In respect of machinery breakdown, "if any difference arises as to the amount paid under this certificate (liability being otherwise admitted), such difference shall be referred to the decision of an arbitrator". 13 KUALA LUMPUR: Former prime minister Najib Razak has applied for a stay of proceedings of the suit filed by Damansara MP Tony Pua for alleged misfeasance in public office related to the 1MDB case. This has helpfully given parties to arbitration comfort that the courts will give effect to the clear intention of Parliament, as enunciated in the statute, to uphold the party autonomy principle by ensuring that no party is allowed to depart from what they have agreed to voluntarily in an agreement without valid justification. Overview Insufficient grounds to deny a stay LexisNexis Civil Litigation Series: Stay of Proceedings. 6. In relation to this, the Federal Court was satisfied that the requirements were fulfilled. Learning and understanding the law and the Rules of the High Court related to stay of execution proceedings of the following: o Power to stay proceedings in an interpleader o Power to stay execution by writ of seizure and sale o Stay of proceedings pending appeal to judge in chambers Three offences of same kind within twelve months may be charged together 165. The third and most recent decision enforced the two earlier decisions and reiterated the Malaysian courts' position on staying proceedings pending a reference to arbitration. In the recent case of Gulf Hibiscus Ltd v Rex International Holding Ltd & another [2017] SGHC 210, the Singapore High Court, affirmed on appeal, a decision granting a stay of proceedings in favour of arbitration upon the application of a non-party to the arbitration agreement, where arbitration proceedings were yet to have been commenced. 3. Recall of witnesses when charge altered 163. The Federal Court's decision shows the court's reluctance to interfere with the principle of party autonomy. Based on the arbitration clauses, the respondent applied to the court for a stay of the proceedings pending reference to arbitration. LAWS AND REGULATIONS GOVERNING ENFORCEMENT OF CIVIL CASE JUDGMENTS The general salient provisions governing enforcement of civil judgments in Malaysia are: i. S. 17 of the Courts of Judicature Act 1964 [Act 91]; ii. ILO is a premium online legal update service for major companies and law firms worldwide. 1. 17, r. 7) 7. 17, r. 7A) 7A. ICLG - Litigation & Dispute Resolution Laws and Regulations - Malaysia covers common issues in litigation and dispute resolution laws and regulations – including preliminaries, commencing proceedings, defending a claim, joinder & consolidation and duties & powers of the courts – in 45 jurisdictions. Introduction Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] SGCA 65. The Gan Partnership website can be accessed at www.ganlaw.my. Holding of the High Court The High Court granted Hanjin’s application on a temporary basis, pending a full hearing involving other interested parties such as various creditors. Right to take Proceedings . Jamil, in handing down his decision, said there are no special circumstances in which the court can allow the application to stay the forfeiture proceedings. Case settlement conferences given a 'festive' touch - Hong Kong, Beware: High Court refuses permission to rely on new witness statement prepared part way through trial - United Kingdom, Parties can now request an extension to object to expert reports - Turkey, Clarification of rules on fast-track appeal proceedings - France, Court rules former director of AIAC's directorship is non-justiciable, Derivative proceedings: leave of court is substantive legal requirement, Competing claims in curial and arbitral proceedings: recent anti-arbitration injunction developments. CIRCUMSTANCES, APPLICATION FOR STAY OF PROCEEDINGS DISMISSED GOVERNMENT OF MALAYSIA v. MNMN Lumpur I S S U E S Whether special circumstances exist to warrant the grant of a stay of proceedings? (2) The court, in granting a stay of proceedings pursuant to subsection (1), may impose any conditions as it deems fit. Malaysia: Court Of Appeal Refuses Stay Of Proceedings Where Party Acts Inconsistently With An Express Reservation Of Right To Refer Dispute To Arbitration.Legal News & Analysis - Asia Pacific - Malaysia - Dispute Resolution This application must be made at the court of first instance to the court appealed from (see Silver Concept Sdn Bhd v Brisdale Rasa Development Sdn Bhd (formerly known as Ekspedisi Ria Sdn Bhd) [2002] 4 MLJ 113). The debtor could be debt to individuals or companies When a party is appealing a decision of a lower court to a higher court, it is trite that appeals do not operate