Case Update: Federal Court Decides that Retention Sum in a Construction Contract is Not Held on Trust

The Federal Court in the Pembinaan Legenda case has decided on significant areas of law on whether retention sum monies under a construction contract are held on trust. There was uncertainty in light of two conflicting Court of Appeal decisions in Qimonda and Pembinaan Legenda.

In its grounds of judgment dated 13 March 2019, the Federal Court has held that there is no implication at law of retention sum monies being held on trust. The creation of a trust depends on the construction of the contractual terms and also the separation of the monies into a trust account. Continue reading

Case Update: Federal Court Confirms Jurisdiction to Set Aside a Winding Up Order

The Federal Court in grounds of judgment dated 22 November 2018 in the SKS Foam decision confirmed the Court’s jurisdiction to set aside a perfected winding up Order in certain limited instances.

The Court is able to exercise its jurisdiction under the Federal Court case of Badiaddin to set aside its own Order where the defect is of such a serious nature that there is a need to set aside the Order in the interests of justice. Continue reading

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

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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Shareholder Oppression: A Personal Wrong or a Corporate Wrong?

Lee Shih and Joyce Lim discuss the effect of the Singapore Court of Appeal’s decision in the Sakae Holdings case. This article was originally published in Skrine’s Legal Insights Issue 03/2018.

In the recent case of Ho Yew Kong v Sakae Holdings Ltd [2018] SGCA 33 (“Sakae Holdings”), the Singapore Court of Appeal had the opportunity to clarify the distinction between personal wrongs committed against shareholders of a company and corporate wrongs against the company. This distinction directly relates to the question of whether the appropriate relief in each respective scenario would be by way of an oppression action or a statutory derivative action.

ST Photo. Image from the Business Times Singapore.

The Singapore Court of Appeal set out a framework to determine whether an aggrieved shareholder could maintain an oppression action or ought to have pursued a statutory derivative action instead. Continue reading