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.

 

 

 

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. I have since written the case commentary on this decision.

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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