Federal Court Rules on Forfeiture of Deposits and Liquidated Damages Clauses

Malaysia’s apex court, the Federal Court, has decided on significant points of law relating to the right to forfeit deposits and the application of liquidated damages clauses. This is seen in the grounds of judgment of Cubic Electronics Sdn Bhd (in liquidation) v Mars Telecommunications Sdn Bhd.

These issues relate to the interpretation of section 75 of the Contracts Act 1950, whether there is a need to prove actual loss, and whether there has been an alignment of Malaysia law with the UK Supreme Court position in Cavendish.

This Federal Court decision significantly clarifies the previous position under Selva Kumar. Continue reading

Malaysia’s Prohibition of Smoking in All Eating Places

The Control of Tobacco Product (Amendment) Regulations 2018 [P.U.(A) 329/2018] (the 2018 Regulations) will come into force on 1 January 2019. The 2018 Regulations will bring into force a wide prohibition of smoking in an “eating place”.

Wide Definition of Eating Place: No Smoking Three Metres from Any Such Area

The term “eating place” is widely defined. It means any premises whether inside or outside building, where food is prepared, served or sold and includes (which means the following are not the only situations that apply): Continue reading

Corporate Rescue in Malaysia: Relevant Documents for Corporate Voluntary Arrangement and Judicial Management

For those involved in the restructuring and insolvency field, I thought it would be useful to set out all the relevant provisions, subsidiary legislation and documents for the corporate rescue mechanism in Malaysia. Corporate rescue under the Companies Act 2016 is corporate voluntary arrangement and judicial management.

Continue reading

Salutary Reminder to Litigators: Crucial Importance of Well-Researched Arguments Before the Court

The Court of Appeal issued its grounds of judgment dated 19 September 2018 in the case of Mak Siew Wei v Yeoh Eng Kong and other appeals. The Court of Appeal took the unusual step of issuing a post-script to remind counsel of the need for well-researched briefs and advocacy. The Court reminded us that it is a cornerstone of the administration of justice. In our adversarial system, the Courts would rely significantly on the arguments of counsel and on the truth of the legal arguments.

Continue reading

Case Update: Court of Appeal Clarifies Leave for Bankruptcy against Guarantors under the Insolvency Act 1967

The Court of Appeal decision in Hong Leong Bank Berhad v Ong Moon Huat [2018] 1 LNS 1612 has clarified two important points under the new Insolvency Act 1967 on bankruptcy actions against guarantors.

The first issue is to clarify the protection for guarantors where all modes of execution and enforcement must be first exhausted against the principal debtor alone. The second issue is that when seeking leave to proceed against the guarantor, the judgment creditor can apply for leave to proceed either upon the issuance of the bankruptcy notice or even prior to that, up to and immediately prior to the filing of a creditor’s petition. Continue reading