Covid-19: Should Malaysia adopt Specific Law?

The company sits at the apex of the Singapore-headquartered Otto Marine Group, which has some 70 subsidiaries, associate companies and indirect subsidiaries, employing more than 622 employees worldwide. The Otto Marine Group is in the business of investment holding, construction, repair and servicing of vessels, chartering and leasing of vessels, and offshore services. The sole director and effective shareholder of Otto Marine is Malaysian tycoon Datuk Seri Yaw Chee Siew.

Summary

There have been welcome developments in the law governing corporate restructuring and insolvency introduced by the new Malaysian Companies Act 2016.

The new Companies Act marks major legislative changes to Malaysian corporate law. Two significant developments introduced under the Companies Act 2016 relate to judicial management and corporate voluntary arrangements.

Judicial management

Introduction

Typically, once an order has been drawn up and sealed, the court becomes functus officio and has no power to vary or set aside the same. However, an exception to this rule is where an order has been irregularly obtained. This exception was recently expounded on in the leading Federal Court decision of Badiaddin bin Mohd Mahidin v Arab Malaysian Finance Bhd.(1)

Introduction

It is well known that directors have a duty to act in good faith and in a company's best interests. This duty takes centre stage, especially in times when a company's survival is threatened.

Introduction

The Federal Court recently addressed the proper construction of Section 93(3) of the Bankruptcy Act 1967 and Rule 276 of the Bankruptcy Rules 1967 in Ambank (M) Berhad v Lim Sue Beng.(1) In this appeal, the Federal Court was requested to decide on the following question of law:

In the recent decision of Cubic Electronics Sdn Bhd (in liquidation) v Mars Telecommunications Sdn Bhd [2019] CLJ 723 (“Cubic Electronics”), the apex court of Malaysia revisited the principles on forfeiture of deposits and the treatment of liquidated damages clauses in contracts.  

FACTS

In a recent judgement delivered by the Commercial Division of the Supreme Court in Atelier Etude Limousin & Ors vs BPCE International Et Outre Mer & Anor 2014 SCJ 166 the court confirmed the prevailing practice that foreign companies could be granted fixed or floating charges by Mauritian entity as security for a financing.

In 2010 Malta embarked on an ambitious project to introduce the Aircraft Registration Act (the “ARA”) and to accede to the Cape Town Convention and its Aircraft Protocol. A few years later, the growing presence of AOC holders in Malta and the increase in aircraft registered in the National Aircraft Register is testament to the success story of the ARA.

This notwithstanding, there still is and will always be room for improvement, as shown by the recent Act to amend the ARA which became law in October 20161. The improvements affect four broad categories: