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土地法

FEDERAL COURT CLARIFIES ‘COMMUNICATION’ UNDER NLC: INFORMAL NOTICE NOT ENOUGH TO TRIGGER TIME LIMIT

In Lee Kean Choon v Khoo San & Ors [2026] 1 MLJ 936, the Federal Court held that the phrase “communicated to him” under section 418 of the National Land Code requires formal written notification by the Land Office, not mere informal awareness. The Court ruled that time for appeal only begins upon proper service of the decision, and not when the appellant is casually informed. As the appellant was never duly notified of the partition application or approval, the entire process was vitiated for breach of statutory procedure and natural justice. The decision reinforces that strict compliance with notice requirements is fundamental in land administration matters.

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土地法

PROPERTY LAW – CHARGED BUT NOT IN CHARGE: COURT PROTECTS HOMEBUYERS OVER LENDERS IN LANDMARK RULING

In Champion Score Sdn Bhd v Mohd Sobri Chew bin Abdullah [2025] 3 MLJ 732, the Court of Appeal robustly affirmed that developers, having received full payment, become bare trustees without power to encumber properties. The Court decisively canceled an improperly created charge, emphasizing that financial institutions must diligently scrutinize developers’ authority under powers of attorney. This landmark decision highlight judicial commitment to protecting homebuyers, reinforcing statutory and public policy safeguards against developer misconduct.

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土地法

LAND LAWS – FEDERAL COURT SHIELDS BANKS – NO EXTRA HOMEWORK REQUIRED IN LAND LOANS!

In a landmark ruling, the Federal Court in Malayan Banking Bhd v Mohd Affandi bin Ahmad & Anor [2024] 6 MLJ 220 has reaffirmed that banks are not obligated to investigate past transactions beyond the land register before granting a loan. The case, which involved a dispute over land ownership and mortgage validity, clarified that under the Torrens System, a bank conducting a proper land search can rely on the registered title unless fraud is proven. This decision strengthens protection for lenders, ensuring that financing transactions remain efficient and commercially practical without the burden of additional due diligence on prior dealings.

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土地法

LAND LAW – PROPERTY SOLD TWICE: OWNERSHIP NOT TRANSFERRED IN FIRST SALE

This legal update examines the Court of Appeal’s decision in Malayan Banking Bhd v Mohd Affandi bin Ahmad & Anor [2024] 1 MLJ 1, which reaffirmed the binding nature of valid Sale and Purchase Agreements (SPAs) and the establishment of constructive trust. The court dismissed claims of deferred indefeasibility by subsequent purchasers and a chargee bank, emphasizing the critical importance of due diligence in property transactions. The decision serves as a cautionary tale for financial institutions and vendors, reinforcing the need for meticulous compliance with legal and equitable obligations.

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Recent Legal Updates

ADMIRALTY IN REM – WRONGFUL ARREST – POSSESORY RIGHT – ARREST GONE WRONG: WHEN A SHIP ARREST BACKFIRES WITH DAMAGES

In Eletson Holdings Inc & Ors v The Vessel “Paros” [2026] 8 MLJ 80, the High Court set aside an arrest after finding that the plaintiffs had no proprietary or possessory right to the vessel at the time of the writ, as the bareboat charter had already been terminated. The Court held that the claim was in substance a corporate control dispute dressed up as an admiralty action, and emphasised that such disputes do not fall within admiralty jurisdiction. Critically, the plaintiffs’ failure to disclose the termination of the charter when obtaining the arrest warrant amounted to a serious breach, leading the Court to find mala fides or gross negligence and order damages for wrongful arrest. The decision reinforces that ship arrest is a powerful remedy that must be exercised with full disclosure and a proper maritime foundation.

