Case Update: Winding Up Petition Cannot be Stayed Pending Reference to Arbitration

In an earlier article ‘Arbitration and Liquidation: Never the Twain Shall Meet?, I had examined the possible tension between the contractual bargain to arbitration and the statutory right to bring winding up proceedings based on a debt. Would an arbitration agreement trump the statutory winding up process?

The recent High Court decision in NFC Labuan Shipleasing I Ltd v Semua Chemical Shipping Sdn Bhd [2017] MLJU 900; [2017] 1 LNS 943 found that there cannot be a stay under the Arbitration Act 2005 (AA 2005) of a winding up petition. A winding up petition is not a claim for payment. It is a class action in the public interest as part of a statutory regime. Therefore, it was held that a winding up petition is not a ‘proceeding’ that is susceptible to a stay pending arbitration. Further, a winding up petition does not concern a matter that is subject to an arbitration agreement. Continue reading

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Case Update: Federal Court Rules on Seat of Arbitration and the Law of the Arbitration Agreement

The Federal Court in its grounds of judgment dated 17 August 2017 has ruled on the Thai-Lao Lignite v Government of the Lao People’s Democratic Republic appeal.

The Question of Law and the Determination

There was one critical question of law that was answered by the Federal Court:

Where the governing law of the contract is foreign law and the seat of arbitration [seat] is Malaysia, does the parties’ stipulation of Malaysia as the seat constitute an express agreement that the law governing the arbitration agreement is Malaysian law?

In answer to this question, the Federal Court answered as follows. Continue reading