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.

The typical time taken from commencing proceedings to getting to trial is 12 to 24 months.

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 as litigation funding is not permitted in Malaysia.

The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia.

The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia.

The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia.

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 [2014] 8 CLJ 74.

The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia.

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 [2015] 2 CLJ 453.

The Limitation Act 1953 prescribes the following limitation periods:

• six years from the date of the breach or act for actions in contract and tort (Section 6(1)(a));
• where the action is based on fraud, concealment of fraud or mistake, time starts to run from the date of discovery of the fraud or mistake (Section 29(1));
• 12 years to enforce a judgment from the date it became enforceable (Section 6(3));
• 12 years to recover land from the date the right of action accrued (Section 9(1));
• no limitation period for actions to recover trust property in respect of a fraudulent breach of trust (Section 22(1));
• six years for actions to recover trust property in respect of a breach of trust from the date the right of action accrued (Section 22(2));
• for actions in negligence (excluding personal injury), where the damage was not discoverable before the expiry of six years, the limitation period will be extended by three years from the date of knowledge (Section 6(A)); and
• six years to enforce an arbitration award from the date on which it became enforceable (Section 6(1)(c)).

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:

• the cause of action arose;
• the defendant or one of several defendants resides or has their place of business;
• the facts on which the proceedings are based exist or are alleged to have occurred; and
• any land the ownership of which is disputed is situated.

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 [2012] 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 them at their 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 other things, that they have 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 [2012] 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 [2012] 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 [1984] 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 [1993] 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 [2012] 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 [2003] 1 MLJ 149.

An interested non-party may apply to intervene in a suit by seeking an order to add them 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 they have 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 [1969] 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 plaintiff is ordinarily resident out of the jurisdiction;
• the plaintiff is a nominal plaintiff who is suing for the benefit of some other person and there is reason to believe that they will be unable to pay the defendant’s costs if ordered to do so;
• the plaintiff’s address is not stated in the writ or is incorrectly stated; or
• the plaintiff changed their address during the proceedings to evade the consequences of the litigation.

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 their possession, custody or power and may at the same time or subsequently also order them 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 their 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 them 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 their 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 [2017] 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 their 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 their lawyer, documents given by a client to their lawyer and legal advice given by a lawyer to their 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 their 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 it does not apply to communications in furtherance of an illegal purpose.

Communications between an in-house counsel and their 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 their undertaking as to damages. See Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193.

The types of injunctions available include the following:

• a Fortuna injunction to restrain a party from presenting a winding-up petition – see Mobikom v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316;
• a Mareva injunction to restrain a defendant from parting with their assets, including a worldwide Mareva injunction – see The Customs And Tax Administration Of The Kingdom Of Denmark v Saling Capital Ltd & Ors And Other Appeals [2021] 7 CLJ 857;
• an Anton Piller order to allow the plaintiff’s representatives to enter a defendant’s premises to inspect and remove material – see Arthur Anderson & Co v Interfood Sdn Bhd [2005] 6 MLJ 239;
• an anti-arbitration injunction to restrain a party from proceeding with arbitration proceedings – see Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 5 MLJ 1;
• an anti-suit injunction to restrain judicial proceedings to prevent a multiplicity of proceedings – see Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 5 MLJ 1;
• an injunction for the detention, custody or preservation of any property which is the subject matter of the suit, or for the inspection of any such property in the possession of a party to the suit – see Order 29 Rule 2 of the Rules of Court 2012;
• an injunction for samples to be taken of any property which is the subject matter of the suit, for any observation to be made on such property or for any experiment to be tried on or with such property – see Order 29 Rule 3;
• an injunction to prevent the infringement of intellectual property – see Radion Trading Sdn Bhd v Sin Besteam Equipment Sdn Bhd & Ors [2010] 8 MLJ 648; and
• an injunction to prevent the disclosure of confidential information – see Teoh Chong Kean v Yeoh Tai Chuan & Anor [2018] 2 MLJ 669.

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 [2002] 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:

• a clear and concise statement of the facts giving rise to the claim and the application;
• the facts relied on to justify filing the application ex parte including details of any notice given to the other party or, if notice has not been given, the reason for not giving notice;
• any answer by the other party to the claim or application;
• any facts which may lead the court not to grant the application;
• any similar application made to another court; and
• the precise relief sought.

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 they 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 [2005] 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 [1993] 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 them. 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 on 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 [2013] 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 (key points of disagreement that determine the outcome of the case) and relevant facts (supporting evidentiary facts that clarify, or give context to the facts in issue), 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 their 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 them, stating among other things that they accept full responsibility for the report.

