Malaysia’s legal system is based on common law and follows an adversarial model. Depending on the nature of the proceedings, evidence may be led orally or through affidavits. Legal submissions normally involve a combination of written and oral argument.
Malaysia’s court system is hierarchical, with the primary courts being (in ascending order) the Magistrates’ Court, Sessions Court, High Court, Court of Appeal and Federal Court.
There are two High Courts of co-ordinate jurisdiction, namely the High Court of Malaya (Peninsular Malaysia) and the High Court of Sabah and Sarawak (East Malaysia). Courts that are organised by subject matter are mainly situated in Kuala Lumpur.
Malaysia also has Sharia courts, which deal with certain matters involving Islamic law.
In civil proceedings, court filings and proceedings are accessible by the public. Once a document is filed, it is generally considered public and not confidential.
In criminal proceedings, court filings are not accessible by the public, although proceedings are.
If a party wishes court filings or proceedings to be kept confidential, an application for a sealing or protective order may be made. The court may view a document on a confidential basis before deciding whether to grant such an order.
The legal profession in Malaysia is governed by the Legal Profession Act 1976 (Peninsular Malaysia), the Advocates Ordinance 1953 (Sabah) and the Advocates Ordinance 1953 (Sarawak).
Legal representatives who have a right of audience in Peninsular Malaysia are advocates and solicitors of the High Court who are qualified persons under Section 11 of the Legal Profession Act 1976 and hold valid practising certificates.
Legal representatives who have a right of audience in Sabah or Sarawak are advocates and solicitors who have been born in Sabah or Sarawak, respectively, have been ordinarily resident in Sabah or Sarawak, respectively, for a continuous period of at least five years, or are domiciled in Sabah or Sarawak, respectively, at the relevant time, and hold valid practising certificates. Advocates and solicitors from Peninsular Malaysia are only allowed a right of audience on an ad hoc basis, with leave from the High Court of Sabah and Sarawak for the proceedings in question.
A foreign lawyer will only be allowed a right of audience on an ad hoc basis, with leave from the relevant High Court for the proceedings in question. The foreign lawyer will have to demonstrate skills or ability which local lawyers do not possess.
Litigation funding is not permitted due to the operation of the common law doctrines of maintenance and champerty. The common law condemns maintenance and champerty for fear that a funder might be tempted to interfere with the course of justice for personal gain.
The matter is not applicable in this jurisdiction.
The matter is not applicable in this jurisdiction.
The matter is not applicable in this jurisdiction.
The matter is not applicable in this jurisdiction.
Contingency fees are not permitted in Malaysia.
Section 112(1)(b) of the Legal Profession Act 1976 states that no advocate and solicitor shall enter into any agreement to prosecute any suit or action which stipulates or contemplates payment only in the event of success.
As such, contingency fee agreements are void and unenforceable. See Lee Mun Keong v Precise Avenue (M) Sdn Bhd & Anor  8 CLJ 74.
The matter is not applicable in this jurisdiction.
The court does not impose rules on the parties in relation to pre-action conduct, and generally there are no preconditions to initiating proceedings. There are on occasion statutory prerequisites to be complied with, such as issuing statutory notices before commencing proceedings to wind up a company based on its inability to pay its debts, bankruptcy proceedings against an individual and proceedings for leave to commence a derivative action.
While there is no requirement for a potential defendant to respond to pre-action letters, in commercial matters the court may treat silence as an acceptance of the allegations since commercial entities and individuals are expected to refute untrue allegations. See Dream Property Sdn Bhd v Atlas Housing Sdn Bhd  2 CLJ 453.
The Limitation Act 1953 prescribes the following limitation periods:
Where a civil suit is filed against the government, the limitation period is 36 months from the date of the act, neglect or default, or the cessation of a continuing injury or damage. See Section 2 of the Public Authorities Protection Act 1984.
The jurisdictional requirements for a defendant to be subject to a suit in Malaysia are contained in Section 23 of the Courts of Judicature Act 1964, namely that Malaysia should be the place where:
In the case of a foreign defendant, the plaintiff would have to establish that the court has jurisdiction over the claim and that the plaintiff has a good cause of action. See Joseph Paulus Lantip & Ors v Unilever PLC  7 CLJ 693.
A complaint is usually initiated by filing (depending on the nature of the proceedings) a writ of summons with a statement of claim, or an originating summons with an affidavit. These documents (save for the affidavit) can be amended after they have been filed, either by right or with leave.
Service is the responsibility of the plaintiff. The originating process is served personally on the defendant or sent to him or her at his or her last known address by prepaid AR (advice of receipt) registered post. Substituted service may be effected with leave of court.
A defendant outside the jurisdiction can be sued in Malaysia with leave of court. The plaintiff must show, among others, that he or she has a good arguable case falling within the circumstances set out in Order 11 Rules 1 and 2 of the Rules of Court 2012, and that the defendant is in the particular jurisdiction outside Malaysia. See Joseph Paulus Lantip & Ors v Unilever PLC  7 CLJ 693.
If the defendant does not respond to a suit, the procedure which ensues depends on the type of claim made.
