Gan Partnership updates

Post-ASM: is an adjudication decision a disputed debt?
Gan Partnership
  • Litigation
  • Malaysia
  • 13 October 2020

In ASM Development (KL) Sdn Bhd v Econpile (M) Sdn Bhd, Darryl Goon J (now JCA) held that an adjudication decision, even one which has been enforced as if it were a court judgment or order pursuant to Section 28 of the Construction Industry Payment and Adjudication Act 2012, is still a disputable decision. While the high court departed from ASM in one recent case, in another, it agreed with Darryl Goon J's decision. As such, there now appears to be two different schools of thought on this matter.

From bare trustee to chargee: does registration of a charge assure an indefeasible interest?
Gan Partnership
  • Litigation
  • Malaysia
  • 06 October 2020

The concept of indefeasibility is the cornerstone of Peninsular Malaysia's land administration system, which is embodied in Section 340 of the National Land Code 1965. Once an interest is registered in the title of a property, it is immune against any adverse claims. While disputes on indefeasibility are not uncommon in Malaysia, the apex court recently faced another dispute involving the registered interest of a licensed financial institution and an unregistered interest of an owner.

CIPAA: court has no discretion to set aside adjudicator's costs order
Gan Partnership
  • Litigation
  • Malaysia
  • 15 September 2020

The Construction Industry Payment Adjudication Act 2012 (CIPAA) was enacted to alleviate payment problems in the construction industry by allowing any payment dispute to be resolved speedily through adjudication. However, the losing party may opt to set aside or stay an adjudication decision pursuant to Sections 15 and 16 of the CIPAA. In a recent case, a dilemma arose as to whether the costs determined by the adjudicator in withdrawing adjudication proceedings could be challenged in court.

Section 30 of CIPAA: apex court maintains mandatory direct payment obligation against employer under receivership
Gan Partnership
  • Litigation
  • Malaysia
  • 08 September 2020

Section 30 of the Construction Industry Payment and Adjudication Act 2012 creates a statutory obligation for a principal to make the payment awarded by an adjudication decision to a subcontractor in the event of the main contractor's failure to do so. In a recent case, an issue arose on whether direct payment could be ordered against a principal when winding-up proceedings against the main contractor were already afoot.

Apex court decides on validity and effects of retrospective sanction by liquidators
Gan Partnership
  • Litigation
  • Malaysia
  • 25 August 2020

When a company is wound up by a court order, a liquidator steps in and manages the company. It is enunciated in the Malaysian company law regime that the legal standing of such company to bring or proceed with an action or proceedings is vested in the liquidator. If an action or proceeding is taken by a wound-up company, the liquidator's prior sanction must be obtained. The apex court recently handed down a landmark judgment on the validity of retrospective sanction granted by liquidators.

Embassy dismisses employee: exercise of jure imperii or act of jure gestionis?
Gan Partnership
  • Litigation
  • Malaysia
  • 18 August 2020

In a recent case, a high court faced a judicial review application filed by the United States in Malaysia. The facts leading to the application were uncommon and the court considered a novel aspect of industrial law jurisprudence in Malaysia. The high court judge's assessment of the facts in light of the sovereign immunity principle gives a fresh perspective in industrial law jurisprudence.

Apex court rules that maintenance charges owed by parcel proprietors constitute unsecured debts
Gan Partnership
  • Litigation
  • Malaysia
  • 11 August 2020

As Section 77 of the Strata Management Act provides that the amount due to a management corporation (MC) is a 'guaranteed sum', issues arise as to whether an MC is a secured creditor in the event that a parcel proprietor is insolvent and wound up. In a recent decision, the Federal Court decided that the outstanding amount due to an MC is an unsecured debt.

Utility innovation infringement and invalidation disputes
Gan Partnership
  • Litigation
  • Malaysia
  • 04 August 2020

In general, when an individual asks "how can I protect my invention?", only one answer comes to mind: patents. While this is not wrong, most individuals are unaware of the patent's lesser-known sibling – the utility innovation. Utility innovations are commonly known as 'minor' or 'petty' patents. Much like patents, owners of a granted utility innovation have exclusive rights to exploit said utility innovation for 20 years. This article examines a recent case concerning a utility innovation.

Section 314 of Companies Act: court orders one-member extraordinary general meeting
Gan Partnership
  • Litigation
  • Malaysia
  • 21 July 2020

A high court recently allowed a shareholder to convene a one-member extraordinary general meeting of a family-run company. In applying for a court-ordered meeting, applicants must prove that it is otherwise impracticable to hold the meeting. This case is significant to the issue of whether the application of this test is different for family-run companies.

Apex court rules that foreign employee on successive fixed-term contract is permanent employee
Gan Partnership
  • Litigation
  • Malaysia
  • 14 July 2020

Employers can offer fixed-term contracts to their employees (often for economic or management reasons). However, such prerogative is subject to scrutiny by the Malaysian courts so that it does not fetter employees' rights in terms of employment security. The Federal Court recently delivered a groundbreaking decision on this matter concerning a foreign employee.