The expert’s duty is to assist the court on matters within their expertise. This duty overrides any obligation to the person from whom the expert has received instructions or by whom they are paid. See Batu Kemas Industri Sdn Bhd v Kerajaan Malaysia & Anor [2015] 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 they 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 [2020] 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.

• After the writ of summons and statement of claim are duly served on the defendant, the defendant has 14 days to enter an appearance and a further 14 days to file a defence (and counterclaim if required).
• Thereafter, the plaintiff has 14 days to file a reply to defence (and defence to counterclaim if required).
• Usually, at the case management after the close of pleadings, the court will give pre-trial directions which may include timelines for the filing of interlocutory applications and pre-trial documents.
• Subject to the disposal of any interlocutory applications, the court will fix trial dates. This will depend on the court’s and counsel’s schedules, and may generally be fixed eight to 15 months from the date of filing the writ.
• After the evidence is concluded at trial, it is usual for the court to give parties up to two months to file and exchange written submissions. A hearing date for oral submissions will also normally be fixed.
• Although there is no fixed timeline for judgment to be delivered, the court will usually deliver judgment one to three months after oral submissions.

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 therefore generally be 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 forms of relief including monetary damages, declarations, temporary and perpetual injunctions and specific performance.

The recognised types of damages are as follows.

• Special damages, where the damage suffered is readily quantifiable in monetary terms. See Laksamana Realty Sdn Bhd v Goh Eng Hwa and Another Appeal [2006] 1 MLJ 675.
• General damages, where the damage suffered is not readily quantifiable in monetary terms. See Laksamana Realty Sdn Bhd v Goh Eng Hwa and Another Appeal [2006] 1 MLJ 675.
• Aggravated damages, where the defendant’s conduct has injured the feelings and dignity of the plaintiff. See Cheong Fatt Tze Mansion Sdn Bhd v Hotel Continental Sdn Bhd and Hong Hing Thai Enterprise Sdn Bhd (Third Party) [2011] 4 MLJ 354.
• Exemplary damages, which are punitive damages to punish and deter, where there is oppressive, arbitrary or unconstitutional action by servants of the government, or where the defendant’s conduct has been calculated to make a profit for themselves which may exceed the compensation payable to the plaintiff. See Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1993] 3 MLJ 352.

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:

• a writ of seizure and sale, where the judgment debtor’s property is seized by the court and sold through an auction (Order 47 of the Rules of Court 2012);
• a garnishee order made against a debtor of the judgment debtor, to pay sums due to the judgment debtor directly to the judgment creditor (Order 49);
• a charging order imposed on any interest to which the judgment debtor is beneficially entitled in any securities (Order 50);
• the appointment of a receiver to manage income from the judgment debtor’s assets and make payment to the judgment creditor (Order 51);
• bankruptcy proceedings against a judgment debtor who is an individual, whose property will vest in the Director General of Insolvency for payment of all their debts;
• winding-up proceedings against a corporate judgment debtor, whose property will vest in a liquidator for payment of all its debts and thereafter the company will be dissolved; or
• a judgment debtor summons requiring the judgment debtor (in the case of an individual) or an officer of the judgment debtor (in the case of a company) to attend court and be orally examined on the judgment debtor’s ability to satisfy the judgment (Section 4 of the Debtors Act 1957).

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:

• exhibits the judgment or a verified, certified or duly authenticated copy thereof, and where the judgment is not in the English language, a translation thereof in that language certified by a notary public or authenticated by affidavit;
• states the name, trade or business and the usual or last known address of the judgment creditor and the judgment debtor respectively;
• states to the best of the information or belief of the deponent that:
1. the judgment creditor is entitled to enforce the judgment;
2. either at the date of the application the judgment has not been satisfied, or the amount in respect of which it remains unsatisfied;
3. the judgment does not fall within any of the cases in which a judgment may not be ordered to be registered under the Act; and
4. at the date of the application the judgment can be enforced by execution in the country of the original court and, if it were registered, the registration would not be liable to be set aside under the Act;
• specifies the amount of the interest, if any, which under the law of the country of the original court has become due under the judgment up to the time of registration; and
• where the sum payable under the judgment is expressed in a currency other than the currency of Malaysia, states the amount which that sum represents in the currency of Malaysia calculated at the rate of exchange prevailing at the date of the judgment.

See Order 67 Rule 3 of the Rules of Court 2012.

