Arbitration

Malaysian Construction and Contract Law invites you to read the following articles in respect of Arbitration in Malaysia

Arbitration in Malaysia – Privacy & Confidentiality

Many consider that the main advantage of arbitration over litigation after perhaps the possible cost savings and the ability to have appointed arbitrators which possess a greater knowledge in the field of construction to be that arbitration proceedings offer privacy and are confidential in their process. Privacy means that the proceedings are not open to [...]

Enforcement of Foreign Arbitral Awards

The Arbitration Act 2005 has repealed the Arbitration Act 1952 together with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 1985. However it as demonstrated in the following there were still challenges facing a party seeking to enforce a foreign arbitral award under the Foreign Arbitral Awards Convention Act in Malaysia [...]

Procedures & Laws Governing Arbitration in Malaysia

At the moment there are, two Arbitration Acts being used in Malaysia, being the Arbitration Act 1952 which is based on the English Arbitration Act of 1889 together with the 2005 Arbitration Act which is largely based on the Model Law and the New Zealand Arbitration Act of 1969. The 1952 Act applies to arbitrations [...]

What Constitutes a Dispute or Difference under the Contract?

What Constitutes a Dispute or Difference under the Contract?

Commonly standard forms of contract state that if there is a dispute or difference which arises under or out of the contract that either party may seek to have such dispute or difference may be resolved eventually by Arbitration in accordance with the dispute resolution clause as contained within the standard form.

It is of the greatest importance that an identifiable dispute has arisen before it can be referred to arbitration or otherwise the arbitrator will not have the jurisdiction to deal with it. It might be thought that the existence or otherwise of a dispute would be fairly obvious, but questions……. more

Dangers Associated Supplementary Agreements to Construction Contracts

Dangers Associated Supplementary Agreements to Construction Contracts

In the event that during the progress of the Works, the Employer decides that additional work is required which is so substantial or of such a nature that he considers that it is not appropriate to simply issue an Architect’s instruction he may wish to address this with a supplementary agreement.

It maybe that the Contractor too is willing to agree to this proposal as the terms and conditions appear favourable having no need to tender the additional or varied works. Both parties however should be beware of the potential pitfalls…… more

Amendment to the Rules of the High Court, Court of Appeal & Federal Court, effective 1st March 2011

On 29^th June 2011 the Rules of the High Court (Amendment) 2011, the Rules of the Court of Appeal (Amendment) 2011 and the Rules of the Federal Court (Amendment) 2011 were gazetted. Of particular i\relevance is that the rate of interest in the principle rules is now amended from the rate of 8% as it had been to a rate of 4% from 1^st March 2011. This reflects more accurately the current market conditions and cost of lending but will reduce substantially future awards where such include interest. We summarise below the relevant changes to the rules below:

Rules of the High Court (Amendment) 2011 [PU(A) 210/2011]

There are 3 amendments to the Rules of the High Court:

(1) Rate of Interest – wherever the rate of interest in the principal rules is stated to be 8%, it has been amended to 4%.

(2) Witness Statements – Order 35A has been amended to stipulate that evidence in chief shall be given by way of witness statements in the form of question and answer and it is to be furnished to the other side/s not later than 7 days prior to it being tendered and read at the hearing.

(3) Electronic Filing – Order 92 has been amended to allow for electronic filing and the use of an electronic seal. This particular amendment is deemed to be operational retrospectively from 1 March 2011.

Rules of the Court of Appeal (Amendment) 2011 [PU(A) 209/2011] wef 1 March 2011

The amendments to the Rules of the Court of Appeal (all of which are deemed to be operational retrospectively from 1 March 2011):

(1) Notes of Evidence – to permit the inclusion in the Record of Appeal of the notes of evidence recorded in mechanical means i.e. the CRT.

(2) Electronic Filing – Rule 78 has been amended to allow for the use of an electronic seal. A new Rule 80A to allow for electronic filing.

Rules of the Federal Court (Amendment) 2011 [PU(A) 208/2011] wef 1 March 2011

The amendment to the Rules of the Federal Court (all of which are deemed to be operational retrospectively from 1 March 2011):

(1) Electronic Filing – Rule 111 has been amended to allow for the use of an electronic seal. A new Rule 113A to allow for electronic filing.

