Search terms: Malaysia
Including: Arbitral Regime; Advantages of Arbitration; Drafting Arbitration Agreements; Separability of Arbitration Clauses; Stay of Proceedings; Selection of Arbitral Tribunal; Qualification of an Arbitrator; Preliminary Relief and Interim Measures; Evidentiary Matters; Discovery; Damages; Arbitral Awards; Stating the Case; Setting Aside of Arbitral Awards; Enforcement of Arbitral Awards.
The Putrajaya Federal Court recently analysed a technical services agreement between two parties in order to determine what constitutes an agreement to arbitrate. The court recognised that there should be minimal interference with parties seeking to have their dispute arbitrated, but that clear terms and written evidence of an agreement to arbitrate were a requirement for the grant of a stay.
An arbitral award was recently set aside by the Kuala Lumpur High Court after it found that the arbitrator could not be said to be impartial. The sole arbitrator had signed a statement of independence before being appointed, declaring his impartiality and independence, but failed to disclose the fact that he later became a director of the bank that had financed the joint venture between the parties.
The Federal Court recently upheld an arbitral award that had been granted following a dispute over a production sharing contract. The court decided against setting aside the award, but held that if the award had been tainted with illegality, it could have been set aside on the grounds that an error of law has been committed. The court also held that all matters regarding the construction of a document are questions of law.
In Sabah in East Malaysia, no one can practise as an advocate or solicitor unless his or her name is on the roll and he or she has a valid practising certificate with authorisation to act in such role. This would ordinarily be of little interest to the international arbitration community, but in a recent case the Sabah courts construed it to mean that foreign lawyers were barred from appearing as counsel in arbitral proceedings.
Sections 38 and 39 of the Arbitration Act 2005 empower the court to recognise and enforce an award from a foreign state. The Kuala Lumpur High Court recently had occasion to consider the exercise of this power. In its decision, the court held that there was no valid arbitration agreement from which the arbitral tribunal could validly render an award and refused to recognise and enforce the arbitral awards.
In a recent decision the High Court confirmed that the Arbitration Act places a discretionary, not obligatory, requirement on the court regarding the 90-day timeframe for filing an application to set aside an arbitral award. The court thus retains some degree of discretion to extend this timeframe where circumstances so require.
Including: Legislative Framework; Financial Stability
Amendments have been made to both Schedule 1 and Schedule 2 of the Anti-Money Laundering Act 2001 to increase the types of institution covered by the act, as well as the number of offences. Over 1,300 suspicious transactions have so far been reported under the act, but there have been no prosecutions.
The introduction of the Payment Systems Act 2003 is in line with recommendations in the Financial Sector Master Plan, which include the adoption of a flexible, proactive and effective regulatory framework to oversee the payments system and improve its efficiency.
In its Annual Report 2002 the Central Bank of Malaysia announced that the exchange controls regulations have been liberalized in an effort to complement and boost other macro-economic initiatives and stimulate the economy, particularly domestic growth and foreign direct investment.
The Malaysian Ministry of Finance recently published its 2002/2003 Economic Report assessing the performance and prospects of the Malaysian economy. Generally, the domestic banking sector has recovered well from the economic crisis. Monetary policy for 2003 is likely to focus on supporting private sector initiatives, dynamism and growth to further accelerate the economy's recovery.
Islamic banking in Malaysia is set to expand on a global basis as the Central Bank of Malaysia formulates policies and measures to increase the capacity and capability of Islamic banking players.
The Capital Markets and Services (Amendment) Act 2011 recently became law. The amended act streamlines certain administrative procedures in the act and confers greater regulatory powers on the Securities Commission. It also introduces new provisions on systemic risks and private retirement schemes.
Since the introduction of a materiality threshold in the Kuala Lumpur Stock Exchange listing requirements, listed companies have more scope and discretion as to whether to disclose a transaction. However, companies are still advised to err on the side of caution. Where the materiality of a transaction is debatable, it would be prudent for a company to make a disclosure.
After a shaky start, the Malaysian Exchange of Securities Dealing and Automated Quotation (MESDAQ) may well now be a viable option for the financing needs of technology or high-growth companies that have credible five-year business plans but no profit track record.
