TUTORIAL QUESTION

(a) AMAZING BHD (AMAZING) is a public listed company providing an online platform (e-
commerce marketplace) which allows third-party sellers to sell new and used products
through AMAZING’s websites, AMAZE.com. AMAZING was established in 2017 by Ali,
Kamal, and Dian, who are also the directors and shareholders of the company. AMAZE.
com sells variety of product lines including health and beauty products, baby products,
hardware, computers, clothing, books and many more. Based on a series of agreements
between AMAZING and third-party sellers (Merchant Agreements), AMAZING will only
operate as a marketplace and will not sell its own products competing with third party
sellers either through its website, AMAZE.com or through brick-and-mortar store.

In 2019, AMAZING established a wholly-owned subsidiary company, AWESOME Sdn Bhd

to operate a brick-and-mortar store, selling health and beauty products under a brand
name, H&B, in competition with other third-party sellers using AMAZE.com. The H&B
store is operating in a premise belongs to AMAZING. Ali, Kamal and Dian are sitting in the
board of directors of AWESOME and in fact, the manager and most of the employees
working in H&B store were appointed by AMAZING.

In 2020, AMAZING teamed up with a data analytical company, AI-CPT to form a joint
venture company, AMDA Sdn Bhd (AMDA). The principal activity of AMDA is to analyze
data on consumers’ preference and behavior while transacting via AMAZE.com using a
specialized algorithm and sell the data to third-party sellers and advertisers. Based on a
joint agreement between AMAZING and AI-CPT (JV Agreement), AMAZING owns 49%
shares in AMDA together with the right to appoint and remove the board of directors,
while AI-CPT owns 51% shares in AMDA.

Several third-party sellers using AMAZE.com are planning to sue AMAZING for breach of
contract (Merchant Agreements) by opening up a brick-and-mortar store in competition
with third-party sellers. They also want to name AWESOME Sdn Bhd and the board of
 directors of AMAZING as the second and third defendant respectively. AMAZING denies
any breach of contract with third-party sellers as according to AMAZING, the offline store,
H&B, is operated by its subsidiary, AWESOME. In the same time, the Consumer
Association of Malaysia is suing AMDA for illegally collecting and processing data on
consumers without explicit consent from the consumers, in breach of data protection law.
The DPA also considers taking action against AMAZING and AI-CPT as the parent
companies for AMDA. Advise the relevant parties.

(15 marks)

(b) Prior to the incorporation of AMAZING, Kamal who is responsible to develop the
company’s business model had engaged Arif, a postgraduate student in IT to help design
a specialized website to operate a marketplace. Kamal informed Arif that the payment
will be made by AMAZING once the company was incorporated. The payment is due for
many years and Arif seeks a legal action against AMAZING. AMAZING denies liability and
argues that the company was not in existence at the time Kamal and Arif made such
arrangement. Advise Arif whether he can proceed to sue AMAZING for the payment due.

(5 marks)