Umno can breathe a little easier after the Kuala Lumpur High Court today set aside an earlier order compelling party treasurer Abdul Azim Mohd Zabidi to pay RM218 million for unpaid campaign materials for the 2004 general election.

Poll merchandise supplier Elegant Advisory Sdn Bhd had on July 17 obtained a judgment in default against Abdul Azim after Umno lawyers failed to appear in court to fight the case.

In making the judgment, High Court deputy registrar Ahmad Faizadh Yahaya, who had earlier given the order compelling Abdul Azim to pay up, had reversed his own decision.

The about-turn came after his findings that Elegant Advisory’s writ of summons did not follow proper procedures as the claim was not made directly to Abdul Azim but through a third person.

elegant advisory barisan nasional posters in 2004 election 110808 Ahmad Faizadh also ruled that the statement of claim failed to meet the requirements of the Societies Act, in which the claim should have been made to the person then in office, namely the former secretary for administration and finance, Ishak Abdul Rahim, and not the Umno treasurer.

In other words, Elegant Advisory’s legal action was filed to the wrong parties.

According to Umno lawyer Mohd Hafarizam Harun, the party will be filing a conditional memorandum of appearance within 14 days of the decision. This will enabled him to file an application to strike out the suit.

The RM218 million awarded by the High Court was the highest-ever amount that the ruling party - which forms the backbone of the ruling Barisan Nasional coalition - had been ordered to pay by the court of law.

Suit filed in June 2007

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

The suit initiated by Elegant Advisory was filed in June last year where the company claimed RM218,013,475 as compensation from Umno for the supply of the election campaign materials.

kuala berang by-election 260804 elegant advisory posters The materials include posters, banners, buntings, flags, souvenirs, mineral waters and other transportation 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.

Umno treasurer Abdul Azim was named as the sole defendant on behalf of the party in the suit filed through Elegant Advisory's counsel, Termizi & Co.

kuala berang by-election 260804 elegant advisory closeup 01 The statement of claim stated that in March 2004, Elegant Advisory had supplied the campaign materials to Umno on its request and order as 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.

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

The suppliers named by Elegant Advisory include Percetakan Rina Sdn Bhd, Setia Kawan Printers Sdn Bhd, Art Printing Works Sdn Bhd and NHK Transport & Warehouse Sdn Bhd

elegant advisory receipt of deliver to umno division in kelantan during 2004 election 110808 Elegant Advisory said Umno had acknowledged the receipt of the campaign materials by stamping the party's official seal on all its delivery orders and has not objected to the supply of the campaign materials.

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

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

'No reasonable amount' offered

Elegant Advisory said its invoices claiming for the cost of the campaign materials after the election were not entertained by the ruling party.

The company had sent two invoices - one for RM170,843,475 and another for RM47,170,000.

Unhappy with the inaction, Elegant Advisory wrote to Umno on May 2004 demanding for the outstanding payment to be settled.

The company revealed that Umno had tried to settle the matter once by requesting a meeting with Elegant Advisory in September 2006.

The effort however failed as "no reasonable amount" was offered.

Elegant Advisory said it has also tried to contact Umno numerous times later to settle the matter, including sending e-mails to Prime Minister Abdullah Ahmad Badawi through his website, but to no avail.

The company claimed as a result of the unsettled payment, it has suffered losses and jeopardised its business reputation among its suppliers.

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