Apex court rules that high court orders and decisions that do not finally dispose of litigants' rights are non-appealable
Gan Partnership
  • Litigation
  • Malaysia
  • 23 June 2020

Section 67 of the Courts of Judicature Act 1964 sets out the right to appeal in civil suits. However, confusion commonly arises when deciding whether an order or judgment made by a high court in a civil matter is appealable. The Federal Court recently clarified this issue by affirming that a decision made during a trial that does not finally dispose of the parties' rights is non-appealable.

Courts' discretion to hold virtual hearings
Gan Partnership
  • Litigation
  • Malaysia
  • 16 June 2020

In a recent case, the plaintiff obtained a judgment in default of defence against multiple defendants during the enforcement of the Movement Control Order in Malaysia. Subsequently, the judge held that various applications of the plaintiff and the defendants be heard by way of a Skype videoconference due to the ongoing COVID-19 pandemic. Dissatisfied with the videoconference, the plaintiff challenged its validity.

Whole arbitration award or just dispositive portion: what should be registered with the courts?
Gan Partnership
  • Litigation
  • Malaysia
  • 26 May 2020

After succeeding in arbitration, the respondents in a recent case filed an originating summons pursuant to the Arbitration Act in a high court to enforce and recognise the entire award as a high court judgment. However, the appellant opposed the originating summons on, among others, the ground that only the dispositive portion of the award (which set out the orders or reliefs) – and not the entire award – was capable of being registered.

COVID-19: courts go online to regulate administration of justice
Gan Partnership
  • Litigation
  • Malaysia
  • 12 May 2020

In order to curb the spread of COVID-19, the government introduced the Movement Control Order (MCO). During the MCO period, all courts and offices of advocates and solicitors are closed. However, a judicial notification of 26 March 2020 stated that parties can apply to the courts for an online hearing of civil matters via an e-review system, an exchange of emails or a video conference, subject to certain conditions.

Arbitration clauses – an overriding promise?
Gan Partnership
  • Litigation
  • Malaysia
  • 28 April 2020

The existence of arbitration clauses in construction contracts is not uncommon. This article examines the impact of a recent Federal Court decision on whether an arbitration clause or a judgment in default which had already been obtained despite the existence of the arbitration clause took precedence. The decision shows that the courts will not review whether a dispute exists between parties, regardless of whether a judgment in default has been obtained.

Court rules on challenges to AIAC and statutory adjudication
Gan Partnership
  • Litigation
  • Malaysia
  • 07 April 2020

A high court recently issued the first decision regarding a constitutional challenge of the legitimacy of statutory adjudication under the Construction Industry Payment and Adjudication Act 2012. In this case, the court was also confronted with a challenge of the appointment of the late Vinayak Pradhan as the then director of the Asian International Arbitration Centre (AIAC) and the immunity asserted by the AIAC, Pradhan and the adjudicator.

High court grants injunction to restrain winding-up proceeding based on disputed adjudication decision
Gan Partnership
  • Litigation
  • Malaysia
  • 31 March 2020

The high court recently delivered a significant decision for the construction industry regarding contractors' cash flow. This decision is welcome as it has laid down clear directions for stakeholders in the construction sector when they are faced with payment and financing issues, as well as for litigants. Further, this decision highlights the importance of conducting preliminary assessments to determine suitable dispute resolution avenues – namely, adjudication, litigation or arbitration.

Apex court finds controller of housing's powers to waive or modify provisions of statutory contract invalid
Gan Partnership
  • Litigation
  • Malaysia
  • 25 February 2020

The Federal Court recently delivered a landmark decision on a pertinent issue concerning the interests of house buyers. In arriving at its decision, the court considered Parliament's intention when enacting the Housing Development (Control and Licensing) Act and held that the minister of urban wellbeing, housing and local government has sole discretion to regulate and prohibit the terms and conditions of a contract of sale under the act – a social legislation protecting and advancing the interests of house buyers.

Direct payment under CIPAA where main contractor is in liquidation
Gan Partnership
  • Litigation
  • Malaysia
  • 21 January 2020

In the course of the hearing of a direct payment application filed under the Construction Industry Payment and Adjudication Act, the issue arose as to whether direct payment could be ordered against an employer when winding-up proceedings were underway against its contractor. To avoid protracted arguments, the subcontractor withdrew the winding-up proceedings during the hearing of the direct payment application. However, another creditor served a winding-up petition on the main contractor shortly thereafter.

Federal Court rules that Arbitration Act provisions do not apply to non-parties to arbitration agreements
Gan Partnership
  • Litigation
  • Malaysia
  • 22 October 2019

The Federal Court recently held that Sections 8 and 10 of the Arbitration Act do not apply to a non-party to an arbitration agreement. The appellant in the case was granted leave to appeal to the Federal Court on two questions of law, including whether the requirements of Section 10 of the act must be met by a party litigant seeking an injunction to restrain the prosecution of an arbitration to which it is not a party but which would affect its proprietary rights.

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