Shearn Delamore & Co updates

Federal Court reinforces law that supervisory courts may review arbitral awards
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • October 19 2017

The Federal Court recently delivered its decision in a dispute involving the Laotian government and two foreign companies. The dispute related to the termination of a project development agreement and was set to be resolved by arbitration. Dissatisfied with the arbitration award, the Laotian government applied to the High Court to set aside the award on the ground that the arbitral tribunal had gone beyond the scope of arbitration.

Changes to National Cabotage Policy
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • August 09 2017

The prime minister recently proposed that Sabah, Sarawak and Labuan be exempted from the National Cabotage Policy, which governs maritime transport between Peninsular Malaysia and East Malaysia, effective June 1 2017. Under the proposal, foreign ships can transport cargo domestically. This announcement attracted differing opinions regarding its possible impact.

High court clarifies proceedings under Arbitration Act
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • July 13 2017

The high court recently held that resisting an application for an interlocutory injunction is not a 'step in the proceedings'. The only steps that amount to a step in the proceedings under Section 10 of the Arbitration Act are those taken to advance the substantive dispute in the action. Parties' compliance with court directions will not constitute steps to advance the dispute.

Federal Court clarifies statutory rights granted by Advocates Ordinance
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • July 06 2017

The Federal Court recently held that Sections 2(1)(a) and (b) of the Advocates Ordinance must be read with Section 8. The statutory right given to advocates admitted in Sabah to practise in Sabah by virtue of Section 8(1) of the Advocates Ordinance cannot be taken away by tying the non-exclusive right of barristers and solicitors in England to appear for parties in arbitration proceedings with the practice in Sabah.

Damages under marine cargo all-risk insurance policy
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • April 19 2017

A court recently considered an insurance claim under a marine cargo all-risk insurance policy for damages to a ship unloader crane that had occurred while it was being unloaded onto a barge at West Port, Port Klang. The court ultimately found that the plaintiffs had proven their case on the balance of probability and granted their claim for RM4.5 million, with costs.

High court gives effect to parties' intentions in face of ambiguously drafted clauses
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • March 30 2017

In a recent case, the plaintiff opposed the defendant's stay application on the basis that, among other things, the ambit of the arbitration clause was confined to disputes arising before and during the completion of the work. The contract did not provide for disputes after completion of the work to be referred to arbitration. Despite the ambiguous clauses, the court upheld the arbitration clause to give effect to the parties' intentions.

Court rules on payment for bunkers
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • January 18 2017

In a recent high court case, the plaintiff's notice of lien stipulated that it had exercised a lien over the bunkers, and that the defendants should pay the plaintiff and not the second intervener. The defendants applied to set aside or strike out the plaintiff's subsequent in rem action, as they had no contractual nexus with the plaintiff for the purchase and supply of the bunkers. The court held that since there was no direct contract between the plaintiff and the defendants, a contractual lien did not arise.

Malaysian courts continue to give effect to arbitration agreements
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • January 12 2017

A high court recently granted an order approving the defendant's application to stay the court proceedings and have the dispute referred to arbitration pursuant to the Arbitration Act 2005, finding that the plaintiff had, through its conduct, demonstrated that it intended to refer the dispute to arbitration. This case demonstrates the Malaysian courts continued attempts to give effect to arbitration agreements and to discount attempts to renege on agreements to arbitrate by relying on technical objections.

Federal Court rules venue of arbitration is proper seat
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • October 06 2016

The Federal Court recently ruled in a case involving an arbitration agreement within a production sharing contract. The court held that the term 'venue' was more than a mere reference to the geographical or physical seat and in this respect could be construed as the seat of arbitration. The court also held that the Supreme Court of India's earlier ruling did not bind the parties, as a decision issued by a court without jurisdiction does not give rise to res judicata.

Court of Appeal rules on limitation clauses
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • September 21 2016

The Court of Appeal recently reviewed a high court decision which had dismissed an application by the first defendant for determination of a preliminary issue. The Court of Appeal had to consider whether the limitation period in the bill of lading, as provided for in the Hague Rules, was contrary to Section 29 of the Contracts Act 1950 and whether an earlier Court of Appeal decision was binding on the high court.

