Yew Huoi, How & Associates | Leading Malaysia Law Firm

COMPANIES AND CORPORATION – DIRECTORS – REMOVAL

X and Y were the only two directors in B Sdn Bhd. X was also employed as a paid staff of B Sdn Bhd. However, unhappy with working with Y, X submitted his resignation letter to resign from “all current holding position”.

3 years later, X complained that he was wrongfully removed as director of B Sdn Bhd and was replaced with a 3rd party.

Q. Can X say that he only resigned as staff but not director?

A. No. Because the wording “all current holding position” in his resignation letter includes directorship and the position as staff. X has to make it clear in his letter of resignation that he is resigning as staff and not director of B Sdn Bhd.

Q. Can X complain that he was wrongfully removed as director after 3 years?

A. No. Since there was a lapse of 3 years, it was deemed unreasonable. Generally, a reasonable person who was wrongfully removed as a director of a company would write to the company promptly to enquire about the reason of him being removed from his position. To lodge a complaint 3 years later appears to be unreasonable. As such, the court will likely presume X’s resignation was voluntary.

Q. Can Y appoint another director to fill the vacancy as a result of X’s resignation?

A. It depends on the Article of Association (“AOA”) of the Company (if the company is set up before 31 January 2017). By default, the Fourth Schedule of the old Companies Act of 1965 (“CA 1965“) provides that the remaining director can appoint any person to be director to fill a casual vacancy when a director resigns (Article 68). If the AOA of B Sdn Bhd is based on the Fourth Schedule, then Y (who is the only remaining director) can appoint another director to fill the vacancy from X’s resignation.

For company that establishes after Companies Act 2016 (“CA 2016”) came into force, Section 208(4) of the CA 2016 also allows the Board to appoint a new director.

Q. Can X insist that his consent is required to appoint new director?

A. No. Because X has tendered his resignation. This is notwithstanding there is a minimum of 2 directors requirement under the old CA 1965.

Sorotan Terkini

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
ms_MYMY
× Hubungi Kami