as a stay of execution (see s.57 of the Court of Judicature Act 1964). In a recent decision Takenaka Corporation v Tam Chee Chong and another [2018] SGHC 51, Justice Aedit Abdullah granted a stay of proceedings under the Arbitration Act of Singapore (Cap 10, 2002 Rev Ed) (the “Arbitration Act”), for an appeal against the judicial managers’ rejection of a creditors’ proof of debt pursuant to Section 75 of the Companies Regulations. The Benefits of Filing a Police Report for Fraud Cases, Preparing your Appeal Papers to be Filed in the Court of Appeal, Offer To Settle vs Trial: Alternatives to Court Drama, The Erinford Injunction: Maintaining Status Quo Pending Appeal. The winding up is merely stayed moving forward, and not set aside or rescinded. Subsequently, the appellant suffered substantial losses and damage as a result of a disruption to its smelting operation caused by an extensive power outage, which forced the plant to be shut down temporarily. The second type of stay is one that is ordered by the judge either on application of the accused or in limited circumstances at the judge's own initiative. In explaining what special circumstances are, the Court of Appeal case of Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 3 MLJ 49 held at p67 that: “The approach taken by most judges appears to be that a successful litigant should not be deprived of the fruits of a judgment obtained in his favour, unless there are special circumstances (or special grounds) that justify a stay of execution to be granted. The clear difference between the parties regarding the amount to be paid as indemnity under the policy was sufficient to bring the dispute within the scope of the arbitration clause. The court will consider whether other safeguards would suffice to prevent any prejudice arising from the parallel proceedings. Application for Stay. However, it should be noted that since the grant of a stay is a matter within the discretion of the court, then appellate intervention may only be warranted if it can be shown that the discretion was exercised contrary to established judicial principles. In its first-instance decision, the high court allowed the stay application pending arbitration pursuant to Section 10(1) of the Arbitration Act 2005 as the parties had clear arbitration clauses which formed part of the contract between them and were not null and void or incapable of being performed. R. v. Goldberg, 2020 QCCQ 4548, para. (1) This case restates the Malaysian courts' position in respect of their intervention in arbitration. Trial for more than one offence 166. The two arbitration clauses provided as follows: However, the appellant submitted that the arbitration clauses were not part of the insurance contract between the appellant and the respondent and therefore there was no arbitration agreement in place and Section 10 of the act had no applicability. Where a defendant to an action applies for relief under this Order in the action, the Court may by order stay all further proceedings in the action. An ad interim stay does not mean that a winding up petition cannot be filed as bankruptcy and winding up proceedings was not within the ambit and meaning of ‘execution’ proceedings as provided by O 46 r 1 of the Rules of High Court 1980 which states as follows: In addition, if a binding arbitration agreement exists between the parties, the court must grant an order to stay the court proceedings pending reference to arbitration … Ever wondering why the law works the way it does, Iyas constantly pushes the limits of his curiosity to find the ever elusive “Answer” to all of his questions. The Court of Appeal upheld the decision of the High Court to lift a stay of court proceedings that had previously been granted on case management grounds. 2. Power to stay proceedings (O. Three offences of same kind within twelve months may be charged together 165. On August 8, last year, Najib filed an application for a stay of proceedings of the IRB’s suit, seeking him to pay RM1.69 billion in income tax, pending an appeal on the tax assessment to IRB. The Applicants’ applications for stay are based on the Applicants’ personal claims for declaratory orders and ancillary matters, such as fraud, damages, an account of monies received and inquiries into the monies remaining in the respondent's possession; suggestions that avoiding arbitration will save time, costs or expenses of the parties; and. Whether it is unjust for the Plaintiff to file the current Besides granting a stay of the court proceedings, antisuit injunctions restraining a party from commencing court proceedings in other jurisdictions in breach of an arbitration agreement which provides Malaysia as the seat of