PUTRAJAYA: The Federal Court has been told that the High Court's decision ordering former Ampang MP Datuk Zuraida Kamaruddin to pay RM10mil to PKR for breaching a bond with the party was reasonable.
PKR counsel Ranjit Singh submitted that there was an admission of fact that RM10mil, or a sum exceeding that amount, had been expended on Zuraida.
"Zuraida admitted that the value conferred upon her exceeded RM10mil, while the operative clause fixed RM10mil as the sum payable upon the occurrence of the stipulated events," he said during PKR's appeal against a Court of Appeal decision reducing the bond payment from RM10mil to RM100,000.
Ranjit submitted that the appeal ultimately turned on the legal consequence of a contractual admission of value where Section 75 of the Contracts Act is invoked.
"The recital recorded Zuraida's admission that the value conferred upon her exceeded RM10mil. Section 75 remains the statutory control against penal, oppressive or unconscionable stipulations. But it must be applied to the contract as it stands, including the facts contractually admitted by the parties," he said.
The counsel submitted that although the bond was contractual in nature, it had been executed against the backdrop of the country's political landscape at the time, when political coalitions were prevalent and party-hopping had become a scourge, amid concerns that it could lead to the collapse of governments.
"One must read the bond in a manner that explains why the sum of RM10mil was stipulated, which at first glance may appear excessive. But the reality is, look at what happened. The Sheraton Move led to the collapse of the Pakatan Harapan coalition at Federal level," he said.
Meanwhile, Zuraida's counsel Tan Sri Azhar Azizan Harun contended that there was no separate or special category of "political contract" that stood exempt from Section 75 of the Contracts Act.
"The party cannot use its status and position as a political party to bypass statutory protections against penalty clauses. Section 75 of the Act does not cease to apply merely because the contractual obligations arose in the context of a political party.
"To hold otherwise would create, by judicial implication, an exception to Section 75. This court should not countenance such an approach," said Azhar Azizan, who was assisted by counsel Nizamuddin Hamid.
Azhar said the relationship between a political party and its candidate was, in practical terms, institutional in nature. The individual candidate lacked equal legal bargaining power when negotiating the quantum of a unilateral bond imposed as the condition or price of candidacy.
"This unequal bargaining power is not dependent on the candidate's seniority or position in the party. The bond demonstrates that it was not an individually negotiated agreement in which the respondent freely negotiated and agreed that RM10mil represented a reasonable measure of compensation in the event of default.
"It was imposed on the respondent by the party," he said, adding that the RM100,000 imposed by the Court of Appeal was reasonable.
After hearing submissions from both parties, the three-member bench, chaired by Chief Justice Tun Wan Ahmad Farid Wan Salleh and comprising Chief Judge of Sabah and Sarawak Datuk Azizah Nawawi and Federal Court Judge Datuk Azmi Ariffin, reserved its decision for a date to be scheduled later.
On June 24, 2025, the Federal Court granted PKR leave to appeal the matter.
This followed the Court of Appeal's decision on Dec 11, 2024, when a three-member panel upheld the High Court's finding that Zuraida had breached the bond, but reduced the quantum payable from RM10mil to RM100,000.
The Court of Appeal's ruling came after the High Court in Kuala Lumpur, on June 23, 2023, ruled in favour of PKR and ordered Zuraida to pay RM10mil in accordance with the bond's terms. The presiding judge, Datuk Akhtar Tahir, held that the bond was a valid and binding contract.
The lawsuit had been initiated in 2020 by PKR secretary-general Datuk Seri Saifuddin Nasution Ismail on behalf of the party, claiming that Zuraida had violated the terms of a bond she signed before contesting in the 14th General Election in 2018.
Under the bond, Zuraida, a former Housing and Local Government Minister, was required to pay PKR RM10mil within seven days if she resigned from the party, joined another political party, or became an independent representative after being elected on the party's ticket. – Bernama