Where the claim is for damages, the plaintiff may apply for final judgment in default of appearance for quantified damages, or for interlocutory judgment on liability with damages to be assessed for unquantified damages.
Where the claim is for movable property, the plaintiff may apply for judgment for delivery of the property or for assessment of its value, while where the claim is for immovable property, the plaintiff may enter judgment for possession of the property.
In the case of other claims, the plaintiff may proceed with the action as if the defendant had entered an appearance, and then apply for judgment in default of defence after the expiration of the period for filing the defence.
Representative actions are permitted under Order 15 Rule 12 of the Rules of Court 2012. The plaintiffs have to have the same interest, be members of the same class, have a common grievance and apply for relief beneficial to all members. See Vellasamy Pennusamy & Ors v Gurbachan Singh Bagawan Singh & Ors  2 CLJ 712.
There is no requirement to provide clients with a cost estimate of the potential litigation at the outset.
Litigants may file interim applications before the trial or substantive hearing of a claim to obtain various remedies from the court, such as an interim injunction pending the disposal of the substantive claim, summary judgment, the dismissal of a claim without a full trial, security for costs, discovery and the production of documents.
A party can apply for early judgment on some or all of the issues in dispute through an application for summary judgment under Order 14 of the Rules of Court 2012. The court may enter judgment if there is no bona fide arguable defence and there are no triable issues. See National Company for Foreign Trade v Kayu Raya Sdn Bhd  2 MLJ 300.
The application can be made for all claims except for libel, slander, malicious prosecution, false imprisonment, seduction, breach of promise of marriage and fraud.
A party can apply to strike out the other party’s claim or defence under Order 18 Rule 19. The whole or part of the claim or defence can be struck out if it does not establish a reasonable cause of action or defence, is scandalous, frivolous or vexatious, may prejudice or delay the fair trial of the action and/or is an abuse of the court’s process. The test is that the claim or defence should be obviously unsustainable. See Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd  3 MLJ 36.
These applications are usually made through a notice of application with an affidavit in support, prior to or shortly after the close of pleadings. The applications will normally be disposed of three to five months after they were filed, during which time affidavits will be filed and submissions made.
Apart from summary judgment and striking out applications, applications can also be filed for the disposal of the suit based on preliminary points of law and/or fact.
An application can be made for the summary disposal of the suit on points of law under Order 14A of the Rules of Court 2012. This is an application to move the court to determine any question of law or construction of any document, where the question is suitable for determination without full trial and will be able to finally determine the claim. It is a requirement that the material facts are not in dispute and that issues of fact are not interwoven with the issues of law. See Thein Hong Teck & Ors v Mohd Afrizan Husain & Another Appeal  1 CLJ 49.
An application can also be filed for the determination of preliminary issues under Order 33 Rule 2. This is an application to move the court to determine any question or issue of fact, law, or mixed fact and law prior to judgment being handed down. The application will be allowed if it appears to the court that a determination of the issue will substantially dispose of the matter or render a trial of the matter unnecessary. See Krishnan Rajan A/L N Krishnan v Bank Negara Malaysia & Ors  1 MLJ 149.
An interested non-party may apply to intervene in a suit by seeking an order to add him or her as a party under Order 15 Rule 6(2)(b) of the Rules of Court 2012. The court must be satisfied that the applicant’s presence is necessary to ensure that all matters in dispute will be effectually and completely determined and adjudicated upon, or that there exists a question or issue between the applicant and a party to the suit arising out of or relating to or connected with any relief or remedy claimed in the suit which would be just and convenient to be determined as between the applicant and that party as well as between the parties to the suit.
The applicant must satisfy the court that he or she has a legal interest (and not a mere commercial interest) that will be directly affected by any judgment or order given in the action. See Pegang Mining Co Ltd v Choong Sam & Ors  2 MLJ 52.
A defendant can apply for security for costs on the following grounds under Order 23 of the Rules of Court 2012:
The successful party can generally recover the costs of an interim application from the losing party. See Order 59 Rule 3(2) of the Rules of Court 2012.
The court has the discretion to award “costs in the cause”, where the successful party in the substantive claim will be entitled to the costs of the interim application. See Order 59 Rule 1(3).
An application will normally be heard and disposed of three to five months from the date it was filed.
An applicant may request that the application be dealt with urgently by filing a certificate of urgency with the application, setting out the grounds for the urgency. The court may fix an early hearing date for the application, depending on the urgency.
Discovery of documents is available in civil cases and is administered by the litigants with leave of the court.
A party may apply for an order for discovery under Order 24 of the Rules of Court 2012. The applicant will have to show that there is a document which is relevant and is or has been in the possession, custody or power of the person against whom the order for discovery is sought.
Further, the court may at any time order a party to give discovery by making and serving on any other party a list of the documents which are or have been in his or her possession, custody or power and may at the same time or subsequently also order him or her to make and file an affidavit verifying such a list and to serve a copy thereof on the other party. The documents in question are the documents on which the party relies or will rely, and the documents which could either adversely affect his or her own or another party’s case, or support another party’s case. See Order 24 Rule 3.