arbitration may be granted by the courts. There are two appellate courts with appellate jurisdiction: the Court of Appeal and the Federal Court. The only way is for that party to apply to the court for stay the arbitration proceedings by way of an injunction. The sum insured for machinery breakdown was RM200 million and the sum for lost profits was RM100 million. S. 4 of the Subordinate Courts Rules Act 1955 [Act 55] and iii. This Practice Note considers the question of when court proceedings can be stayed. Transfer of Proceedings . The Court of Appeal agreed with the high court and ruled that the court had no discretion but to grant a stay of the proceeding, save for the exception set out in Section 10(1) of the Arbitration Act 2005; hence, the appeal was dismissed unanimously. It proves clarity to lawyers and the inferior courts regarding where the law stands in relation to the courts' power to stay proceedings pending arbitration. 4. This book provides a thorough discussion on the pre-arbitration relief, focusing on stay of court proceedings when an action is instituted in breach of an arbitration agreement, and anti-suit injunctions when an action is instituted or threatened to be instituted in a foreign court in … Your email address will not be published. It identifies scenarios in which a party may apply for a stay of proceedings, including to allow for: a jurisdictional challenge; arbitration; an attempt to settle; related criminal proceedings; an opportunity to comply with a procedural requirement or court order etc. Malaysia: Court Of Appeal Refuses Stay Of Proceedings Where Party Acts Inconsistently With An Express Reservation Of Right To Refer Dispute To Arbitration.Legal News & Analysis - Asia Pacific - Malaysia - Dispute Resolution On Aug 8 last year Najib filed an application for a stay of proceedings of IRB’s suit seeking him to pay RM1.69 billion in income tax, pending his appeal on the tax assessment to IRB. Order-41 Rule-5(1): “Stay by Appellate Court-An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may 161. The appellant commenced legal proceedings before the high court against the respondent for, among other things, an indemnity by the respondent under the policy in respect of all losses and damage suffered by the appellant arising out of the incident and various declaratory orders and damages for breach of the policy and fraud committed by the respondent in the issuance of the policy. The Federal Court remarked that even in cases where the court doubts the validity of the arbitration clause or where it is arguable whether the subject matter of the claim falls within the scope of the arbitration clause, the court should nevertheless lean more towards granting a stay pending arbitration, pursuant to Section 10 of the act. He submitted that the appellate court should not interfere. The reason for this is well established in that the Courts will not deprive a successful party of the fruits of their litigation (see Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116). You need to be logged in to make a comment. TEE International said in a bourse filing on Saturday that MDIS (Malaysia) Sdn Bhd has commenced two sets of arbitration proceedings against its wholly-owned Malaysian subsidiary TEE E&C Malaysia Sdn Bhd and the company in Singapore on March 6, 2020. This means in effect that the court proceedings against the third parties or non-parties not caught by the arbitration agreement would be heard and determined first, followed by the arbitration proceedings … Required fields are marked *. There is no clear pronouncement from the courts. The High Court ordered that: In addition, if a binding arbitration agreement exists between the parties, the court must grant an order to stay the court proceedings pending reference to arbitration on application by any party to the agreement for a stay order. This would mean that when judgment has been laid down, the successfully party may proceed to enforce and execute it even if an appeal has been filed by the opposing side. Notwithstanding the above, one of the most common special circumstances used to in an application for a stay is the issue that refusal to grant one would render an appeal nugatory. there must be a binding arbitration agreement or clause between the parties; and. The grounds put forward in the applications for stay are not special circumstances which could warrant the Court to grant stay. This update summarizes three arbitration disputes involving construction contracts. Four days later, the defendant filed an application to stay the court proceedings under section 10(1) of the Arbitration Act 2005 (“Act”), on the basis that the subject matter of the dispute fell within the arbitration clause contained in clause 29.3 of the JVA (“Stay Application”). This is surely not what discretion is all about.”