See full article and attachments

Damansara Realty Berhad v Bungsar Hill Holdings Sdn Bhd appeal dismissed by Federal Court

The Federal Court has dismissed an appeal lodged against the earlier findings of the Court of Appeal in respect of the Damansara Realty Berhad and Bungsar Hill Holding Sdn Bhd dispute in respect of the development rights over a 15.5 acre plot of land. Damansara Realty had sought leave on the following questions: (1) Where interlocking agreements are contemporaneously executed, can the termination clause in one of them be invoked without regard to performance under the other agreements, where each was executed on the faith of the others being executed, and was a consideration for the same? The Court determined that the agreements were not interlocking and that the Property Development Agreement could be treated as a standalone document and that accordingly there was nothing preventing the termination clause in the agreement from being exercised. (2) Whether by reason of the limitation under Section 56(2) of the Contracts Act 1950, a contracting party could terminate a contract during the life of the contract for alleged delay where time is not made of the essence? The court determined that time was of the essence in the Property Development Agreement as development should have been commenced and completed in the fifteen year period and although no stages were provided for in the agreement the fact development failed to commence and were unable to be completed there was an entitlement to terminate. (3) Whether by reason of Section 47 of the Contracts Act, the common law rule that performance under a contract must be undertaken within a reasonable time is ousted where the parties have themselves specified time for performance? The court determined that the delay of 13.5 years in the commencement of any development entitled the termination of the property development agreement. (4) Whether a notice to terminate a contract issued by one party to a contract pursuant to a clause that entitles the other party to the contract an opportunity to rectify the breaches complained of is valid in law when no such opportunity is afforded to the other party? The court determined there was no obligation of Bungsar Hill Holdings Sdn Bhd to state in their termination notice a 30 day period for rectification of any material breach and that the notice gave a 30 day notice period and that the termination notice was valid in law. (5) Whether on a true construction of Section 47 and 56 of the Contracts Act 1950, the Court may imply a term making time for performance of the contract of the essence where the contract does not expressly make time of the essence and the duration for the contract is expressly stipulated? The court determined that this question had been answered in the courts response to questions two and three. (6) Whether reliance on an implied term as to time of performance should be specifically pleaded where it is raised as a defence to a claim for specific performance? The court determined that whether the view was taken that Damansara Realty Berhad unreasonably delayed development or refused to commence the development, being either repudiation or a fundamental breach the contract was indeed breached. A full text of the Judgment may be viewed in our Malaysian Case Law Section.

Amendments to Housing Development Act being Considered

It is understood that the Housing and Local Government Ministry propose to table a motion to amend the Housing Development Act at the lower house of parliament later this year in an attempt to reduce the number of abandoned housing development projects.

It is understood that the amendments being proposed include requirements for developers to deposit with the authorities an amount equal to three per cent of the cost of the housing project to be developed, with this sum being retained by the authorities until successful completion of the project by the developer.

Currently Developers are required to put a deposit a sum of RM200, 000 and have a piece of land before a license is issued. It is understood that the proposed new amendment, will allow the authorities to use the deposit in the case of a project failing to attempt to correct the problems and avoid abandoned. It is also believed that the proposed amendment would require that developers complete properties before being allowed to sell them and that failure of developers to abide by the new regulations would leave the developers and their directors open to prosecution under the penal code.

MCCL has updated its Malaysian Laws and Acts Resources Section

MCCL Malaysian Law Section has been updated and now includes over seventy Malaysian Laws and Act which are considered relevant to the subject of Construction and Contract Law. MCCL will expand the resource and keep all visitors and those registered to receive updates via email when additional resources are added to the collection. to view the current selection of Laws and Act please view the contents at Malaysian Acts and Laws alternatively access them via the site menu.

Book Reviews added to Malaysian Construction and Contract Law

We have added a Book Review section to the Malaysian and Construction Law Site which will allow visitors not only the opportunity to read a general review of a featured book but also to submit queries and questions in relation to the specific content of the books and the books relevance to particular subject area. So whether you are a student or industry professional you can enquire as to the content of particular books featured on Malaysian Construction and Contract Law and we will attempt to answer your questions before you make any decision to buy a particular book.

The books currently featured are shown here:

 

As more books are feature we shall keep you updated

Court of Appeal Rules That Retention Moneys Are Held In Trust

On the 12th July 2011 the Malaysian Court of Appeal upheld an earlier ruling of the High Court that retention moneys under a construction contract were indeed moneys held in trust and that the following the Employer entering into voluntary winding up, its creditors were not to benefit from the sums so retained which remained payable to the Contractor. Although the Employer appointed a liquidator prior to the expiration of the defects liability period the court held that the retention monies did not form part of the assets of the Employer as they are held in trust.   For a more detailed information please refer to the Case Law section of this site

Welcome To Malaysian Construction and Contract Law

Malaysian Construction and Contract Law has been launched to provide a free resource to those involved with the construction industry and its many related industries in the field of construction disputes and contract law specifically that relating to Malaysia but also case-law which has been the result of rulings outside of Malaysia which have formed the basis of decisions in Malaysia.

In addition to a resource Malaysian Construction and Contract Law aims to provide a forum where individuals can follow and discuss news together with current events relevant to Construction Disputes and keep abreast of developments within this particular field of the Construction Industry within Malaysia.

It is hoped that the site will grow to be a helpful reference in respect of Construction and related Disputes, Case Law and Legal Reference for those interested in the subject of Malaysian Construction and Contract Law.