The application may be resisted on the following grounds:

• the judgment is not from a reciprocating country or was registered in contravention of the Act;
• the courts of the country of the original court had no jurisdiction in the circumstances of the case;
• the judgment debtor did not receive notice of the proceedings in sufficient time to enable them to defend the proceedings and did not appear;
• the judgment was obtained by fraud;
• enforcement of the judgment would be contrary to public policy in Malaysia;
• the rights under the judgment are not vested in the person by whom the application for registration was made; and
• the court is satisfied that the matter in dispute in the proceedings in the original court had previously to the date of the judgment been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.

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 [1985] 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:

• where the amount claimed is less than MYR250,000 (leave is required);
• where the judgment or order is made by consent of parties;
• where the judgment or order relates to costs only (leave is required);
• where by any written law for the time being in force the judgment or order is expressly declared to be final; or
• where there is a decision in a summary way on an interpleader summons where the facts are not in dispute (leave is required).

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:

• a judgment or order of the Court of Appeal in respect of a matter decided by the High Court in its original jurisdiction involving a question of general principle decided for the first time, or a question of importance upon which further argument and a decision of the Federal Court would be to public advantage; or
• a decision as to the effect of any provision of the Constitution, including the validity of any written law relating to any such provision.

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 [2021] 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 [1981] 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 [1989] 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 [1997] 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:

• the complexity of the item or of the cause or matter in which it arises, and the difficulty or novelty of the questions involved;
• the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor or counsel;
• the number and importance of the documents prepared or perused;
• the place and circumstances in which the business is involved and transacted;
• the importance of the cause or matter to the client; and
• where money or property is involved, its amount or value.

See Order 59 Rule 16 of the Rules of Court 2012.

The court may also take into account the following:

• any offer of settlement, or offer to contribute to settlement of the claim – see Order 59 Rules 4 and 8;
• whether anything is done, or an omission is made, improperly or unnecessarily by or on behalf of a party – see Order 59 Rule 5;
• the conduct of the parties, including conduct before and during the proceedings – see Order 59 Rule 8;
• the conduct of the parties in relation to any attempt to resolve the suit by mediation or other means of dispute resolution – see Order 59 Rule 8;
• the extent to which the parties have followed any relevant pre-action protocol or practice direction – see Order 59 Rule 8; and
• costs due to unnecessary claims or issues raised in the proceedings – see Order 59 Rule 10.

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 [2017] 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 UNCITRAL Model Law on International Commercial Arbitration. 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:

• a party to the arbitration agreement was under an incapacity;
• the arbitration agreement is not valid under the law to which the parties have subjected it or under the laws of Malaysia;
• the applicant was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present that party’s case;
• the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;
• the award contains decisions on matters beyond the scope of the submission to arbitration;
• the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or was not in accordance with the Act; or
• the award is in conflict with the public policy of Malaysia.

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 them personally or by sending a copy to them  at their 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.

The primary area of growth for commercial disputes is the increasing use of ADR (see 12. Alternative Dispute Resolution (ADR)). The increase in awareness among businesses and legal professionals of the advantages of ADR has led to a broader acceptance and integration of these methods. Some of the trends illustrating this growth are outlined below.

There is a noticeable rise in the adoption of mediation and arbitration to resolve commercial disputes, driven by the desire for cost-effective and timely outcomes.

Institutions like the Asian International Arbitration Centre (AIAC) in Kuala Lumpur have significantly enhanced their services to cater to specific types of disputes, including construction and technology.

For example, the AIAC’s Standard Form of Building Contracts (SFC) addresses gaps in existing Malaysian construction contracts. This free and customisable suite offers clear terms, dispute resolution mechanisms such as mediation, and introduces a “contract administrator” to ensure checks and balances while aligning with legal standards like the Arbitration Act 2005 and the Construction Industry Payment and Adjudication Act 2012. The SFC’s unified contract structure supports party autonomy, includes anti-bribery measures and aims to reduce conflicts and project deadlocks.

The AIAC has also updated its general Arbitration Rules to accommodate complex commercial disputes, including provisions for multi-party and multi-contract arbitration, joinder of additional parties and consolidation. These updates enhance the flexibility of arbitration across sectors such as banking, finance, construction and technology.

Courts are increasingly encouraging mediation as an initial step in dispute resolution to help alleviate case backlogs and promote quicker settlements.

The rise of online dispute resolution platforms is accelerating due to business digitalisation. These platforms facilitate online mediation and arbitration, making ADR more accessible and efficient, especially for cross-border disputes, thereby meeting the growing need for modern and flexible dispute resolution solutions.