Malaysia updates

Arbitration & ADR

Contributed by Shearn Delamore & Co
Court directs suit involving non-parties to arbitration agreement to proceed ahead of arbitration proceedings
  • Malaysia
  • April 26 2018

The Court of Appeal recently considered the law governing a stay of proceedings in relation to non-parties to an arbitration agreement pending the outcome of arbitration proceedings. The court determined that the facts of the case supported the conclusion that the court proceedings involving the non-parties to the arbitration agreement should proceed ahead of the arbitration proceedings between the parties to the arbitration.

Federal Court rules on arbitrators' jurisdiction to award pre and post-award interest
  • Malaysia
  • February 01 2018

The Federal Court recently held that under Section 42 of the Arbitration Act, judicial intervention is warranted only where the award substantially affects the rights of one or more parties. A perverse, unconscionable and unreasonable award is not grounds to set aside the award under Section 42. Further, according to the court, Section 42 provides no jurisdiction to deal with questions of fact.

Federal Court reinforces law that supervisory courts may review arbitral awards
  • 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.

High court clarifies proceedings under Arbitration Act
  • 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
  • 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.


Aviation

Contributed by SKRINE
Latest amendments to Malaysian Aviation Commission Act 2015
  • Malaysia
  • April 18 2018

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.

Now everyone can fly… with fewer headaches!
  • Malaysia
  • January 31 2018

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.


Construction

Developments in statutory adjudication in 2017
  • Malaysia
  • May 21 2018

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.

Statutory adjudication: pay-when-paid clauses remain valid
  • Malaysia
  • March 19 2018

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.

Federal Court decision changes adjudication practice in Malaysia
  • Malaysia
  • December 18 2017

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.

Development of statutory adjudication
  • Malaysia
  • June 26 2017

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.


Corporate Tax

Contributed by Shearn Delamore & Co
Legal professional privilege and director general of inland revenue's powers
  • Malaysia
  • May 11 2018

Members of the Malaysian Bar recently complained that Inland Revenue Board officers had carried out raids on them in order to audit their clients' accounts and gain access to those records. The Malaysian Bar then wrote to the director general of inland revenue (DGIR), stating that such audits breached the principle of solicitor-client privilege. However, the DGIR held that the Income Tax Act overrode the provisions of the Evidence Act that conferred solicitor-client privilege.


Litigation

Contributed by Gan Partnership
Dishonesty must be present before debtor in assignment can be made liable
  • Malaysia
  • June 19 2018

A recent Federal Court decision has simply reaffirmed the position of Malaysian law in relation to breaches of trust. The majority of the Federal Court held that imputed constructive knowledge of an assignment is insufficient to hold the debtor liable to the assignee for the debt. The decision also illustrates a disinclination to depart from the established law on the requirement of dishonesty in a breach of trust.

Stricter confidentiality obligation on lawyers
  • Malaysia
  • February 20 2018

Section 126 of the Evidence Act 1950 imposes a legal obligation on all solicitors to protect and keep confidential any information obtained from their clients, including any legal advice that has been proffered. However, as much as the importance of this privilege is understood and embraced, it may still have come as a surprise when the Federal Court decided that a breach of this privilege by solicitors could entail a legal action against said solicitors.

Court rules on applicable test in medical negligence suits
  • Malaysia
  • December 05 2017

The Federal Court recently examined whether the Bolam test or the test in the Australian case of Rogers v Whitaker with regard to the standard of care in medical negligence should apply, following conflicting decisions by the Malaysian Court of Appeal and legislative changes in Australia. The Federal Court's decision provides a clearer legal position with regard to the distinction between diagnosis and treatment on the one hand and the duty to advise of risks on the other hand.

Applying Court of Appeal rules
  • Malaysia
  • July 18 2017

The Federal Court recently examined whether an objection pertaining to the unlawfulness of a notice of appeal could, as a matter of procedural law, be undertaken by way of a mere preliminary objection. Further, the court assessed whether the filing of a single notice of appeal in respect of a decision on eight separate and distinct interlocutory applications complied with the procedural rules set out in the Rules of the Court of Appeal 1994.

Court rules that stay of proceedings is mandatory
  • Malaysia
  • April 18 2017

The Federal Court recently restated the Malaysian courts' position in respect of their intervention in arbitration. The decision has clarified that once the parties agree to submit to arbitration in the event of disputes and put that agreement into writing, the courts will be less willing to allow one party to subsequently seek to depart from the arbitration agreement without sufficient justification.