The overriding test for discovery is whether it is necessary for disposing fairly of the suit or for saving costs. See Order 24 Rule 8.
A party may apply under Order 26 for an order giving him or her leave to serve on any other party interrogatories relating to any matter in question, and requiring the other party to answer the interrogatories on affidavit within a specific period. The court will grant leave for interrogatories it considers necessary for disposing fairly of the suit or for saving costs.
It is possible to obtain discovery from a third party who is not party to a suit, or is not intended to be named as a party to a prospective suit, under Order 24 Rule 7A of the Rules of Court 2012.
In an application filed after the commencement of a suit, the applicant has to specify or describe the documents in respect of which the order is sought, show that the documents are relevant to an issue arising or likely to arise out of the claim made, show that the person against whom the order is sought is likely to have or have had the documents in his or her possession, custody or power, and show that the application is necessary either to fairly dispose of the suit or to save costs. The application has to be served on the third party and on every party to the suit. See Billion Prima Sdn Bhd & Anor v Nutech Company Ltd & Anor  1 CLJ 179.
In a pre-action discovery application, similar requirements must be satisfied by the applicant but, in addition, the applicant must state the material facts pertaining to the intended proceedings, and whether the third party is likely to be a party to the subsequent proceedings.
The general approach to discovery in Malaysia is that it is intended only for relevant documents to prevent trial by ambush, and not as a fishing expedition.
Discoverable documents are generally those which could support or adversely affect the case of a party or his or her opponent, or lead a party to a train of inquiry which achieves either of these outcomes. See Order 24 Rule 7 of the Rules of Court 2012.
The matter is not applicable in this jurisdiction.
Malaysia recognises the concept of legal privilege. Order 24 Rule 13(2) of the Rules of Court 2012 allows a party to object to the production of a document on the ground that it is privileged. The court may inspect the document to decide whether the objection is valid.
Further, Section 126 of the Evidence Act 1950 protects from disclosure communication between a client and his or her lawyer, documents given by a client to his or her lawyer and legal advice given by a lawyer to his or her client.
With regard to giving and receiving legal advice, it does not matter whether or not litigation was pending or contemplated at that point in time. With regard to communication between a client and his or her lawyer, all communication for the purpose of existing or contemplated legal proceedings are protected.
Privilege may be expressly or impliedly waived by a client or abrogated by statute, and does not apply to communications in furtherance of an illegal purpose.
Communications between an in-house counsel and his or her organisation are not protected by privilege.
A party against whom a discovery order is sought can claim that a document ought not to be disclosed on the ground that it would be injurious to public interest, in the event there is any written law which authorises or requires the withholding of the document. See Order 24 Rule 15 of the Rules of Court 2012.
Injunctive relief may be awarded as either interim or final relief.
An interim prohibitory injunction may generally be granted where there is a bona fide serious issue to be tried, where the balance of justice lies in favour of granting the injunction, and where the applicant is in a financial position to meet his or her undertaking as to damages. See Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors  1 MLJ 193.
The types of injunctions available include the following:
An interim mandatory injunction may be granted in clear cases where the plaintiff is very likely to succeed at trial. See Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd  1 MLJ 33.
A party may apply for urgent injunctive relief by filing a certificate of urgency together with the application, which will set out the grounds for the urgency. The court has a discretion to fix a quick hearing date for the application depending on the urgency, which can even be on the same day.
There are no arrangements for out-of-hours judges.
Injunctive relief may be obtained on an ex parte basis where the case is one of urgency. The affidavit in support must contain all of the following:
See Order 29 Rule 2 of the Rules of Court 2012.
An ex parte injunction will automatically lapse after 21 days. The court, when granting an ex parte injunction, must fix a date to hear the application inter partes within 14 days from the date of the ex parte order. See Order 29 Rules 2B and 2BA.
For both ex parte and inter partes injunctions, an applicant may be held liable for damages suffered by the respondent if the respondent successfully discharges the injunction.
The applicant is not generally required to provide security for potential damages, but must normally provide an undertaking to compensate the respondent for damages in the event the injunction is found to have been wrongly granted. The respondent can apply for fortification of the applicant’s undertaking.
Injunctive relief may be granted against the worldwide assets of a respondent. See Metrowangsa Asset Management Sdn Bhd & Anor v Ahmad b Hj Hassan & Ors  1 MLJ 654.
Injunctive relief is not generally issued against third parties. However, third parties may be bound by an injunction once they have notice of it. For example, banks and financial institutions are duty-bound to comply with a Mareva injunction when they are served with the order. Third parties may apply to intervene in the suit or vary or discharge an injunction.
A party who fails to comply with the terms of an injunction will be liable for contempt of court and may be fined or imprisoned. See Wee Choo Keong v MBF Holdings Bhd & Anor and Another Appeal  2 MLJ 217.
At trial, a witness generally gives their evidence-in-chief through a written witness statement previously filed in court and served on all parties, although further oral examination-in-chief is permissible. Thereafter, the witness is subject to oral cross-examination and re-examination. See Section 138 of the Evidence Act 1950.
