Malaysia updates

Arbitration & ADR

Court discharges interim injunctions granted pursuant to Section 11 of Arbitration Act
  • Malaysia
  • 13 February 2020

The high court recently set aside interim injunctions which had been granted pursuant to Section 11 of the Arbitration Act 2005 following an inter partes hearing. With this decision, the high court has confirmed that interim injunctions granted pursuant to Section 11 of the Arbitration Act may be set aside on evidence of suppression of material facts leading to the grant of the interim injunctions and if there has been a material change of circumstances since such interim measures were granted.

It's confirmed! CIPAA applies prospectively to construction contracts
  • Malaysia
  • 12 December 2019

After much anticipation, the Federal Court has finally confirmed that the Construction Industry Payment and Adjudication Act 2012 applies only to construction contracts entered into after the act took effect on 15 April 2014. As such, any adjudication proceedings based on a claim arising from a construction contract which was entered into before that date, including adjudication decisions, are null and void.

High court rules that non-parties to arbitration are not bound by confidentiality
  • Malaysia
  • 17 October 2019

A high court recently ruled that the prohibition against third parties publishing, disclosing or communicating information relating to arbitration proceedings does not extend to non-parties to an arbitration. This decision will affect the extent to which the confidential documents used in arbitral proceedings remain confidential.

Federal Court rules on test applicable to applications to restrain arbitration proceedings made by non-parties
  • Malaysia
  • 08 August 2019

The Federal Court recently overturned a Court of Appeal decision on the test which applies to applications to restrain arbitration proceedings made by non-parties to the proceedings. The Federal Court concluded its judgment by affirming the findings of the High Court in this case, including that the balance of justice was in favour of the injunction order and that there were serious issues to be tried.

Court of Appeal determines that negative declaratory arbitration awards are enforceable
  • Malaysia
  • 23 May 2019

A recent Court of Appeal case addressed whether a negative declaratory arbitration award is enforceable. The decision emphasises the narrow grounds that enable the high courts to refuse to recognise or enforce an arbitration award, as long as the requirements of Section 38(2) of the Arbitration Act are complied with. It also establishes a precedent that there is no barrier to the enforcement of a negative declaratory arbitration award.


Aviation

Contributed by SKRINE
Cape Town Convention: court rules that AirAsia X restructuring scheme is insolvency-related event
  • Malaysia
  • 24 March 2021

A high court recently held that a scheme of arrangement under Section 366 of the Companies Act 2016 is an insolvency-related event for the purposes of the Convention on International Interests in Mobile Equipment and the protocol thereto. This is an interesting case which will likely be instructive in many jurisdictions as the number of airline restructurings continues to rise due to COVID-19's impact on the aviation industry.

Landmark decision on first airline debt restructuring scheme due to COVID-19
  • Malaysia
  • 10 March 2021

The High Court recently issued a landmark decision that extensively examined the court's jurisdiction and duties when considering an application under Section 366(1) of the Companies Act 2016 for an order to convene creditors' meetings to consider and approve an arrangement scheme. The court ruled that the proposed arrangement scheme was an 'insolvency-related event' for the purposes of the Cape Town Convention's aircraft protocol.

High court orders release of Pakistan International Airlines aircraft
  • Malaysia
  • 10 February 2021

The Kuala Lumpur High Court recently ordered the immediate release of a Pakistan International Airlines Boeing 777 aircraft. The aircraft had been grounded and detained at Kuala Lumpur International Airport for two weeks as a result of a mandatory injunction. This is believed to be the first Malaysian case to involve a mandatory injunction to ground an aircraft.

Much ado about nothing? Climate change is real and aviation industry must step up its efforts
  • Malaysia
  • 18 November 2020

With airline companies rapidly depleting cash reserves and any form of subsidies to ensure survival in the current climate, the unsurprising reality is that efforts to go green have taken a step back. However, the pandemic has in a way allowed relevant industry players to pause and ponder on long-term strategies, including but not limited to the sustainability of both airline companies and, importantly, environmental protection.

Has Top Gun's Maverick lost his appeal? Pilot training enrolments decline amid COVID-19 pandemic
  • Malaysia
  • 14 October 2020

The domino effect of airlines' massive lay-offs of pilots is a decrease in pilot training applications in Malaysia. One of the many flight training organisations in Malaysia has seen a 30% fall in enrolment at its eastern Malaysia centre and a 15% decrease in its western Malaysia centre. The reason for this is because the investment does not necessarily guarantee its returns.


Corporate & Commercial

Caveat venditor – has the pendulum swung too far?
  • Malaysia
  • 08 July 2019

'Caveat emptor' or 'buyer beware' is a familiar concept. The effects and consequences of caveat emptor have been criticised over time and, as a result, commercial law has slowly developed more stringent protection for consumers and buyers. As such, the ramifications of a recent apex court's decision are far reaching. In short, liability can now be imposed on sellers even if the buyer has previously accepted the same product without qualification.

Directors duty to act in company's best interests: how much is too much?
  • Malaysia
  • 22 April 2019

A recent case suggests that there are limits to the way in which directors can act when taking steps to protect a company. The case is a useful reminder that while directors may avail themselves of the shield provided by the judicial management regime in order to allow a company time to regain its footing, the courts will not hesitate to put checks and balances in place to prevent the misuse of such legislation, albeit for the purpose of safeguarding a company's survival.


Corporate Tax

Do databases constitute 'plant' and qualify for capital allowances?
  • Malaysia
  • 10 May 2019

In a recent case before the High Court, CIMB Bank Bhd had written to the director general of inland revenue (DGIR) to seek his confirmation on whether certain databases qualified for capital allowances under the Income Tax Act 1967. The DGIR opined that the databases were not 'plant' but 'goodwill' and would not qualify for capital allowances. However, the High Court rejected the DGIR's argument and held that he had had no basis for his submission.


Employment & Immigration

COVID-19: legal position of migrant workers in Malaysian construction sector
SKRINE
  • Malaysia
  • 27 May 2020

This article sets out the impact of the COVID-19 pandemic on the legal position of migrant workers in Malaysia, particularly in the construction sector, including the risk of deportation of undocumented workers and the current local stigma. This article covers possible restrictions, procedures and challenges faced by documented migrant workers, documented migrant workers with a permit or pass that expired during the Movement Control Order period and undocumented migrant workers in Malaysia.