THE UPDATE SCOOP (#11/2025) – Tay & Helen Wong Law Practice

Exemplary Damages against TNB for Wrongful Disconnection of Power Supply | Assessment of Damages

By TAY & HELEN WONG – 15 October, 2025

In Big Man Management Sdn Bhd v Tenaga Nasional Berhad [2025], our sole national electricity supplier, TNB was found liable for disconnecting the electricity supply to the plaintiff’s premises of an ice-making factory. TNB inspected premises and found meter tampering and rectification work was carried out. Notices were given and two disconnections of electricity were carried out. The courts held that the disconnections were wrong and TNB was liable. The appeal at the Federal Court was in respect of the damages awarded.

First was on special damages. With reference to the phrase “special damages must be specifically pleaded and strictly proven”, it did not denote that evidence was bound to be adduced to a greater degree than the balance of probabilities. Special damages in a civil claim was needed to be established on a balance of probabilities. The term “strictly proved” did not increase such evidentiary burden in any manner otherwise than to require that it met the usual civil standard of proof. The causal link between the acts of the wrongdoer and the damages claimed has been established as the disconnection of the electricity supply resulted in the factory not able to manufacture ice. Therefore, the plaintiff had discharged the burden of proof in relation to its claim for special damages.

Second was on exemplary damages. “Exemplary damages” or “punitive damages” are awarded not to compensate the plaintiff for any loss but rather to punish the defendant for his deliberate wrongdoing. The apex court acknowledged the legal position common in UK, Australia and India that award of exemplary damages was generally not available for a case of breach of contract whilst Singapore and Canada allowed such award albeit limitedly. The court did not think that an expansion of the law for exemplary damages to be available in cases of breach of contract was warranted at this jucture. In the instant case, however, on the facts, the plaintiff’s Statement of Claim disclosed a valid cause of action premised on a breach of a statutory duty, namely the duty to provide electricity to consumers under s.24 of the Electricity Supply Act 1990 (the ESA). That duty was breached when that supply was unlawfully disconnected by TNB. As a cause of action based on statutory breach subsisted, a claim for exemplary damages in contract was not the only option available to the plaintiff; and the court could consider the possibility of awarding exemplary damages.

In the mind of the judges, TNB had conducted itself in a manner which was gravely improper and excessive in disconnecting the plaintiff’s electricity supply :

(a) the position of TNB as the sole supplier of electricity in Malaysia put it in a position superior to that of the consumer, the plaintiff, which afforded TNB the capacity to abuse its position;

(b) this was “a statutorily regulated relationship arising from the statutorily accorded monopolistic right” to TNB, the sole licensee for the supply of electricity;

(d) the fact that the first disconnection was for a maximum duration, not normally imposed on a first disconnection, warranted the inference that the disconnection was delayed deliberately;

(e) the notices of claim for the arrears of monies claimed by TNB were followed by the disconnections, again, warranting the inference that the electricity supply would be discontinued or disrupted unless the monies claimed by TNB were paid up. This was not the legitimate or valid purpose for disconnection of the electricity supply, which again showed a collateral aim which was not supported in law; and

(f) TNB knew or ought to have known that a disconnection of electricity supply to a manufacturer or generator of ice would give rise to great loss and damage to the business, as electricity was the life-blood of such a business. Notwithstanding this, it proceeded with the disconnections, with a view to putting pressure on the plaintiff to make payment for the arrears it claimed. This was not a lawful method of collecting its debts.

Therefore, the conduct of TNB warranted an inference of mala fides, a fit case for the award of exemplary damages to the plaintiff. The primary purpose was to communicate to TNB that it owed a statutory duty to consumers to provide undisrupted electricity as stipulated under the ESA. The established basis for the collection of arrears was to do so as a debt; and TNB could not be allowed to hold electricity to consumers as ransom.

The court however rejected the High Court’s formulaic approach of awarding 25% of special damages as exemplary damages and instead held that a sum of RM100,000 was appropriate to show the court’s disapproval of TNB’s conduct.

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Tags: [wrongful disconnection of electricity] [special damages to be strictly proved] [exemplary damages in breach of contract cases]