The evidence of an expert witness is given in a written report signed by the expert and exhibited to an affidavit affirmed by him or her. See Order 40A r 3(1) of the Rules of Court 2012. Similar to witnesses of fact, an expert witness will also give their evidence-in-chief and is subject to cross-examination and re-examination.
Arguments by counsel after the trial are generally both written and oral. The court usually directs parties to exchange written submissions and will fix a hearing date to thereafter hear oral argument.
Interim applications such as injunctions, striking out, amendment of pleadings, discovery and summary judgment are heard in chambers as opposed to open court, and only counsel are entitled to be present.
The court will decide on interim applications based on affidavits filed by the parties, and written and oral submissions by counsel.
For every suit filed in court, a case management will be fixed. During case managements, the court will set timeframes and give directions for the preparation of each party’s case for trial. The court may impose sanctions for non-compliance with these directions. See Syed Omar bin Syed Mohamed v Perbadanan Nasional Bhd  1 MLJ 461.
The directions that may be given by the court during case managements include the filing of pre-trial documents such as the bundle of pleadings, bundle of documents, statement of agreed facts, statement of issues to be tried, list of witnesses, summary of case and witness statements. The court may also at this stage consider the possibility of settlement of any or all of the issues between the parties. See Order 34 r 2(2) of the Rules of Court 2012.
There are no jury trials in Malaysia.
Section 5 of the Evidence Act 1950 states that evidence may be given of facts in issue and relevant facts, but not others. The general rule is that all relevant evidence is prima facie admissible.
Hearsay evidence provides that oral evidence must be direct, in that the witness must have perceived the fact through the medium of his or her own senses.
Apart from oral evidence, it is common for documents to be adduced in evidence. Section 73A deals with the admissibility of documentary evidence in civil cases, where various conditions need to be fulfilled.
Further, Section 90A provides that in any criminal or civil proceedings, a document produced by a computer shall be admissible in evidence if the document was produced by the computer in the course of its ordinary use. This is so whether or not the person tendering the document is the maker.
When the court has to form an opinion on a point of foreign law or of science or art, or as to identity or genuineness of handwriting or finger impressions, the opinions of persons skilled in the relevant areas are relevant facts. See Section 45 of the Evidence Act 1950.
Parties may introduce expert testimony at trial through the procedure set out in Order 40A of the Rules of Court 2012. The evidence of an expert is to be given in a written report signed by the expert and exhibited in an affidavit affirmed by him or her, stating among other things that he or she accepts full responsibility for the report.
The expert’s duty is to assist the court on matters within his or her expertise. This duty overrides any obligation to the person from whom the expert has received instructions or by whom he or she is paid. See Batu Kemas Industri Sdn Bhd v Kerajaan Malaysia & Anor  7 CLJ 849.
The court can also on its own motion appoint an independent expert to assist it on any question of fact or opinion not involving questions of law or construction. See Order 40 Rule 1.
In general, the public are allowed to attend hearings which are conducted in open court, such as trials, appeals, judicial review and winding-up petitions.
However, this is subject to the court’s power to hear any matter in camera without the presence of the public and the press, if the court is satisfied that this would be in the interests of justice, public security or propriety or for other sufficient reasons. See Section 15(1) of the Courts of Judicature Act 1964.
Proceedings which are heard in chambers, such as an originating summons and interim applications, are not open to the public.
The judicial system in Malaysia is adversarial in nature. Courts generally adopt a non-interventionist role in the proceedings, and decide on questions of fact and law based on the evidence and arguments advanced by the parties.
The level of intervention by the court during a hearing varies depending on the style of individual judges. Some judges would read parties’ written submissions before the hearing and only ask for clarification from counsel during the hearing, while others will undertake a more active inquiry during the hearing.
As for judicial intervention during a witness’s testimony at trial, notwithstanding the court’s power to ask questions under Section 165 of the Evidence Act 1950, judicial intervention should not be excessive and the court should remain neutral and impartial during evidence taking. See Hong Yik Plastics (M) Sdn Bhd v Ho Shen Lee (M) Sdn Bhd & Anor  1 MLJ 743.
There are no rules stipulating when a decision must be delivered after a hearing or trial.
In the case of a hearing, the court may deliver its decision at the hearing, or reserve judgment to a later date if more time is required to consider the matter (usually one to two months).
In the case of a trial, the parties are usually directed to exchange written submissions after the conclusion of the evidence. A further hearing date will be fixed thereafter to hear oral arguments. The judgment or decision will normally be given one to three months after the oral arguments.
The typical timeframe for a commercial claim commenced by a writ of summons is as follows.
A suit may be settled either in court (by way of a consent order or judgment) or out of court by way of a private settlement.
Court approval to settle a suit is only required in certain circumstances, such as the settlement of a money claim on behalf of a disabled person. See Order 76 Rule 11 of the Rules of Court 2012.
The settlement of a suit can remain confidential if the parties enter into a settlement agreement with a confidentiality clause. However, in subsequent proceedings, the settlement agreement may be produced in court if the agreement is being challenged or relied on in evidence.
If parties choose to record the settlement in a consent order or judgment, this will be filed in court and will form part of the court record and is therefore generally accessible by the public.