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GUARANTEE – PERSONAL GUARANTEE ≠ PAY ON DEMAND: COURT DRAWS THE LINE BETWEEN SURETYSHIP AND DEMAND GUARANTEES

In CE Energy DMCC v Bashar [2026] Lloyds’s Rep 267, the Commercial Court clarified that not all guarantees labelled “on demand” will be treated as demand guarantees. On a proper construction, the court held that the personal guarantee in question was a contract of suretyship, requiring proof of the principal debtor’s liability rather than automatic payment upon demand. Crucially, the court found that the debtor’s “irrevocable” admissions of debt in a payment agreement created a binding contractual estoppel, which the guarantor could not challenge. The decision also confirms that, where payment is due on a “day certain”, a seller may still claim the price notwithstanding retention of title. The case underscores the importance of precise drafting and the risks of entering into settlement agreements that conclusively fix liability.

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MARITIME NEGLIGENCE – PLAINTIFF CLAIMED FOR DAMAGES CAUSED DURING ANCHOR DEPLOYMENT OPERATION – CALDERBANK OFFERS

In Tom Eastwind 365 Sdn Bhd v The Owners of the Vessel “Icon Sophia” [2025] 9 MLJ 397, the High Court held that the doctrine of res ipsa loquitur applied in a maritime collision during an anchor deployment operation, allowing an inference of negligence against the tug owner. The Court clarified that the doctrine is not defeated merely because the defendant adduces evidence explaining the accident – such evidence goes to rebutting the inference, not preventing it. While liability was established due to the tug master’s error of judgment in manoeuvring too close to a stationary barge, the plaintiff failed to properly prove its damages and was awarded only RM50,000. Notably, despite succeeding on liability, the plaintiff was ordered to pay costs after rejecting reasonable Calderbank offers, underscoring the risks of pursuing litigation without properly substantiated claims.

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JURISDICTION – BILLS OF LADING – BREACH OF HIMALAYA CLAUSE – BREACH OF EXCLUSIVE JURISDICTION CLAUSE – ONEROUS OR UNUSUAL TERMS

In Maersk Guinéa-Bissau SARL v Almar-Hum Bubacar Baldé SARL [2026] 1 Lloyd’s Rep 215, the English Commercial Court held that a shipper was liable for breach of an exclusive jurisdiction clause and a Himalaya clause after commencing proceedings in Guinea-Bissau instead of England. The Court confirmed that such clauses are standard and enforceable, and that commencing foreign proceedings in breach of them can give rise to a claim for damages. Notably, the Court also recognised that Himalaya clauses may be used offensively, allowing subcontractors to recover losses caused by wrongful litigation. The foreign judgment was not recognised due to lack of jurisdiction and denial of natural justice.

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DELIVERY WITHOUT PRESENTATION OF BILL OF LADING – LOI WON’T SAVE YOU: SHIPOWNER LIABLE FOR MISDELIVERY DESPITE INDEMNITY

In United Overseas Bank Ltd v The “Maersk Katalin” [2026] 1 Lloyd’s Rep 18, the Singapore High Court reaffirmed that delivery of cargo without presentation of original bills of lading remains a fundamental breach, even where carried out against letters of indemnity. The Court held that LOIs merely shift commercial risk but do not authorise misdelivery, and rejected arguments of consent, ratification and causation. Significantly, the Court emphasised that the burden lies on the carrier to prove that the loss would have occurred in any event – a burden not easily discharged. The decision underscores the continued strict liability regime in misdelivery cases, particularly where banks as bill holders are involved.

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CONTRACT LAW – ‘UK COURTS’ MEANS ENGLAND: COURT UPHOLDS JURISDICTION DESPITE VAGUE CLAUSE

In SMT Global Logistics Ltd v Georgian Airlines LLC [2025] Lloyd’s Rep. Plus 89, the Commercial Court held that a clause referring disputes to “the court in accordance with current legislation of the United Kingdom” was a valid jurisdiction clause in favour of the High Court of England and Wales. The Court also confirmed that the Montreal Convention does not apply to pure contractual claims for non-performance, such as repayment and loss of profits. Emphasising a broad and commercially sensible interpretation, the Court enforced the parties’ choice of forum and refused to stay proceedings, reaffirming that jurisdiction clauses will be upheld unless there are overwhelming reasons to depart.

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