When can arbitral awards be set aside based on excess of jurisdiction and public policy?
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • May 19 2016

A recent high court decision has set out clear parameters within which an arbitral award can be set aside as a result of an arbitral tribunal acting in excess of its jurisdiction and on the grounds of public policy. The court clarified that an award will be set aside on the basis of public policy only if it causes "actual prejudice" or offends the "fundamental principles of justice and morality".

Floating charges on the high seas
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • May 11 2016

The courts recently dealt with a case involving competing claims for the vessel Safir Kish 4. After hearing extensive arguments over which party had priority over the ship, the court found the registration and transfer of the ship from the shipbuilder to the first defendant to be null and void. As such, the court ordered the ship to be retransferred and reregistered in the shipbuilder's name.

Court rules on incorporation of arbitration clauses in commercial contracts
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • March 03 2016

The Court of Appeal recently held that general words are sufficient for the incorporation of arbitration clauses by way of reference, emphasising the importance of arbitration clauses in commercial contracts and the need to give business efficacy to commercial arrangements. Given the widespread use of arbitration clauses in commercial contracts, this is a welcome decision.

High Court rules on liability for loss of cargo
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • January 06 2016

A recent case before the High Court in Kuala Lumpur concerned the loss of cargo delivered from Indonesia to Saudi Arabia. The plaintiff shipper brought the claim against the non-vessel owning common carrier for acting in breach of contract as carrier or duty of care as bailee under the terms of the bill of lading by releasing the shipper's cargo without due production of the original house bills of lading.

Court cannot rule on validity and correctness of foreign arbitral awards
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • September 10 2015

The Malaya High Court recently considered the recognition and enforcement of four Australian awards by a sole Australian arbitrator. The court held that it had no supervisory jurisdiction or power under the Arbitration Act 2005 to inquire into the validity and correctness of awards. In any event, the defendant should have applied to the Australian courts to challenge and review the validity and correctness of the awards.

High Court rules on unpleaded claims during arbitral proceedings
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • August 27 2015

The Malaya High Court recently considered awards rendered by arbitral tribunals which the parties neither claimed nor pleaded in the arbitral proceedings. The court found that the arbitral tribunal in the case at hand had exceeded its jurisdiction by rendering an award in respect of a matter not claimed or pleaded by the parties and thus amended the award accordingly.

High Court rules on admiralty jurisdiction
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • July 29 2015

The plaintiff in a recent High Court case brought an in rem action against the owners of four vessels for wrongful occupation of its lay-up site and trespassing. The defendants applied to strike out the action, contending that the plaintiff's claim did not fall within the High Court's admiralty jurisdiction. As the plaintiff failed to prove that its claim fell squarely within the court's admiralty jurisdiction, the court struck out the claim with costs.

Court rules on use of plural writs
Shearn Delamore & Co
  • Shipping & Transport
  • Malaysia
  • July 15 2015

The plaintiff in a recent case commenced admiralty proceedings against two vessels for unpaid bunkers supplied to those vessels. After both vessels were arrested, the defendant contended that the arrests were flawed, as the plaintiff had not applied to strike out the other vessel from the plural writ after the first vessel was arrested. The court rejected the defendant's argument, holding that the plaintiff need not strike out the other vessel named in the plural writ.

Can an appointment by an appointing authority be challenged?
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • June 18 2015

The Court of Appeal recently considered whether the appointment of an arbitrator by an appointing authority can be challenged and, if so, on what basis. The court highlighted that a proper challenge to the appointment of an arbitrator should stem from the Arbitration Act. Further, if an arbitrator needs special knowledge or expertise, this should be made clear to the appointing authority before appointment.

Court rules on limitation periods for arbitral awards
Shearn Delamore & Co
  • Arbitration & ADR
  • Malaysia
  • April 02 2015

The Federal Court recently considered the applicable limitation periods in respect of the registration and enforcement of arbitral awards. The court concluded that two separate limitation periods apply to arbitral awards from countries which are signatories to the New York Convention. The first is a six-year period for registration and the second is a 12-year period for enforcement.

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