As asset securitization is a relatively new financing concept, it will be some time before such mode of financing is fully developed in Malaysia. However, it is important that all relevant authorities and bodies keep abreast of the developments in this area in order to reap the benefits.
The Securities Commission has increased the minimum paid-up capital requirements for companies listed on the Kuala Lumpur Stock Exchange and announced that proceeds from private debt securities issues can be used to finance the development of residential properties priced over M$250,000 per unit.
The Securities Commission has introduced a number of flexibilities to its guidelines with the aim of helping companies seeking to list via initial public offerings, raise funds and restructure due to capital markets conditions. Preliminary industry feedback welcomes the changes, but added effort must now come from the other capital markets participants.
In Malaysia, the power to convene an extraordinary general meeting (EGM) ordinarily rests with the company directors. The members themselves do not have a common law right to compel the directors to convene an EGM. However, Sections 144, 145 and 150 of the Companies Act 1965 provide mechanisms for members to convene an EGM, to express their views about the management of the company.
Antitrust legislation recently found its way to Malaysia. In April 2010 Parliament passed the Competition Bill 2010. Once gazetted, it will be known as the Competition Act 2010. The new act is intended to prevent large companies from engaging in monopolistic and cartel activities and is in line with global trends to promote healthy competition among businesses for the ultimate benefit of consumers.
Including: Regulatory framework; Application of Takeover Code; Types of offer; Persons acting in concert; Takeover process; Terms; Consideration; Timing; Announcements; Disclosure of dealings; Post-bid matters; Other noteworthy matters.
As mergers and acquisitions are a daily occurrence in the Malaysian corporate sector, it is proposed that the government introduce a statutory framework for amalgamations in the forthcoming amendments to the Companies Act. Two forms of amalgamation procedure are offered that are free from judicial oversight: short-form amalgamation and long-form amalgamation.
The new Code on Takeovers and Mergers 2010 recently came into force, replacing the Code on Takeovers and Mergers 1998. At the same time, pursuant to Section 377 of the Capital Markets and Services Act 2007, the Securities Commission issued practice notes on the new code and Guidelines on Contents of Applications relating to Takeovers and Mergers. The new code introduces a number of salient changes.
Including: Enforceability; Offer and Acceptance; Revocation; Evidence of a Contract; Digital Signatures; Borderless Transactions; Payment
The number of internet users in Malaysia is expected to grow by 25% to over 3 million, accounting for more than 40% of the Malaysian population by 2004. In light of this fact, the minister of energy, communications and multimedia has outlined key challenges for the year ahead.
The government has announced that the Electronic Transactions Bill and the Electronic Government Activities Bill will be tabled before Parliament next year. Both bills are intended to encourage domestic internet users to conduct business online and allay concerns that existing laws do not address unique legal issues arising from electronic transactions.
It is apparent that a uniform legislation on privacy regulating the collection, use, possession, processing and protection of information is necessary in order to address concerns that have arisen from the emergence of the digital economy.
ePerolehan is a system that provides online links between government agencies and their suppliers. The long-term objective of ePerolehan is to replicate its implementation in other countries.
While the Internet cannot be censored as such, the individuals responsible for placing illegal content on the Internet remain liable. The Malaysian internet industry is taking no chances. A forum has been established with the aim of drafting a Content Code, which is one of the voluntary industry codes recognized by the Communications and Multimedia Act.
The Central Bank has taken an active role in helping to minimize, if not eradicate, cyberlaundering, fraud and racketeering in Malaysia by issuing a regulatory framework entitled 'Minimum Guidelines on the Provision of Internet Banking Services'.
The advent of variable pay is fast becoming an important aspect of the attainment of sustainable remuneration in Malaysia. However, the challenge of such a wage environment is what happens when changes take place to operational parameters that affect employee returns in a variable pay situation. In two recent cases the courts clarified their position on this matter.
A recent Court of Appeal decision, which upheld a High Court ruling, highlights the status of trade union recognition in the context of mergers and the construction of vesting orders. The decision offers guidance on the standing of vesting orders and the effect of the transfer of assets and liabilities from a target company to a merged entity.
Including: New Legislation; Proposed Legislation; Current Law; The Future.
In continuing its efforts to strike a balance between protecting the interests of domestic manufacturers and providing incentives to foreign entities to invest in the local manufacturing industry, the government hopes to achieve its aim of increasing Malaysia's competitiveness and positioning it at the forefront of the IT industry.
