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

Case Update: Malaysia’s Court of Appeal Confirms Power to Set Aside a Winding Up Order

In the Court of Appeal’s grounds of judgment dated 10 August 2017 of Gan Bee San v Malayan Banking Berhad, the Court of Appeal allowed an appeal and set aside a winding up order. The decision confirms the growing list of appellate authorities where the Court has the inherent jurisdiction to set aside a winding up order. The brief facts are below.

Continue reading

5 Key Legal Issues from the Closing Down of True Fitness Malaysia

On 9 June 2017, True Fitness Malaysia announced that it would close its True Fitness and True Spa centers in Malaysia on 10 June 2017. It cited that its businesses were no longer financially viable due to evolving market conditions.

Credit: Picture from True Fitness website


It was reported that the True Fitness Malaysia gym members were left in the lurch and with uncertainty on their long-term memberships. The reports suggested that there may have even been new members being recruited for the gym very shortly before the announcement on the closure.

I address 5 key legal issues that arise from the closing down of the True Fitness business in Malaysia. I touch on the corporate restructuring of the True Fitness group, the impact of any winding up proceedings against True Fitness, and who may be liable for any claims by the gym members or creditors. Continue reading

10 Common Issues Arising from the Companies Act 2016

With the coming into force of the Companies Act 2016, a number of practical issues and questions have since cropped up. The Companies Commission of Malaysia (SSM) did release its helpful FAQ document. This document has been updated from time to time (presently, it has been updated up until 3 April 2017) and helps to answer the most frequently asked questions.

Nonetheless, there are still other common issues arising from the Companies Act 2016. I come across these queries in my practice or at the talks that I give. I set out below 10 of these key issues. Companies can consider seeking further clarification or advice. These issues range from the constitution, dividends, director-related issues, and transitional matters.

Continue reading

Speaking at the Companies Commission: Closing of Companies and LLPs

On 23 February 2017, I will be speaking at the Companies Commission of Malaysia for a talk entitled Closing of Companies and Limited Liability Partnerships. I am an associate speaker for COMTRAC, the Companies Commission of Malaysia Training Academy.


There has been overwhelming response for this talk and the registration has already closed unfortunately. My co-speaker will be Puan Norhaslinda Salleh, Head of the Insolvency in the Registration Services Division of the Companies Commission.

The talk will be based on all the new provisions of the Companies Act 2016 as well as the Limited Liability Partnerships Act 2012. The focus will be the closing down of a business, whether it is the winding up of a company or a LLP. We will be sharing from our practical experience, and in particular, my co-speaker will be able to share from the regulator’s perspective.


 We will cover areas on:

  1. Understand the process of winding up and its impact on the company, creditors and liquidators.
  2. Appreciate the difference in the two voluntary winding up processes.
  3. Identify the different effects of voluntary winding up on legal proceedings.
  4. Recognise the different grounds to initiate the court winding up process.
  5. Understand the court winding up process from the statutory demand until the winding up order.
  6. Be aware of the striking off procedure and to avoid striking off.
  7. How to apply for the striking off for a dormant company.
  8. Applying for the reinstatement of a struck off company.
  9. Learn on the practical issues arising from the management of assets of dissolved companies.
  10. Understand the winding up and striking off procedure for LLPs.