Settlement agreements are enforced in the same way as any other contract. Therefore, a party seeking to enforce a settlement agreement will seek the usual contractual remedies for breach of contract such as damages and specific performance.
A settlement agreement may be set aside by filing an action for that purpose, on the basis that the settlement agreement is void or voidable. Grounds that may be raised include a lack of capacity to contract, mistake, illegality, fraud, undue influence, misrepresentation and coercion. See Part III of the Contracts Act 1950.
After full trial, litigants are able to obtain a variety of relief including monetary damages, declarations, temporary and perpetual injunctions and specific performance.
The recognised types of damages are as follows.
Whilst there are no rules limiting maximum damages, damages (other than aggravated and exemplary damages) are generally compensatory in nature and will not exceed the actual loss suffered by a plaintiff.
If the claim is for contractual liquidated damages, the maximum damages will be that stated in the liquidated damages clause. See Section 75 of the Contracts Act 1950.
A party may also contractually limit the amount of damages to be paid.
A successful party may obtain interest based on the pre-judgment period where a contract expressly provides for it, and at such rates provided for in the contract. The court also may award pre-judgment interest on debts or damages at such rates as it thinks fit for the whole or any part of the period between the date when the cause of action arose and the date of judgment. See Section 11 of the Civil Law Act 1956.
A successful party is entitled to obtain post-judgment interest on judgment debts based on the rates contractually provided for, or at the rate of 5% per annum as prescribed by the Chief Justice through Practice Direction No 1 of 2012, to be calculated from the date of judgment to satisfaction. See Order 42 Rule 12 of the Rules of Court 2012.
A domestic judgment can be enforced through the following means:
Under the Reciprocal Enforcement of Judgments Act 1958, a foreign judgment which is a monetary judgment made by a superior court from the reciprocating jurisdictions listed in the First Schedule (namely the UK, Hong Kong, Singapore, New Zealand, Sri Lanka, Brunei and certain states in India) may be registered in Malaysia.
The judgment creditor may apply to the High Court within six years from the date of the judgment to have it registered by filing an originating summons supported by an affidavit, which:
See Order 67 Rule 3 of the Rules of Court 2012.
The application may be resisted on the following grounds:
See Section 5 of the Act.
In other cases falling outside the scope of the Act, an action has to be filed on the judgment at common law. The judgment creditor will normally apply for summary judgment, relying on the foreign judgment as proof of the debt. The defences available against the suit are that the foreign court had no jurisdiction, the judgment was obtained by fraud, the judgment would be contrary to public policy, and the proceedings in which the judgment was obtained were opposed to natural justice. See Hua Daily News Bhd v Tan Chien Chin & Ors  1 LNS 131.
A party dissatisfied with a decision of the court may appeal to a higher court either as of right or with leave.
Appeals from the Magistrates’ and Sessions Courts are to the High Court, and appeals from the High Court are to the Court of Appeal. Most appeals are as of right, although some require leave. Appeals from the Court of Appeal are to the Federal Court with leave.
The Federal Court also has a limited jurisdiction under Rule 137 of the Rules of the Federal Court 1995 to review its own decisions.
The High Court can hear civil appeals from the Magistrates’ and Sessions Courts. A party is only entitled to appeal if the amount involved is more than MYR10,000 (unless the appeal is on a question of law or concerns child support and alimony payments in divorce cases), and is not an appeal against the dismissal of an application for summary judgment, dismissal of an application to strike out any writ or pleading and where an application to set aside a judgment in default is allowed. See Section 28 of the Courts of Judicature Act 1964.
The Court of Appeal can hear civil appeals from the High Court. A party is entitled to appeal as of right, except:
A party is not entitled to appeal to the Court of Appeal against the dismissal of an application for summary judgment or the dismissal of an application to strike out any writ or pleading and where an application to set aside a judgment in default is allowed. See Section 68 of the Courts of Judicature Act 1964.
The Federal Court can hear civil appeals from the Court of Appeal. A party intending to appeal must first obtain leave of the Federal Court and satisfy the following conditions under Section 96 of the Courts of Judicature Act 1964, namely that the appeal is against:
An appeal to the High Court must be lodged within 14 days from the date of the decision. See Order 55 Rule 2 of the Rules of Court 2012.
An appeal to the Court of Appeal must be lodged within 30 days from the date of the decision. See Rule 12 of the Rules of the Court of Appeal 1994.
An application for leave to appeal to the Federal Court must be filed within 30 days from the date of the decision. See Rule 47 of the Rules of the Federal Court 1995. If the Federal Court grants leave, the notice of appeal must be filed within the period directed by the Federal Court. See Rule 108 of the Rules of the Federal Court 1995.
In the case of an appeal after full trial, the appellate court will not interfere with the factual findings of the trial judge, save where the decision of the trial judge was plainly wrong as it could not reasonably be explained or justified and was one which no reasonable judge could have reached. See Jade Homes Sdn Bhd v Sivananthan Krishnan  7 CLJ 487.