Rapid technological development and the enactment of cyber-legislation have greatly impacted the information and communications sector. Now the government is taking action to enhance and develop the postal services industry for the internet age.
In its efforts to promote the development of Malaysia into an IT hub, the government has granted a general exemption from the requirement of Foreign Investment Committee approval for companies that are eligible for Multimedia Super Corridor status.
Including: Introduction; The Layout Designs of Integrated Circuits Act; The Optical Discs Act; The Personal Data Protection Bill; Conclusion
The Court of Appeal has held that the receiver/manager of a company in liquidation is not obliged to submit accounts, documents, monies or other movable assets to the liquidator. However, a definitive ruling as to the true powers of a receiver/manager in such cases is nonetheless required.
The recent case of Ban Hin Lee Bank Berhad v Applied Magnetics (M) Sdn Bhd (In Liquidation) illustrates how an amendment to the Employment Act 1955 works to the advantage of unpaid employees in liquidation proceedings.
The domestic courts recently handed down significant decisions on insolvency matters including the sale of land by private treaty, the power of the courts to grant costs in winding-up proceedings and the procedure for taking action against a court-appointed provisional liquidator.
The Federal Court recently held that a receiver who is an agent of the company in receivership, and who holds a valid power of attorney conferred under a debenture created by the company, can sell land secured under the debenture by private treaty provided that the company is not in liquidation.
In a recent case, the appellant owned a patent related to the treatment of erectile disfunction. The respondent planned to manufacture a similar drug, and requested that the earlier patent be invalidated. However, shortly before the trial commenced, the appellant filed an application to amend the patent. The High Court dismissed the application, a decision which has now been affirmed by the Court of Appeal.
The Kuala Lumpur High Court recently ordered that a trademark for a rival bus company be deleted and cancelled from the Register of Trademarks. The court took the view that the respondent's trademark was identical to the applicant's trademark and could thus cause confusion in the minds of the public, as the trademarks were used in the same class, trade channels and target markets.
The Court of Appeal recently considered an appeal against a Kuala Lumpur High Court decision in relation to infringement of a patent for an alarm. The appellate court overturned the high court's decision on the issue of infringement but, with the parties' agreement, did not decide on the issue of the patent's validity. It has yet to provide its grounds for the decision.
In a recent decision the Court of Appeal upheld a High Court ruling for a drug-related patent infringement. At both High Court and appellate court level, the appellant's request to invalidate two of the 29 claims in the respondent's patent for the creation of losartan potassium was dismissed. The respondent's counterclaim that the appellant, to which it had granted no rights under the patent, had infringed the two claims was upheld.
In a recent case in the car industry, the plaintiff instituted an action against the defendant for supplying counterfeit spare parts. The court allowed the plaintiff's claim and held that liability for trademark infringement is strict. It was not necessary for the plaintiff to prove that the defendant had knowledge that the spare parts supplied were counterfeit or that it had intended to supply counterfeit goods.
The Federal Court of Malaysia (the final appellate court in the country) recently held that the effective date of use of a trademark by a licensee can pre-date the date on which the licensee became a registered user. The court argued that the registration of a registered user commences not from the date of registration as a registered user, but from the commencement date of the licence.
The Kuala Lumpur High Court recently recognised that the test for striking out a case for want of prosecution has changed following the Woolf Reforms. Confirming a previous judgment, the judge held that the court had jurisdiction to strike out for want of prosecution for any justifiable reason within the norms of procedural jurisprudence and practice. Nonetheless, the court expects diligent adherence to prescribed schedules.
Malaysian courts are becoming increasingly proactive in suggesting methods by which disputes can be dealt with more efficiently and expeditiously. The Court of Appeal recently upheld a decision in which a trial judge had proceeded to hear submissions and deliver a judgment at a trial without taking evidence. The case demonstrated the great value derived from the recording of court proceedings.
A slew of both new legislation and amendments to existing legislation has recently emerged on the Malaysian legal landscape, including several changes to the rules on court procedure. Most notably, the different forms of originating process have been discarded in favour of either a writ action, involving a trial with oral evidence, or an originating summons action, involving evidence by affidavit only.
