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SUMMARY JUDGMENT – NO ESCAPE FOR GUARANTORS – COURT GRANTS SUMMARY JUDGMENT TO OCBC IN LOAN DEFAULT DISPUTE

In OCBC Bank (Malaysia) Bhd v Agroglobal Sdn Bhd [2025] 1 Lloyd’s Rep 558, the Singapore High Court granted summary judgment against the borrower and its guarantors, dismissing bare allegations of misrepresentation and non-disbursement. The decision reaffirmed that signed facility and guarantee documents are binding, and generic denials- absent credible evidence – will not prevent judgment. The case highlights the judiciary’s strict stance on enforcing loan agreements and signals that guarantors cannot plead ignorance of clear contractual obligations.

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Updates

LIMITATION OF ACTION – TIME WAITS FOR NO CLAIM – COURT OF APPEAL STRIKES OUT PKA’S LATE ACTION

In the notable decision of Kuala Dimensi Sdn Bhd v Port Kelang Authority [2025] 2 MLJ 238, the Court of Appeal firmly emphasized the critical importance of timely action in contractual disputes, ruling that PKA’s claims against KDSB were statute-barred under the Limitation Act 1953. The Court decisively clarified that parties cannot invoke the postponement of limitation periods without demonstrating genuine inability to discover breaches earlier through reasonable diligence. This judgment serves as a stern reminder to litigants to vigilantly monitor their contractual rights and act promptly to avoid losing claims due to statutory time limitations.

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Commercial Law

REGULATIONS – GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT 1947 )

On 3.4.2025, the United States imposed a 24% tariff on Malaysian exports, triggering concerns over its legality under international trade law. The measure appears to breach core WTO obligations, including Most-Favoured Nation treatment and tariff bindings. Malaysia has strong grounds to challenge the tariff through WTO dispute settlement, though enforcement could be delayed due to the Appellate Body impasse. In the meantime, Malaysia is pursuing diplomatic avenues, highlighting the importance of rules-based trade amid rising global protectionism.

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Recent Legal Updates

ROAD TRANSPORT ACT – INSURANCE – DECLARATION TO NOT INDEMNIFY THE INSURANCE

In Mohd Riza bin Mat Rani & Ors v Zurich General Takaful Malaysia Bhd [2025] 2 MLJ 224, the Court of Appeal allowed the appeal by the claimants and set aside the High Court’s decision which had favoured the insurer. The Court held that Zurich was not entitled to repudiate liability under the motor takaful policy, as the alleged non-disclosures were not proven to be material or made dishonestly. Emphasising the principles of fairness and protection inherent in takaful, the Court ruled that technical omissions should not be used to defeat the rights of accident victims and their families.

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CONSTITUTIONAL LAW – A PEACEFUL WIN: COURT STRIKES DOWN CRIMINAL PENALTY FOR NO NOTICE UNDER PAA

In Amir Hariri bin Abd Hadi v Public Prosecutor [2025] 4 MLJ 807, the Court of Appeal struck down Section 9(5) of the Peaceful Assembly Act 2012 as unconstitutional. The provision, which criminalised organisers for failing to give 10 days’ prior notice of an assembly, was held to be a disproportionate restriction on the constitutional right to peaceful assembly under Article 10(1)(b). The Court emphasised that while notice requirements under Section 9(1) remain valid for regulatory purposes, criminal penalties for non-compliance imposed an unjustifiable burden on fundamental liberties. This landmark ruling strengthens constitutional protections for public assemblies in Malaysia.

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MARITIME LAW – LIEN, LOSS AND LMAA: ENGLISH COMMERCIAL COURT ORDERS SALE OF DETERIORATING CARGO

In Lord Marine Co Ltd v Vimeksim Trans SA & Anor [2025] 2 Lloyd’s Rep 52, the English Commercial Court exercised its powers under s.44 Arbitration Act 1996 to order the sale of a deteriorating cargo of Ukrainian corn over which the shipowners had exercised a lien for unpaid freight. Mr Justice Bryan held that the cargo was the “subject of the proceedings” and that the court could intervene to preserve its value pending LMAA arbitration. The decision clarifies that a “freight prepaid” stamp does not estop owners where freight has not actually been paid and the bills of lading never left owners’ possession, and that possession can be maintained even when the cargo is stored in a receivers’ warehouse. This case reinforces the court’s readiness to act swiftly to prevent the loss of value in perishable cargo while safeguarding parties through fortified undertakings in damages.

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SUMMARY JUDGMENT – NO ESCAPE FOR GUARANTORS – COURT GRANTS SUMMARY JUDGMENT TO OCBC IN LOAN DEFAULT DISPUTE

In OCBC Bank (Malaysia) Bhd v Agroglobal Sdn Bhd [2025] 1 Lloyd’s Rep 558, the Singapore High Court granted summary judgment against the borrower and its guarantors, dismissing bare allegations of misrepresentation and non-disbursement. The decision reaffirmed that signed facility and guarantee documents are binding, and generic denials- absent credible evidence – will not prevent judgment. The case highlights the judiciary’s strict stance on enforcing loan agreements and signals that guarantors cannot plead ignorance of clear contractual obligations.

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MARITIME LAW – PORT CHARGES – BERTH AND BILL – COURT ANCHORS LIABILITY FOR PORT DUES ON IDLE VESSEL

In Marina Developments Ltd v Owner(S) Of “Sy Explorer” [2025] 1 Lloyd’s Rep 428, the court upheld the Port Authority’s statutory right to recover outstanding berthing charges, despite claims of abandonment by the vessel’s owners. The judgment reinforces that unless formal legal abandonment procedures are undertaken, port dues will continue to accrue. This decision affirms that even stationary vessels carry financial obligations, and port authorities can enforce recovery under maritime law protocols.

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MARITIME LAW – BILLS OF LADING – NO BILL, NO CARGO – SHIPOWNERS HELD LIABLE FOR MISDELIVERY WITHOUT ORIGINAL BL

In the pivotal case of The Doric Valour [2025] 1 Lloyd’s Rep 401, the Court of Appeal affirmed the stringent maritime principle that cargo cannot lawfully be released without the surrender of original bills of lading. Rejecting shipowners’ reliance on indemnities to justify cargo delivery without original documents, the Court emphasized the sanctity of the bill of lading as the cornerstone of secure international trade. This decision serves as a robust reminder for maritime operators that compliance with established shipping documentation procedures is mandatory to avoid serious liabilities.

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