In the case of other appeals, the decision of the lower court will be treated as involving an exercise of discretion, and there is a presumption that this discretion was correctly exercised. As such, the appellate court will only intervene if it is clearly satisfied that the lower court was wrong. See Vasudevan v T. Damodaran & Anor  2 MLJ 150.
In exceptional circumstances, new points that were not raised in the lower court may be raised for the first time in the appeal with leave, such as new points of law which arise from the factual matrix before the lower court. See Keng Soon Finance Bhd v MK Retnam  1 MLJ 457.
An appellate court does not generally impose conditions when granting an appeal, but may order appropriate consequential relief to give effect to its decision or in the interests of justice. See R Rama Chandran v The Industrial Court of Malaysia & Anor  1 CLJ 147.
Once an appellate court decides the appeal, it is generally functus officio and has no further powers. The appellate court may, however, grant a stay or other similar relief pending a further appeal, or issue consequential orders to clarify or give effect to its decision.
A successful party is usually entitled to costs from the losing party. While it is possible to submit a bill of costs to the court which will include details of the costs of the litigation (see Order 59 Rule 7(2) of the Rules of Court 2012), in practice the court will award a lump sum to the successful party as costs, which may not be representative of the actual costs incurred.
An award of costs may be challenged by way of an appeal.
In awarding costs, the court is required to take into account all relevant circumstances and, in particular, the following:
See Order 59 Rule 16 of the Rules of Court 2012.
The court may also take into account the following:
The court will not usually specifically award interest on costs.
However, interest on costs is claimable where the costs are part of a judgment debt. See Order 42 Rule 12 of the Rules of Court 2012 and Azlin Azrai bin Lan Hawari v United Overseas Bank (M) Bhd  5 MLJ 43. The rate is determined by the Chief Justice (currently 5% per annum) and is calculated from the date of judgment to satisfaction.
The general methods of alternative dispute resolution in Malaysia are arbitration, adjudication and mediation.
Arbitration is commonly resorted to in commercial disputes, and has to be contractually agreed as the chosen mode of resolving disputes.
Adjudication is commonly resorted to for construction disputes, where the proceedings are generally governed by the Construction Industry Payment and Adjudication Act 2012.
Mediation is used less frequently – in matrimonial disputes, for example.
Arbitration clauses are strictly enforced by the courts. A suit filed in violation of an arbitration clause will normally be stayed upon the application of the defendant. See Section 10(1) of the Arbitration Act 2005.
When a suit is filed, the court will usually raise the possibility of mediation with the parties during case managements. If parties agree, the mediation can be conducted either by the court or by an external mediator privately arranged by the parties.
The main arbitral institution in Malaysia is the Asian International Arbitration Centre (AIAC), which was formerly known as the Kuala Lumpur Regional Centre for Arbitration (KLRCA). AIAC has a framework for arbitration, adjudication and mediation proceedings, including an international panel of arbitrators, adjudicators and mediators and rules to cater for these proceedings.
The Malaysian Mediation Centre, established by the Bar Council of Malaysia, offers mediation services and has a panel of mediators.
The principal legislation that applies to both domestic and international arbitrations is the Arbitration Act 2005, which is based on the Model Law. Order 69 of the Rules of Court 2012 provides the procedural requirements for arbitration-related suits such as the enforcement of arbitral awards.
Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration, unless the arbitration agreement is contrary to public policy or the subject matter of the dispute is not capable of settlement by arbitration under Malaysian law. See Section 4(1) of the Arbitration Act 2005.
Pursuant to Section 6 of the Arbitration Act 2005, an award is final and binding and may be set aside only if one of the following circumstances in Section 37 is established:
An award may be enforced by applying to the High Court under Section 38 of the Arbitration Act 2005. Under Order 69 Rule 8 of the Rules of Court 2012, the application shall be made by an originating summons accompanied by an affidavit showing the written evidence which will be relied on, including the original arbitration agreement and the duly authenticated original award or, in either case, a duly certified copy thereof.
Once the application is allowed, the order giving permission to enforce the award shall be served on the respondent by delivering a copy to him or her personally or sending a copy to him or her at his or her usual or last known place of residence or business.
Within 14 days after the service of the order, the respondent may apply to set it aside. The award shall not be enforced until after the expiration of that period or until after the respondent’s application (if filed) has been finally disposed of. See Order 69 Rule 8.
There are no current proposals for dispute resolution reform in Malaysia.
COVID-19 affected the operation of courts in Malaysia from March 2020. The courts were not fully operational and parties were unable to physically attend court. However, from June 2020 the courts started actively conducting hearings using remote communication technology such as Zoom. The norm since then has been for hearings, and often trials, to be conducted remotely through videoconferencing platforms.
The court will normally give directions regarding the protocols to be adopted prior to the hearing or trial. In the case of trials, the directions include the use of soft copy documents, technological requirements and facilities, recording proceedings, and the location and supervision of witness testimony to ensure the integrity and fairness of the proceedings.
The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 came into force on 23 October 2020. Section 12 of the Act states that any limitation period specified in Section 6 of the Limitation Act 1953 which expired between 18 March 2020 and 31 August 2020 shall be extended until 31 December 2020.
