What led to the RM3.89 million damages award to the security firm?

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Security Firm Awarded Nearly RM4 Million in Damages After Unjustified Termination by Nestle

The Shah Alam High Court ordered Nestle Products Sdn Bhd and Nestle Manufacturing (Malaysia) Sdn Bhd to pay nearly RM4 million in damages to Uppal Aimed Guard Security Sdn Bhd due to an unjustified termination of their security services agreement. Justice Shoba Rajah Dorai Rajah ruled that Nestle unlawfully terminated the contract, leading to the award of RM3,891,744.42 in damages, RM30,000 in exemplary damages, and RM50,000 in costs.
Allegations of Unlawful Termination and Bad Faith

Uppal Aimed Guard Security contended that Nestle’s termination of their services was unlawful and carried out in bad faith. The security firm entered into an agreement on July 25, 2022, to provide guards at five Nestle premises starting August 1, 2022. The dispute escalated when, on August 16, 2022, Nestle allegedly requested the replacement of experienced Nepali guards with new foreign workers, claiming they would be easier to manage. Uppal Aimed Guard Security complied, supplying new guards, even though two were awaiting work permit approval, a fact they informed Nestle about.
Nestle's Actions Following Guard Replacements

Following the replacement of guards, Nestle reportedly claimed the new personnel lacked valid work permits. This led to Nestle suspending services at the Bandar Utama site and barring the guards from the premises. Despite Uppal Aimed Guard Security offering to replace the guards, Nestle rejected the proposal. Subsequently, on November 7, 2022, Nestle issued an immediate termination of services at the Bandar Utama site and a three-month notice for the remaining four premises, citing a breach of contract.
Dispute Over Immigration Status and Contractual Provisions

The security firm argued that the termination was based on incorrect allegations regarding the guards' immigration status, as all three guards later obtained valid work permits retrospectively, and Nestle was aware of the ongoing immigration process. Furthermore, Uppal Aimed Guard Security claimed that Nestle failed to adhere to the agreement's dispute resolution and cure provisions, which require prior notice and an opportunity to rectify any alleged breach before termination. Nestle, however, maintained that the termination was valid due to the workers allegedly not possessing a valid Visit Pass (Temporary Employment).

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What led to the RM3.89 million damages award to the security firm?

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