Recent Federal Court decisions have established that an entry of unconditional appearance does not constitute a step in the proceedings within the meaning of Section 6 of the Arbitration Act 1952. It appears that the conflict over the entry of unconditional appearance began in a 1998 case, in which the judicial commissioner based his decision on comparing the difference in wordings of the English and Malaysian acts.
The case of Bina Jati Sdn Bhd v Sum-Projects (Bros) Sdn Bhd defines the areas in which the courts may intervene in arbitration proceedings. The Court of Appeal held that the lower-court judge was "more than justified" in concluding that the arbitrator had correctly declined to deal with certain allegations and found no fault with the judge's finding that the appellant was bound by the arbitrator's ruling.
Although the Arbitration Act 1952 contains no provision for setting aside an award on the basis of error on the face of the award, the remedy is available in common law under the inherent jurisdiction of the court.
In an application before the High Court to set aside an arbitrator's award under Section 24(2) of the Arbitration Act 1952, it was held that damages can be awarded for innocent misrepresentation. The intention of the parties when they entered into joint venture and lease agreements formed the basis of the arbitrator's decision.
A recent symposium on Asian arbitration law highlights the fact that Malaysia has been dragging its feet in reforming this area. However, it is rumoured that a major reform of the Arbitration Act is contemplated, which is likely to be based on the (UNCITRAL) Model Arbitration Law.
Amendments have been made to both Schedule 1 and Schedule 2 of the Anti-Money Laundering Act 2001 to increase the types of institution covered by the act, as well as the number of offences. Over 1,300 suspicious transactions have so far been reported under the act, but there have been no prosecutions.
The introduction of the Payment Systems Act 2003 is in line with recommendations in the Financial Sector Master Plan, which include the adoption of a flexible, proactive and effective regulatory framework to oversee the payments system and improve its efficiency.
In its Annual Report 2002 the Central Bank of Malaysia announced that the exchange controls regulations have been liberalized in an effort to complement and boost other macro-economic initiatives and stimulate the economy, particularly domestic growth and foreign direct investment.
The Malaysian Ministry of Finance recently published its 2002/2003 Economic Report assessing the performance and prospects of the Malaysian economy. Generally, the domestic banking sector has recovered well from the economic crisis. Monetary policy for 2003 is likely to focus on supporting private sector initiatives, dynamism and growth to further accelerate the economy's recovery.
Islamic banking in Malaysia is set to expand on a global basis as the Central Bank of Malaysia formulates policies and measures to increase the capacity and capability of Islamic banking players.
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.
Since the introduction of a materiality threshold in the Kuala Lumpur Stock Exchange listing requirements, listed companies have more scope and discretion as to whether to disclose a transaction. However, companies are still advised to err on the side of caution. Where the materiality of a transaction is debatable, it would be prudent for a company to make a disclosure.
After a shaky start, the Malaysian Exchange of Securities Dealing and Automated Quotation (MESDAQ) may well now be a viable option for the financing needs of technology or high-growth companies that have credible five-year business plans but no profit track record.
As asset securitization is a relatively new financing concept, it will be some time before such mode of financing is fully developed in Malaysia. However, it is important that all relevant authorities and bodies keep abreast of the developments in this area in order to reap the benefits.
The Securities Commission has increased the minimum paid-up capital requirements for companies listed on the Kuala Lumpur Stock Exchange and announced that proceeds from private debt securities issues can be used to finance the development of residential properties priced over M$250,000 per unit.
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 Malaysian High Court recently decided on an appeal to the high court against the registrar of companies' decision to refuse to order the second defendant, DiGi.Com Berhad, to change its company name. The plaintiff contended that the second defendant's name was confusingly similar to its own name, DG Kom Sdn Bhd, thereby rendering it 'undesirable' under Section 22(1) of the Companies Act.
The Companies Commission has been established to administer and enforce statutes relating to companies and corporations. The Companies Amendment Act (2) 2002 reflects this role by changing provisions on the appointment and employment of officers under the Companies Act, as well as amending certain definitions.
In Malaysia, the statutory limited liability partnership (LLP) can be formed only in the federal territory of Labuan under the Labuan Offshore Limited Partnerships Act 1997. This update discusses the purposes for which such LLPs can be formed.
The Companies Act (Amendments) 2001 came into force on August 1 2001 and reversed the previous amendments. The substantial shareholding level is at 5% and Section 69P has been repealed. A further requirement to simultaneously serve the disclosure notices on the Securities Commission has also been included.
Antitrust legislation recently found its way to Malaysia. In April 2010 Parliament passed the Competition Bill 2010. Once gazetted, it will be known as the Competition Act 2010. The new act is intended to prevent large companies from engaging in monopolistic and cartel activities and is in line with global trends to promote healthy competition among businesses for the ultimate benefit of consumers.