Federal Court: Elegant Advisory can't sue Umno

Umno does not deal with middlemen for its supply of election paraphernalia, its lawyer Mohd Hafarizam Harun told the Federal Court today.

He was submitting against a leave application by Elegant Advisory Sdn Bhd to reinstate its RM218 million suit against Umno, filed in 2008.

“We (Umno) do not deal with middlemen. We deal directly with sub-contractors who print and supply election paraphernalia,” he said.

Hafarizam (left) was referring to the party's out-of-court settlement with four sub-contractors that had filed a suit against Umno over non-payment for election paraphernalia they supplied the party in 2006.

The lawyer said that if Elegant Advisory was seeking payment, it should have applied together with the other sub-contractors.

Yusfarizal Yusof, who appeared for Elegant Advisory, submitted that Umno tried to settle the matter and had held several meetings with the company to pay up, but nothing had come of this.

“This shows there is some form of contract, albeit oral, and Umno is obliged to pay,” he said.

“There is also evidence of delivery orders, which were submitted to the court, showing that a deal had been made.”

Both the company and Umno have not disputed the fact that Elegant Advisory had supplied and delivered the material, he said.

Yusfarizal submitted that the company did not provide documents on the billings at the striking-out stage, as it felt that these should be tendered during a full trial.

He said that only a few documents had been provided for the High Court’s consideration, pending a full trial.

In the suit filed by the four sub-contractors, he added, it was agreed that Elegant Advisory had directed them to print, produce and deliver the campaign materials.

He su bmitted there was privity of contract in this case, which denoted that a reasonable cause of action could be instituted against Umno.

However, the three-member bench led by Chief Judge of Sabah and Sarawak Richard Malanjum dismissed the leave application. Sitting with him in the unanimous decision were Justices Zulkefli Ahmad Makinudin and Md Raus Sharif.

Malanjum held that no new legal issue had been raised under Section 96 of the Court of Judicature Act for the court to grant leave.

He told Yusfarizal that his client should have supplied all its documentary evidence. He also advised the company to ensure that it signed written contracts in future dealings.

Company may seek review

Elegant Advisory chief executive officer Samsuddin Ibrahim said the company would consider seeking a review of the decision, as he felt it had strong grounds for such an application.

“I will discuss with my lawyers and depending on the Felda Kemahang suit tomorrow, which is also subject for a review, we will decide on our next course of action,” he told reporters outside the courtroom.

Samsuddin claimed to have evidence on why Umno hired a contractor (middleman) for the supply of its election paraphernalia.

“Where in the world would you have sub-contractors only and not main contractors?” he asked.

Samsuddin said Elegant Advisory faced an uphill task in pursuing the suit, as the testimony could reveal that Umno and BN had violated election offences for spending more than the stipulated ceiling amount.

“In the out-of-court settlement with the four sub-contractors in 2006, Umno paid out more than RM8 million to them to stop the legal action. This brings to question whether Umno had breached the Election Act by spending more than what is stipulated under the law,” he said.

“This (court) action will be a true revelation of what happened behind the scenes in the 2004 election campaign. Hafarizam knew all about this, for he was present at most of the discussions and also tried to arrange a settlement with us."

Samsuddin hinted that only Umno could have placed the order, given that it knew its election candidates in advance.

“I had to make all these arrangements with several sub-contractors, including some in China, to supply the materials within a short span of time,” he said.

“I am the only person who can recognises which campaign material came from which company, as all of them were coded by me."

Samsuddin said if his legal action was not justified, Umno could have instituted action against him or his company for making a false claim.

This, he said, showed that a deal had been made and that "middlemen like us had been appointed" to help Umno to secure the campaign material.

It was previously reported that Elegant Advisory had begun negotiating with potential print material suppliers - some of which are the country's top printers - in late 2003 on a supposedly 'lucrative government contract'.

In its suit, the company had claimed breach of promise by Umno, in that the party had not paid for the supply of election campaign material in 2004.

It named former Umno administration and finance secretary Ishak Abdul Rahman and Umno as the defendants. The company had obtained judgment in default against Umno at the intial stage, before this was set aside.

Last year, the High Court in Kuala Lumpur struck out the suit, saying the matter need not go for full trial. In an unprecedented move, Justice Anantham Kasinater went into the merits of the case at the preliminary stage.

On appeal before the Court of Appeal on April 28 this year, the judges upheld the decision, although they recognised that the High Court judge was wrong to look into the merits so early in the case.

Elegant Advisory then applied to the apex court to reinstate the suit. Although there was no written judgement from the Court of Appeal, the Federal Court went ahead and heard the leave application today.