The Federal Court recently determined several interesting points of law in Ooi Woon Chee v Dato See Teow Chuan. The case arose after the liquidators received two offers for the sale of shares owned by Kian Joo Holdings Sdn Bhd. Among other things, the court held that although the liquidators were officers of the court, they were not bound by the same standards as a judge.
A recent High Court decision sounds a warning to insurance companies in respect of their duty to provide full disclosure when signing up policy holders to an insurance product. The case draws into sharp focus the care, responsibility and professionalism expected of insurance agents, especially when selling insurance products to long-term friends, as occurred here.
The Federal Court recently held that an adoption granted with the consent of one biological parent without the consent of the other was nonetheless valid. The appeal was dismissed with costs with the consolation that the biological father was restored to the birth register as the lawful father. However, the court is still reluctant to rule on the religious conversion of children.
Since becoming an international offshore financial centre in October 1990, Labuan has emerged as an alternative trade and finance hub in Asia Pacific. Dubbed 'Asia's best-kept investment secret', it was recently ranked by the Financial Stability Forum in Group Two of offshore financial centres alongside more established jurisdictions like Bermuda.
A Malaysian court recently examined liability for loss caused by the discharge or delivery of cargo without the production of original bills of lading. The court held that the act of discharging cargo belonging to the plaintiff into the hands of a third party at a different destination from that contracted for under the bill of lading was the cause of the loss. The defendant was found to have failed in carrying out its duties as bailee.
It is not uncommon for a bill of lading to have a pre-agreed stipulation that any dispute or claim arising out of the bill is to be brought before and determined by a foreign tribunal or court, known as a forum selection clause. Malaysian courts of first instance seized with jurisdiction over disputes between a shipper and a carrier have considered the application of such a pre-agreed forum selection clause.
The Court of Appeal recently ruled that an appeal by an owner in a collision action was allowed in part. The court overturned an earlier High Court decision that had held that the owner was not entitled to limit its liability for damage under Section 360 of the Merchant Shipping Ordinance. The appellate court held that the owner was liable in negligence but was granted limitation pursuant to the ordinance.
The Admiralty Court recently issued Practice Direction 1/2012 in relation to admiralty and maritime claims, which is to be followed in relation to admiralty and maritime matters at the high courts. The Kuala Lumpur Admiralty Court and the other high courts are to hear all matters pertaining to 'maritime claims', which are defined in detail in the practice direction.
There are two key items of Malaysian legislation that address marine pollution from ships - the Merchant Shipping (Oil Pollution) Act 1994 and the Merchant Shipping Ordinance 1952. Both were recently amended in order to bring domestic legislation into line with international conventions on the prevention of oil pollution.
The Arbitration (Amendment) Act 2011 was recently passed. This bill amends the Arbitration Act 2005 and empowers a Malaysian court that exercises admiralty jurisdiction to order the retention of vessels or the provision of security, pending the determination of arbitration proceedings related to admiralty disputes. The bill brings into force the amendments to Sections 10 and 11 of the 2005 act.
Including: Industry Consolidation; Applications Service Market; Resources.
The Communications and Multimedia Commission has commenced an analysis of telecommunications legislation. It has indicated that strategic issues will be presented to the industry for consultation before the consultation is finalized. The degree of consultation with the industry is in contrast to the previous regulatory regime.
Since the enactment of the Communications and Multimedia Act 1998, the telecommunications regulator has implemented initiatives to optimize the use of existing infrastructure by (i) requiring mobile telephone operators to provide a domestic roaming service between networks, and (ii) introducing a new universal service scheme.
The domestic communications industry is still in its infancy and, in time, market trends should identify quality of service (QOS) indicators and shape QOS standards. For the time being, however, the new minimalist mandatory standards which the Malaysian Communications and Multimedia Commission has introduced seem to suit industry needs very well.
It is hoped that a new consumer code will promote a high level of consumer confidence in the services delivered by the communications industry, protect consumer information and create an inexpensive dispute resolution process, in addition to providing compensation for consumers where appropriate.
The award of the third generation (3G) spectrum is to be announced shortly. New players in the form of mobile virtual network operators are expected to emerge and utilize other licensees' infrastructure to provide services.
Highlights of the latest developments from the Malaysian Communications and Multimedia Commission are the marketing plan for the assignment of spectrum for 3G networks and tariff rebalancing for fixed-line telephony.