The legal battle between La Kaffa International Co Ltd and Loob Holding Sdn Bhd, which has garnered much public attention, recently made its way to the Court of Appeal. This court's decision clarifies that the Arbitration Act 2005 does not oust the inherent jurisdiction or the powers of the courts to order interim measures. However, by virtue of Section 8, the court will be slow to provide relief which is not clearly spelled out in act.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
Various regulatory measures have been introduced in order to assist corporate restructuring, so that Malaysian companies will be well protected from future economic downturns.
New guidelines issued by the Securities Commission aim to facilitate the preparation of takeover offers and mergers documentation and expedite the process of submission and approval.