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.
In a recent Court of Appeal case, the plaintiff sought an injunction to restrain arbitration proceedings between the second, third and fourth defendants, despite the fact that it was not a party to the proceedings. Among other things, the court had to consider whether Sections 10(1)(a) and 10(3) of the Arbitration Act 2005 apply to non-parties to arbitration proceedings and determine the test for accepting an injunction application to restrain arbitration proceedings by non-parties.
The Federal Court recently clarified the high threshold required for an arbitral award to be set aside on grounds of public policy pursuant to Section 37 of the Arbitration Act. According to the court, although public policy is a broad concept, when applying it for the purpose of setting aside an award under Section 37, it should be read narrowly. Further, even where such a conflict with public policy is established, the court's power to set aside an award under Section 37 remains discretionary.
In 2005 the Indian government unsuccessfully applied to the Malaysian courts to set aside a partial award issued by the arbitral tribunal. In 2014 the Indian government issued the defendants with a notice to show cause, prompting the defendants to request the tribunal to be reconvened since there was a dispute on the quantification of sums payable. The tribunal granted the final award and the Indian government applied to the Malaysian High Court to set it aside.
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 Civil Aviation (Security) Regulations 2019 (Security Regulations) recently entered into force. Among other things, the regulations have established new aviation security authorities, implemented national security programmes and introduced new security and screening controls. Passengers, operators (including aerodrome operators), ground handlers and other persons who fail to comply with the Security Regulations could face a fine of up to RM200,000 or up to five years' imprisonment (or both).
A Bangladeshi man was recently caught committing lewd acts on a flight departing from Kuala Lumpur International Airport. It is unclear whether the criminal laws in Malaysia could apply in this case, as available news reports have not yet provided sufficient information. However, assuming that Malaysian criminal laws apply, the man's curious actions may contravene several Malaysian statutes, including the Penal Code.
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.
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.
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.
It is common for large conglomerates to require customers to execute agreements with standard boilerplate terms and conditions. The fine print of these boilerplate terms and conditions typically contains an exclusion clause which seeks to restrict or limit the liability of the corporations. However, what happens when these corporations default under the agreement and then seek refuge behind the exclusion clause to disclaim liability?
It has long been recognised that where wrongdoers control a company and thus prevent it from bringing an action, the courts will allow shareholders to do so on the company's behalf in order to obtain redress by way of a derivative action. While the courts have recognised a range of scenarios where wrongdoers can be said to control the company, can this concept of wrongdoer control apply where there is a deadlock at both the board and shareholder level obfuscating any clear majority or minority in the company?
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.
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.
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.
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.
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.
In Malaysia, the Income Tax Act 1967 governs the imposition of income tax. However, in 1990 a separate tax act, the Labuan Business Activity Tax Act, was introduced to govern the imposition of tax on Labuan business activities carried out by Labuan entities. The Labuan act has now been substantially revised following Budget 2019. In particular, Labuan entities can no longer elect to pay the RM20,000 flat tax rate; instead, they will be subject to 3% tax on chargeable profits from any Labuan business activity.
In a recent case, IBM Malaysia applied for an advance ruling from the director general of inland revenue (DGIR) to determine whether a payment made by it to IBM Ireland under a software distribution agreement would be considered royalty under the Income Tax Act and thus subject to withholding tax. One of the issues raised by the DGIR for consideration by the court was whether the advance ruling was a decision amenable to judicial review.
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.