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Impact of recent judicial reforms - International Law Office

International Law Office

Litigation - Malaysia

Impact of recent judicial reforms

April 20 2010


Recent reforms in the Malaysian judiciary have seen marked improvements in the pace of judicial work in Malaysia. However, the changes have come at a price: practitioners have found it difficult to manage the rate and volume of activity that the changes have produced and litigants have found it difficult to cope with the rigid timelines which have been imposed for pre-trial case management. This update examines the implications and consequences of the reformed system and its impact on those doing or intending to do business in Malaysia.

Thirty years ago, Malaysia boasted a judicial system that was superior to many in the region. However, all of that changed after the recession of the late 1980s and the judicial crises that followed in 1988 and 1989. After years of public pressure and international criticism, the government has finally realized the importance of a strong and efficient judicial system to the economic and social wellbeing of the nation - factors which directly impact on Kuala Lumpur being chosen as an attractive destination for investment and human capital development.

The appointment on October 18 2008 of Chief Justice Tun Zaki Tun Azmi - initially seen as a purely political appointment - has proven to be a welcome move. He soon introduced wide and sweeping changes to the judicial environment. In a short time the courts reintroduced the pre-trial case management regime that has gained popularity throughout the commonwealth as a result of the Woolf reforms in England and Wales. Efforts to computerize the courts and to streamline procedures followed soon after. Moves are currently in the pipeline to consolidate the Rules of Court into a single set of comprehensive and updated rules, together with efforts to set up specialized courts.

Changes have also been observed in the move towards making Malaysia a more arbitration-friendly destination with the passing of the Arbitration Act 2005, which came into effect in March 2006, and in several pro-arbitration decisions of the courts. Of particular note are the decisions in Aras Jalinan Sdn Bhd v Tipco Asphalt Public Company ([2008] 5 CLJ 654) and Innotec Asia Pacific Sdn Bhd v Innotec GmbH ([2007] 8 CLJ 304). The Kuala Lumpur Regional Centre for Arbitration is also set for dynamic change and restructuring under the newly appointed director, Mr Sundrarajoo, a seasoned chartered arbitrator and one of the prime movers behind the new Arbitration Act.

In addition, the chief justice has created a new set of specialized commercial courts known as the New Commercial Courts, which will hear and determine all business disputes that are filed after September 1 2009. The new commercial courtrooms are presided over by judges who are largely taken from commercial practice or from the ranks of senior lawyers from the Attorney General's Chambers with wide experience and knowledge in commercial issues. The New Commercial Courts will undertake to:

  • set targets for disposal of cases by taking charge of the management of cases soon after filing;
  • reduce waiting periods by fixing early hearing dates and being strict on applications for adjournment; and
  • go digital from registration to hearings in order to increase efficiency and effectiveness.

On January 6 2009 the Judicial Appointments Commission Act 2009 received royal assent in tandem with the Malaysian Anti-corruption Commission Act 2009. The Judicial Appointments Commission will now oversee and supervise the appointment of judges so that judicial appointments are no longer seen as a quid pro quo for service to the government.

In theory, the changes are welcome and long overdue. However, change is not always well received. Lawyers and litigants alike have come under increased pressure to get on with cases. Timelines to get cases ready for trial are becoming increasingly short, and judges, under tremendous pressure to meet key performance indicators, have seemed in some cases to be willing to sacrifice justice at the altar of expedience. Concerns have also been expressed that the Judicial Appointments Commission may be a lame duck because the prime minister continues to retain absolute discretion over the appointment of judges and may in theory decline to follow recommendations made to him.

Overall, the changes to the judicial environment will in time prove good for business, the rule of law and the development of the economy, but many issues of abiding concern remain that will need to be addressed.

In the meantime, litigants can expect cases to be resolved within 18 to 24 months of filing in case of trials, and within six months in case of interlocutory applications. This is a far cry from the several years that such cases would have taken in years gone by.

For further information on this topic please contact Nahendran Navaratnam or Wong Wye Wah at Kadir Andri & Partners by telephone (+603 2078 2888), fax (+603 2078 8431) or email (nn@kaaplaw.com or wyewah@kaaplaw.com).


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