Malaysia witnessed considerable developments in statutory adjudication case law in 2017, probably due to the increasing use of this form of dispute resolution mechanism by stakeholders in the construction industry. This update examines some of the significant decisions that were handed down by the Malaysian courts in 2017 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.
The Malaysian Aviation Commission (MAVCOM) Act 2015 enables MAVCOM to serve as the economic regulator for civil aviation in Malaysia, with the goal of promoting a commercially viable, consumer-oriented and resilient civil aviation industry which supports the nation's economic growth. The first amendment to the act recently came into force. Among other things, it makes changes to the definition of 'air traffic right', expands MAVCOM's powers and imposes financial penalties.
The Court of Appeal recently considered whether a pay-when-paid clause in a construction contract is void under the Construction Industry Payment and Adjudication Act. It found that pay-when-paid clauses under a construction contract drawn up before the enactment of the Construction Industry Payment and Adjudication Act will remain valid and not be affected by the introduction of Section 35, which prohibits any conditional payment clauses in construction contracts.
As air travel becomes more accessible to the public, especially with the proliferation of low-cost travel options, the issue of safeguarding consumers' interests has attracted increasing attention. The government has chosen to regulate airline service standards by introducing the Malaysian Aviation Consumer Protection Code. The code aims to strike the right balance between protecting passengers and industry competitiveness.
The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.
The Construction Industry Payment and Adjudication Act 2012 came into effect on April 15 2014. Since then, the Malaysian courts have had the opportunity to consider various aspects of the act on numerous occasions. Some significant decisions have been handed down by the courts in the past two-and-a-half years and although statutory adjudication in Malaysia is still in its infancy, it is evident that a body of local decisions is steadily being built up to assist in the interpretation of the act.
The new Financial Services Act is the culmination of the government's efforts to modernise and harmonise the laws that govern the financial services sector in Malaysia. While the principal regulatory objectives of the new act are to promote financial stability and protect the rights and interests of consumers of financial services and products, the act also offers more extensive regulation on the shareholding of licensed persons.
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 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.
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.
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.
Recovering pure economic loss in negligence is a difficult and complex area of law, and developing this area in Malaysia has been a prolonged and sometimes difficult process. In recent years the courts have delivered a series of judgments in construction cases indicating the approach to be taken.
The recent decision in Tan Tien Seng v Grobina Sdn Bhd is significant for both property purchasers and developers, as it limits the circumstances in which a developer may make changes to or deviations from building plans without the purchaser's consent.
Standard form contracts are often used to in order to save time and money instead of drafting a fresh construction contract for each new project. Familiarity with the available standard forms and types of construction contract enables prudent employers to ensure that they achieve the appropriate contractual framework for the physical execution of their needs.
In Pernas Construction Sdn Bhd v Syarikat Rasabina Sdn Bhd a majority of the Malaysian Court of Appeal upheld the decision of the Kuala Lumpur High Court. The majority found that the plaintiff was forced or coerced into signing the mutual termination agreement despite the absence of any contention to that effect in the pleadings or evidence before the High Court.
In Ekovest-KMZ-Dragages Sdn Bhd v HSBC Bank Malaysia the Kuala Lumpur High Court considered an application for an interim injunction to restrain payment under a performance bond where the beneficiary had yet to make any demand under the bond.
In the first Malaysian case to deal with cybersquatting, a World Intellectual Property Organization panel transferred a registered domain name to a law firm. The issues of verifying a registrant's information and the incidence of bad faith are considered.