Malaysia litigation guide
Elaine Yap and Donovan Cheah
Wong & Partners
Tel: +60 3 2298 7888 Fax: +60 3 2282 2669 Website: www.bakernet.com
The litigation process in Malaysia follows an adversarial system. All Malaysian advocates and solicitors have exclusive rights of audience in the Malaysian courts, except the small claims tribunal and the Syariah courts. For rights of audience before the Syariah courts, advocates and solicitors must obtain a separate qualification. Foreign lawyers are generally not granted rights of audience, unless they are issued with a special certificate for admission by the Attorney General.
Court system
As of early 2009, steps have been taken to improve the efficiency of the court system in Malaysia with the implementation of a new ‘fast track’ system for case management. The fast track system has been implemented in Kuala Lumpur and Shah Alam, with courts in other jurisdictions being expected to follow suit in due course.
In September 2009, a new Commercial Court was launched in the Kuala Lumpur High Court, equipped with a computerised system that allows for, among others, electronic filing, video recording of trials, and easier monitoring of cases. It is reported that this new ‘e-court’ system will gradually be implemented to approximately 166 courts in Malaysia.
Interim remedies
There are various interim remedies available to parties in civil proceedings, such as interlocutory injunctive relief, Mareva injunctions (also known as ‘freezing orders’) and Anton Piller orders. The court may also make various orders in the appropriate circumstances such as:
(a) an order that a plaintiff provide security for costs;
(b) an order to restrain a party from pursuing foreign proceedings;
(c) an order for the detention, custody or preservation of any property which is the subject matter of an action;
(d) an order for the sale of perishable property; and
(e) an order for the return of property subject to a lien
Enforcement of judgments
A judgment or order takes effect from the time it is pronounced but can only be enforced upon extraction of a sealed copy of the judgment or order from court. Some of the principal methods of enforcement of judgment debts, or the carrying out of orders of the court, include the issuance of a writ of seizure and sale, garnishee proceedings, insolvency proceedings, charging order on shares or securities, and committal proceedings.
Foreign judgments
Certain foreign judgments are enforceable in Malaysia, by virtue of the Reciprocal Enforcement of Judgments Act 1958 (REJA). However, before a foreign judgment can be enforceable, it has to be registered. The registration of foreign judgments is only possible if the judgment is for a monetary sum and was given by a Superior Court from a country listed in the First Schedule of the REJA. Those countries include, for example, the UK, Singapore, New Zealand and India.
If the judgment is not from a country listed in the First Schedule to the REJA, the only method of enforcement at common law is by securing a Malaysian judgment. This involves suing on the judgment in the local courts as an action in debt.
Arbitration
Malaysia’s arbitral legislation has seen an overhaul with the passing of the Arbitration Act 2005. The Arbitration Act 2005 is based on, but is not identical to the United Nations Commission on International Trade Law Arbitration (UNCITRAL) Model Law, and was initiated to bring Malaysia in line with modern international practice.
The Arbitration Act 2005 commenced as from March 15 2006, and the Arbitration Act 1952 continues to apply to all arbitrations commenced before that date. The Arbitration Act 2005 is applicable across the board to all international and domestic arbitrations regardless of the rules of arbitral regime selected.
Awards made by an arbitral tribunal, pursuant to an agreement, are final and binding on the parties. The Arbitration Act 2005 provides that the mode of enforcement of awards is by application in writing to the High Court, and is recognised as binding and enforceable by entry as a judgment. However, the High Court has the discretion to refuse the recognition or enforcement of awards in certain stipulated circumstances.
ADR
Malaysian parties remain relatively unaware of, and do not commonly avail themselves to, alternative dispute resolution (ADR) methods. This is due principally to their lack of knowledge, experience and understanding of the mediation process. It is likely however that mediation and conciliation will also gain momentum as disputing parties become more sophisticated and cognisant of ADR methods.
The Malaysian Mediation Centre (MMC), based in Kuala Lumpur, was established by the Malaysian Bar Council with the objective of promoting mediation as a means of ADR. The MMC only accepts commercial matters but intends to expand its scope of services to cover civil matters at a later stage.