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Trends and developments in Malaysia have moved away from COVID-19 as the world recovers from the pandemic. Attention has shifted to significant developments across the legal spectrum, as well as efforts to address global issues such as sustainability and raising standards in Malaysia to international levels.
Malaysia is unfortunately no stranger to corruption, as can be seen from the Transparency International Corruption Perception Index (CPI). In 2021, Malaysia fell five spots to 62 with a corruption index of 48. This declining score has been largely attributed to money politics, and the unsuccessful prosecutions of high-profile personalities in corruption cases.
However, the recent decision of the Federal Court (Malaysia’s apex court) regarding the former Malaysian Prime Minister should reduce this negative perception. The Federal Court in Dato’ Sri Mohd Najib bin Hj Abd Razak v Public Prosecutor and other appeals (No 1)  5 MLJ 85 upheld the accused’s conviction on seven charges of criminal breach of trust, money laundering and abuse of power involving MYR42 million from funds of SRC International Sdn Bhd (SRC) during his premiership. The evidence showed that the accused used his position as Prime Minister and Finance Minister at the time to ensure that a MYR4 billion loan could be disbursed to SRC. Additionally, by virtue of his overarching control of SRC, the accused had misappropriated and converted for his own use the sum of MYR42 million, resulting in wrongful gain to him and wrongful loss to SRC.
In light of the Federal Court’s decision, it is hoped that more efforts will be taken to combat corruption in Malaysia and to convincingly demonstrate that corruption will not be tolerated.
Housing Developers and Purchasers – the Battle Continues
The decision of the Federal Court in Ang Ming Lee & 34 Others v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan And Anor  1 CLJ 162 (“Ang Ming Lee”) had opened the floodgates for liquidated damages (LAD) claims by purchasers against housing developers.
In Malaysia, sale and purchase agreements between purchasers and developers for housing projects (SPAs) are standard form agreements statutorily prescribed by the Housing Development (Control and Licensing) Regulations 1989 (HDR). One of the contractual terms is that vacant possession must be delivered within a specified timeframe, failing which the developer will be liable to pay the purchaser LAD.
Previously, when a developer faced difficulty or anticipated difficulty in completing a project within the prescribed timeframe, the developer could apply to the Minister of Housing and Local Government (“Minister”) for an extension of time. As a matter of practice, the application would be made to the Controller of Housing in the Ministry of Housing and Local Government ("Controller”), who heads the Government unit administratively dealing with such applications. Both the Controller and the Minister had statutory powers under the HDR and the Housing Development (Control and Licensing) Act 1966 (HDA) respectively to grant an extension.
In Ang Ming Lee, the developer applied for an extension after the SPA was entered into. The Federal Court held that the Controller’s decision to grant the extension was ultra vires the HDA and HDR and invalid, as the Controller had no power to waive or modify the statutory SPA. The Federal Court also reaffirmed the strong pro-purchaser approach to be taken when construing the HDA and HDR.
The effect of Ang Ming Lee is that where a developer has obtained what was hitherto a valid extension from the Controller, the developer will still be bound by the statutory timeframe and hence will have to pay LAD to purchasers, notwithstanding the extension obtained. Ang Ming Lee, on its face, has retrospective effect, and therefore every developer that has obtained and relied on an extension from the Controller suddenly has potentially open-ended multimillion-ringgit liability.
Unsurprisingly, Ang Ming Lee has spawned multiple suits by purchasers against developers, which in turn have resulted in multiple appeals involving complex and novel legal issues. In 2022, the Federal Court has allowed applications for leave to appeal on several key legal questions, which will ultimately determine the true scope of Ang Ming Lee.
Once the Federal Court clarifies the scope of Ang Ming Lee, there will hopefully be an end to the uncertainty in the law on the validity of extensions of time obtained by developers for the delivery of vacant possession. This will benefit and bring certainty to the housing development industry as a whole, for both developers and purchasers.
Rising Damages for Medical Negligence
Recent years have seen a marked rise in damages awarded to plaintiffs in medical negligence cases in Malaysia, with the courts becoming increasingly willing to push the boundaries of orthodox legal principles to ensure that plaintiffs are fully compensated for their injuries.
One such example is the decision of the Court of Appeal (the intermediate appellate court) in Pantai Medical Centre Sdn Bhd v Fareed Reezal bin Arund (suing through his wife and litigation representative Wan Zafura bt Wan Kassim) and another appeal  4 MLJ 529 (“Fareed Reezal”). In this case, the plaintiff suffered serious brain injuries which resulted in his being in a Persistent Vegetative State (PVS). The hospital was found liable at first instance by the High Court. On appeal, the amount of damages was increased by the Court of Appeal.
In assessing the appropriate quantum for the plaintiff’s loss of earnings, the Court of Appeal noted the absence of documentary evidence which could readily have been provided by the plaintiff. Notwithstanding this, the Court of Appeal was persuaded by limited evidence and took the view that given the plaintiff’s designation as an executive director of a private limited company, a sum of MYR30,000 per month as loss of income was appropriate as a ‘nominal’ sum.