. 4. Joinder of Parties . Datuk Seri Abdul Azeez Abdul Rahim is pictured at the Kuala Lumpur Court Complex August 19, 2020. ― Picture by Firdaus Latif. Separate charges for distinct offences 164. Thus, they cannot be treated as separate heads and one cannot be an alternative to the other. The debtor could be debt to individuals or companies It is noteworthy that the courts are not only concerned about upholding Parliament's intention that a stay of proceedings pending reference to arbitration is mandatory unless otherwise exempted, but also to respect the core principle of party autonomy entrenched in Malaysian law. The court had to decide whether the appellant's claim in the court proceedings fell within the ambit or scope of the arbitration clauses. KUALA LUMPUR, Feb 28 — The High Court here today dismissed Datuk Seri Najib Razak’s application for a stay of proceedings of the Inland Revenue Board’s (IRB) suit seeking the former prime minister to pay RM1.69 billion in income tax, pending an appeal on the tax assessment to IRB. Halsbury’s Laws of England, 3rd Edition, Volume 17, paragraph 455, page 272 under the heading Grounds on which stay is granted states: —, “The court has an absolute and unfettered discretion as to the granting or refusing of a stay, and as to the terms upon which it will grant it, and will, as a rule, only grant a stay if there are special circumstances, which must be deposed to on affidavit unless the application is made at the hearing. 2. This update examines the Federal Court's decision in Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd. 5. In other words, special circumstances is the genus of which nugatoriness is a species. Misjoinder and Non-joinder of Parties . (2) At issue was a payment pursuant to a retention bond issued by the plaintiff bank in favour of the first defendant. However, a stay is sometimes used as a device to postpone proceedings indefinitely. Given that the respondent had admitted its liability, the Federal Court was satisfied that the only dispute left was the issue of the amount or quantum to be paid. The Federal Court's decision provides a useful reminder to parties that they are bound by what they have agreed to in the arbitration agreement, including reference to another document where those terms can be found, regardless of whether they go to the trouble of reading them. A) Where admiralty proceedings are stayed pursuant to subsection (1), the court granting the stay may, if in those proceedings 14 Laws of Malaysia A If it has been shown that an appeal would be rendered nugatory if stay was refused what it means is that a special circumstance has been established. The affidavit in support must further demonstrate the existence of the special circumstances based on a specific case’s own factual matrix and it must relate to the enforcement of the judgment (see Kosma Palm Oil Mill). Curious and inquisitive. The court's decision was based on the fact that even if the terms of an arbitration agreement are only referred to in the overall agreement, they are still binding – as if they were written in the latter agreement. The Federal Court affirmed the Court of Appeal's decision and made the following findings. Prepared by: Akmal Marizalee & Jamielyn Jimmy GROUP B 2010937999 Rohani Ahmad Akmal Marizalee Civil Procedure; preliminary matter Preliminary Matter Parties - Parties in action (whether suing or being sued) must be;- a) Sui juris (age of majority); which the Age of Majority Act provided as 18 years old. Government Proceedings 7 LAWS OF MALAYSIA Act 359 GOVERNMENT PROCEEDINGS ACT 1956 An Act relating to proceedings by and against the Federal Government and the Governments of the States. The decision in Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd has clarified that once the parties agree to submit to arbitration in the event of disputes and put that agreement into writing, the courts will be less willing to allow one party to subsequently seek to depart from the arbitration agreement without sufficient justification. Datuk Seri Abdul Azeez Abdul Rahim is pictured at the Kuala Lumpur Court Complex August 19, 2020. ― Picture by Firdaus Latif. Stay of proceedings if prosecution of offence in altered charge requires previous sanction 162. However, the courts will be willing to stay execution if it is apparent that special circumstances exists on the facts that warrant the grant of a stay. In respect of loss of profits, "if any difference arises as to the amount to be paid under this certificate (liability being otherwise admitted), such difference shall be referred to the decision of an arbitrator". Since the Applicants’ leave application had failed, the issue of stay of proceedings must also fail. