Case Update: High Court Decides on Restraining Order Requirements under Companies Act 2016

I had earlier written about a High Court decision that set aside a restraining order. The Court held that the applicant must meet the statutory pre-conditions for the grant of a restraining order in a scheme of arrangement from the very initial application stage.

The High Court has now issued its grounds of judgment dated 3 May 2019 in the case involving Barakah Offshore Petroleum Berhad and PBJV Group Sdn Bhd.

 

 

 

Upcoming Book: Law and Practice of Corporate Insolvency in Malaysia

Sweet & Maxwell is publishing an upcoming book: Law and Practice of Corporate Insolvency in Malaysia. It will be the first dedicated text in Malaysia covering restructuring and insolvency law. Each chapter is written by a lawyer, an insolvency practitioner or a combination of both. The book should be a good blend of the latest legal developments and practical tips.

The book will cover all the areas of winding up, receivership, schemes of arrangement, corporate voluntary arrangement and judicial management. Continue reading

Case Update: Two-Year Time Limit to Obtain Court Order to Reverse Dissolution of Company

The High Court decision in Ketua Pengarah Hasil Dalam Negeri v Suruhanjaya Syarikat Malaysia and another (Grounds of Judgment dated 12 February 2019) held that there is a strict two-year time limit from the date of dissolution to obtain the Court Order to reverse the dissolution of a company. It is not enough to file the court application within that two-year period from dissolution.

This is in the context of interpreting section 535(1) of the Companies Act 2016 (CA 2016) (which is identical to the previous section 307(1) of the Companies Act 1965). This section states that “where a company has been dissolved, the Court may, at any time within two years after the date of the dissolution … make an order … declaring the dissolution to have been void.” Continue reading

Restraining Order under a Scheme of Arrangement Must Satisfy Pre-Conditions from the Start

An applicant must meet the statutory pre-conditions for the grant of a moratorium (otherwise known as a restraining order) under Malaysia’s scheme of arrangement even at the initial application stage. This was decided in a recent High Court decision dated 22 April 2019. The Court set aside the initial grant of the restraining order as the applicant companies had not satisfied the pre-conditions at the time of the application.

To my knowledge, this is also the first decision on this issue under the new section 368(2) of the Companies Act 2016 (CA 2016). There have been conflicting High Court decisions on this issue when interpreting the predecessor section 176(10A) of the Companies Act 1965 (CA 1965). The full grounds of judgment have not been issued yet.

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Case Update: Court of Appeal Rules on Removal and Remuneration of Liquidator

The Court of Appeal issued its Grounds of Judgment dated 11 December 2018 in the case of Ong Kwong Yew and others v Ong Ching Chee and others. It is a cautionary tale for liquidators on the grounds for their removal as liquidator and their conduct in terms of seeking fees for work done.

The conduct of the liquidator was serious enough for the Court of Appeal to remark that the liquidator ought to be sanctioned by the Malaysian Institute of Accountants or the Director-General of Insolvency.

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