This ‘nominal’ sum, however, translated into total damages for loss of income (past and future) of MYR1,980,000, which would not usually be termed as ‘nominal’. In Malaysia, nominal damages are normally modest sums awarded where there has been a violation of a right and the existence of damage, but the quantum of that damage has not been proven. However, the income of an executive director is not difficult to substantiate, and ‘nominal’ damages of MYR1,980,000 are difficult to justify.
The impact of Fareed Reezal is that plaintiffs can now be awarded significant sums for loss of income, even though they are unwilling to substantiate their claims despite being able to do so if they wished.
While the decision of the Court of Appeal in Fareed Reezal is pending appeal in the Federal Court, leave to appeal was not granted on the award for loss of income. It is hoped that either the Federal Court, or a differently constituted Court of Appeal, will, in future cases, revisit the question of what is needed to substantiate a claim for loss of income, and what the parameters are for awards of ‘nominal’ damages.
Otherwise, damages will spiral out of control and lead to a consequent rise in indemnity insurance premiums and ultimately healthcare costs for patients.
Rights of Appeal Against Summary Determinations
Parliament has passed the Courts of Judicature (Amendment) Act 2021, which came into force on 1 October 2022. The amendments restrict a litigant’s right to appeal against decisions of the Subordinate Court and High Court involving the dismissal of applications for summary judgment, dismissal of applications to strike out pleadings and successful applications to set aside judgments in default.
The amendments will therefore require a more thorough consideration of litigation strategy by litigants and their legal advisers, and in particular on whether or not to commence summary disposal proceedings where the facts are in dispute and require viva voce evidence.
The amendments will also reduce the number of interlocutory appeals, and consequently the workload of the appellate courts, which are currently inundated with appeals.
Enhancement of Employees’ Rights
Malaysia, which already has a pro-employee legal framework, has moved to further meet international labour standards as outlined by the International Labour Organization (ILO), by passing amendments to enhance the protection and welfare of workers, including improving gender equality. The Employment (Amendment) Act 2022, which amends the Employment Act 1955 (EA), is scheduled to come into force on 1 January 2023.
Prior to the amendments, the EA applied to employees earning up to MYR2,000 per month and/or a specified group of employees. However, the EA now applies to all employees, with the exception of certain provisions (such as overtime payments) which do not apply to employees earning more than MYR4,000 per month.
Other key amendments include allowing workers to apply for flexible working arrangements, extending paid maternity leave from 60 days to 98 days, providing seven days of paid paternity leave, reducing maximum working hours from 48 hours per week to 45 hours, and requiring employers to exhibit notices to raise awareness of sexual harassment issues.
These amendments are a progressive way forward to ensure the protection of a larger category of employees, and are a good step forward for Malaysia.
Dubbed the “Generation End Game” or “GEG” Bill, the Control of Tobacco Product and Smoking Bill 2022 (“Bill”), which had been tabled for its first reading in July 2022, is set to revamp the existing framework of the sale and use of tobacco products in Malaysia. The most publicised aspect of the Bill is the proposed introduction of a complete prohibition of the sale of tobacco products, substitute tobacco products, smoking substances and smoking devices to persons born on or after 1 January 2007. The proposal is that possession of any of these products, smoking or the use of any smoking device, by such persons would constitute an offence.
The Bill also proposes to widen the ambit of regulated products to include substitute tobacco products, smoking substances and smoking devices (for example, e-cigarettes and vaping products), thus plugging a gap in the current legislative framework. The Bill as currently proposed will also see further prohibitions on the advertising, promotion and sponsorship of products.
Voting on the Bill was recently postponed, as Parliament has been dissolved pending general elections. However, it is inevitable that such a controversial Bill, if passed (whether in its current or a modified form), will be replete with challenges in court. These challenges are likely to range from the constitutionality of the generational ban given the enshrined right to equality and equal protection under the Federal Constitution, to human rights challenges to the broad powers vested in enforcement officers.
Growing Prominence of Environment, Social and Governance (ESG) Initiatives
Malaysia has committed herself to be carbon neutral by 2050 as part of the 12th Malaysia Plan. Regulators such as Bursa Malaysia (Bursa), the Securities Commission (SC), Bank Negara (the Central Bank) and the Ministry of International Trade and Industry (MITI) have announced or implemented various ESG initiatives in order to achieve this target. These initiatives include the launching of Malaysia’s Voluntary Carbon Market by the end of 2022, the enhancement of sustainability reporting requirements for companies listed on Bursa’s Main Market/ACE Market, the development of an ESG disclosure guide for Small and Medium Enterprises (SMEs), the implementation of the Climate Change and Principle-based Taxonomy and ASEAN Taxonomy for Sustainable Financing amongst financial institutions, and the introduction of a national ESG framework for the manufacturing sector. Moving forward, companies will have to align themselves with the Government’s vision, and ensure that they are compliant with ESG policies and regulations.
As can be seen from the above, trends and developments in Malaysia in the course of 2022 have moved away from COVID-19 and are largely geared towards making a better Malaysia. It will be interesting to see how the implementation of these new legal developments and regulatory frameworks progress in the coming years.
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