Case Update: Federal Court Rules on Scope of An International Arbitration under Malaysia’s Arbitration Act 2005

In its recent grounds of judgment dated 31 October 2018, the Federal Court in the Jan De Nul decision clarified the effect of an international arbitration and the applicability of certain provisions of the Arbitration Act 2005 (AA 2005). The Federal Court also overruled the decision in the Court of Appeal AJWA case. The dispute gave rise to two separate appeals, one in relation to section 42 of the AA 2005 and another relating to the setting aside under section 37 of the AA 2005. This decision only deals with the section 42 aspect.

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Case Update: The MARA Decision on Appointment of Directors and Management Review

The High Court decision in Majlis Amanah Rakyat (MARA) v Dato’ Abd Rahim Adb Halim & Ors [2018] 8 CLJ 738; [2018] MLJU 1008 touched on some important points on the appointment of directors. It is also the first decision to briefly deal with the new right of management review under section 195 of the Companies Act 2016 (CA 2016).

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This dispute arose from the boardroom and shareholder tussle where MARA had requisitioned for an EGM of the company, Med-Bumikar. Med-Bumikar held a substantial stake in the listed entity, MBM Resources Bhd (MBMR). UMW had tabled an offer to purchase Med-Bumikar’s stake in MBMR. The crown jewel at the heart of the dispute was essentially MBMR’s 20% stake in Perodua. UMW already had approximately 38% interest in Perodua and this would allow UMW to have control over Perodua. Continue reading

Case Update: When there are competing nominees to be appointed liquidator

The High Court in its Grounds of Judgment dated 20 June 2018 in Abdul Rahman bin Ismail v Pembangunan Qualicare Sdn Bhd (Penang High Court Winding Up Petition No. 28-6-01/2013) made an interesting observation when there are competing nominees to be appointed as liquidator in a court winding up.

The High Court raised the possibility of a need for a mini trial in order to test the suitability of the two competing liquidator nominees. Continue reading

Case Update: A Shareholder Derivative Action Can Be Brought for Benefit of a Deadlocked Company

The Federal Court in Perak Integrated Networks Services Sdn Bhd v Urban Domain Sdn Bhd & Ors (see the Federal Court Grounds of Judgment dated 16 April 2018) has ruled on the issue of  whether a common law derivative action can be initiated where the company is in a 50:50 deadlock.

The question of law before the Federal Court was:

Whether a derivative action may in law be brought for the benefit of a company, the management and control of which are deadlocked.

 

The Federal Court answered the question in the affirmative. The Federal Court has also set out the definitive test on wrongdoer control for the purposes of a common law derivative action. The possibility of initiating a just and equitable winding up petition based on the deadlock does not in itself prevent a shareholder from bringing a derivative action. Continue reading

Case Update: Is a clause in an employee handbook effective if an employee claims not to have read it?

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Identifying the terms and conditions that apply to an employment relationship is often not as straightforward as reading through an employment contract.

It is the norm, particularly in large employer organisations which span multiple jurisdictions, for these terms and conditions to be set out in several documents. As a minimum, many employers would have an offer letter, the main employment contract, and an employee handbook. These are then supplemented by further individual policies, such as those in relation to personal data, BYOD, IT, benefits, discipline, workplace conduct, grievance procedures — the list is close to endless. The difficulty in determining which terms apply is further complicated when these documents (or parts of some of these documents) are amended or updated over the years.

Problems arise when an employer seeks to apply or enforce some of the terms set out in one of those documents, and the employee claims to not be aware of it — or contends that the document does not apply. The Industrial Court recently considered one such case in Ho Seng Fatt v. Strateq System Sdn Bhd (Award No. 279 of 2018).

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