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. 161. All standard forms of contract in Malaysia provide arbitration as the major method of dispute resolution. Four days later, the defendant filed an application to stay the court proceedings under section 10(1) of the Arbitration Act 2005 (“Act”), on the basis that the subject matter of the dispute fell within the arbitration clause contained in clause 29.3 of the JVA (“Stay … 5. Should the court refuse your application for a stay, the only way for a stay to be implemented after that is to appeal to a higher court as held in the High Court case of MBf Insurnce Bhd v Syarikat Lektrik Heap Seng [2002] 2 MLJ 444. LexisNexis Civil Litigation Series: Stay of Proceedings; Print. Change of Parties by Reason of Death or Bankruptcy . this agreement cannot be null and void, inoperative or incapable of being performed. Iyas is the kind of person who constantly has something on his mind. Dissatisfied with the Court of Appeal's decision, an appeal was made to the Federal Court. 20 December 2018. I also granted the interim stay on enforcement sought by the plaintiff. I am of the opinion that the list of factors constituting special circumstances is infinite and could grow with time. Trial for more than one offence 166. Malaysia: Litigation & Dispute Resolution Laws and Regulations 2020. This was recognised in the case of Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 where the Federal Court at para [18] held that: “… It is therefore clear beyond doubt that there are many factors that may constitute special circumstances and the fact that an appeal would be rendered nugatory if stay was refused is the most common one. The Federal Court has now found that the clear effect of Section 10(1) of the Arbitration Act 2005 is to render a stay mandatory if the court finds that all the relevant requirements have been fulfilled. 7. The section 10 of the Act allows the other party to apply to the court for stay of the court proceedings provided that he has not taken any other steps in the proceedings. This type of stay is discretionary and can be reversed at the discretion of the Crown. S. 4 of the Subordinate Courts Rules Act 1955 [Act 55] and iii. [Peninsular Malaysia—1 April 1958, L.N. Recall of witnesses when charge altered 163. 470. The court ought to give a wide interpretation to the arbitration clause to serve, as far as the language used by the parties in the arbitration clause will permit, the commercial purpose of the arbitration clause. Stay of Proceedings by Crown However, the high court's judgment was appealed. In Malaysia, the main methods of enforcement are to issue a judgment debtor summons, garnishee proceedings, committal proceedings or an attachment of earnings against the defaulter. the proceedings, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. It is an example of special circumstances. 4 The plaintiff has appealed against my decision on the defendant’s stay Valid arbitration agreement We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters. subjected the stay to any decision made in the plaintiff’s application to grant a stay of enforcement of the adjudication determination pending the disposal of proceedings in the suit. Malaysia has a two-tier system of appeal. not operate as a stay. Malaysia: Litigation & Dispute Resolution Laws and Regulations 2020. (g) On 19.05.2017, the Appellant filed an application pursuant to Order 12 rule 10 (2) Rules of Court 2012(“ROC”) to stay the proceedings on the basis that Malaysia is not the proper forum pursuant to the exclusive jurisdiction clause. Whether Section 106 of the Income Tax Act 1967 is contrary to Article 121(1) of the Federal 3. payment of money, the Court shall, if it grants stay without requiring security, record its reasons for so doing”. The materials contained on this website are for general information purposes only and are subject to the disclaimer. It identifies scenarios in which a party may apply for a stay of proceedings, including to allow for: a jurisdictional challenge; arbitration; an attempt to settle; related criminal proceedings; an opportunity to comply with a procedural requirement or court order etc. First, Malaysian courts no longer consider whether a ‘dispute’ exists for the purposes of an application to stay court proceedings. 1.Venue of Proceedings . Joinder of Causes of Action . 1. Scope of arbitration clause Section 10(1) reads: CIRCUMSTANCES, APPLICATION FOR STAY OF PROCEEDINGS DISMISSED GOVERNMENT OF MALAYSIA v. 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