in excess of RM200,000 and, for state seats, RM100,000.

Suit filed in June 2008

The poll merchandise scandal was first highlighted by Malaysiakini in a series of exclusive reports three months after the 2004 general elections, when BN won a landslide victory.

Elegant Advisory filed the suit in June 2008 claiming a sum of RM218,013,475 as compensation from Umno for the supply of election campaign materials.

The materials include posters, banners, buntings, flags, souvenirs, mineral water and other transport costs.

The claim was made on the basis of Section 71 of the Contracts Act, in which Umno is obliged to pay the campaign materials to Elegant Advisory.

"The company's statement of claim said that in March 2004, Elegant Advisory had supplied the campaign materials to Umno on the party's request and an order was agreed between the both parties.

"The plaintiff has fulfilled the defendant's request and order [...] in a huge quantity and in a short period by appointing third parties as printers for the posters, banners, bunting, flags and other necessary items for the 11th General Election and for Umno.

Sub-contractors engaged for work

"The plaintiff also had appointed printers and suppliers for the mineral water and souvenirs from China," the court document stated.

It was also pointed out that these materials were again used by Umno during the August 2004 Kuala Berang by-election in Terengganu, as spotted by Malaysiakini during the campaign.

"With the supply of these campaign materials, Umno has enjoyed the benefits from it whenthe party (as a BN component party) won the 11th General Election with an overwhelming poll victory," said the statement of claim.

Initially, Elegant Advisory named former Umno treasurer Abdul Azim Mohd Zabidi as the defendant.

However, last week Justice Anantham allowed the company to replace the name with former Umno administration and finance secretary Ishak Abdul Rahman as the new defendant.