Malaysia updates

Arbitration & ADR

Contributed by Shearn Delamore & Co
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.

High court gives effect to parties' intentions in face of ambiguously drafted clauses
  • Malaysia
  • March 30 2017

In a recent case, the plaintiff opposed the defendant's stay application on the basis that, among other things, the ambit of the arbitration clause was confined to disputes arising before and during the completion of the work. The contract did not provide for disputes after completion of the work to be referred to arbitration. Despite the ambiguous clauses, the court upheld the arbitration clause to give effect to the parties' intentions.


Contributed by SKRINE
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.


Contributed by SKRINE
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.


Contributed by Gan Partnership
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.

Federal Court spells out restriction for notices of cross-appeal
  • Malaysia
  • January 10 2017

The Federal Court recently set out the circumstances under which a notice of appeal under Rule 5 of the Rules of the Court of Appeal or a notice of cross-appeal under Rule 8 can be filed. In short, where the respondent wants to reverse or set aside part of a lower-instance finding, decision or judgment which was not appealed in the appellant's notice of appeal, it is incumbent on the respondent to file an independent and separate notice of appeal, rather than a notice of cross-appeal.

Shipping & Transport

Contributed by Shearn Delamore & Co
Court rules in Silver Moon time charterparty case
  • Malaysia
  • January 24 2018

In a recent case, the plaintiff had instructed the defendant – the owner of the vessel Silver Moon – to head to the South Indian Ocean for cargo operations. Despite having received the instructions, the vessel had to deviate and deal with multiple repair works. In view of the vessel being unseaworthy, the plaintiff contended that the defendant was in repudiatory breach of the time charterparty and had the vessel arrested.

Changes to National Cabotage Policy
  • Malaysia
  • August 09 2017

The prime minister recently proposed that Sabah, Sarawak and Labuan be exempted from the National Cabotage Policy, which governs maritime transport between Peninsular Malaysia and East Malaysia, effective June 1 2017. Under the proposal, foreign ships can transport cargo domestically. This announcement attracted differing opinions regarding its possible impact.

Damages under marine cargo all-risk insurance policy
  • Malaysia
  • April 19 2017

A court recently considered an insurance claim under a marine cargo all-risk insurance policy for damages to a ship unloader crane that had occurred while it was being unloaded onto a barge at West Port, Port Klang. The court ultimately found that the plaintiffs had proven their case on the balance of probability and granted their claim for RM4.5 million, with costs.

Court rules on payment for bunkers
  • Malaysia
  • January 18 2017

In a recent high court case, the plaintiff's notice of lien stipulated that it had exercised a lien over the bunkers, and that the defendants should pay the plaintiff and not the second intervener. The defendants applied to set aside or strike out the plaintiff's subsequent in rem action, as they had no contractual nexus with the plaintiff for the purchase and supply of the bunkers. The court held that since there was no direct contract between the plaintiff and the defendants, a contractual lien did not arise.

Court of Appeal rules on limitation clauses
  • Malaysia
  • September 21 2016

The Court of Appeal recently reviewed a high court decision which had dismissed an application by the first defendant for determination of a preliminary issue. The Court of Appeal had to consider whether the limitation period in the bill of lading, as provided for in the Hague Rules, was contrary to Section 29 of the Contracts Act 1950 and whether an earlier Court of Appeal decision was binding on the high court.