Jurisdiction

Conflict of Laws – LIA 3012

Main Questions

 Whether the Malaysian courts have the jurisdiction to hear

the case?
 If yes, should the courts hear the case? i.e. is this the best
court to hear the case?
How to Determine Jurisdiction?

 Via statute  Section 23 & 24 Courts of Judicature Act 1964

 Via Common Law principles.
Section 23 CJA 1964
Section 23. Civil jurisdiction - general.

(1) Subject to the limitations contained in Article 128 of the Constitution the High Court shall
have jurisdiction to try all civil proceedings where —

(a) the cause of action arose;

(b) the defendant or one of several defendants resides or has his place of business;

(c) the facts on which the proceedings are based exist or are alleged to have occurred; or

(d) any land the ownership of which is disputed is situated,

within the local jurisdiction of the Court and notwithstanding anything contained in this section
in any case where all parties consent in writing within the local jurisdiction of the other High
Court.
Definition of place of business
 In Malaysia, it should be a registered company under the Companies Act 2016.
 Some principles under Common Law:-
- as long as business is conducted regardless of registration
- South India Shipping Corporation Ltd v Export-Import Bank of Korea [1985] 2 All ER 219:
The defendant bank was incorporated in Korea. Although the defendant conducted its main business
from Korea, it rented offices in Fenchurch Street, London. The office in the City was neither the
registered nor the principle office of the defendant. From there it maintained relations with
banking and financial institutions in the UK and Europe. Banking transactions were not carried out
at this office. In concluding that the bank was carrying on a business in the jurisdiction, Akner LJ
agreed that the thrust of the authorities was not that a company should carry on the whole of its
business in this country to fall into the category of “carrying on a business”.
Definition of place of business
-Cleveland Museum of Art v Capricorn Art International SA and Anor [1990] 2 Lloyd’s Rep 166:
A private dwelling where a reliquary was stored was claimed to not be an art gallery of any
kind. Court held that Capricorn regularly used the house for storing and showing work to private
buyers and controlled access to the vault and so had established a place of business at the
house since these activities were integral to the business of the defendants. It was held to be
so, although other works of art not belonging to the company were also on the premises and no
outward sign of the company such as a nameplate, was displayed on the premises.
Section 24 CJA 1964
Section 24. Civil jurisdiction - specific.

Without prejudice to the generality of section 23 the civil jurisdiction of the High Court shall include —

(a) jurisdiction under any written law relating to divorce and matrimonial causes;

(b) the same jurisdiction and authority in relation to matters of admiralty as is had by the High Court of Justice in
England under the United Kingdom Supreme Court Act 1981;

(c) jurisdiction under any written law relating to bankruptcy or to companies;

(d) jurisdiction to appoint and control guardians of infants and generally over the person and property of infants;

(e) jurisdiction to appoint and control guardians and keepers of the person and estates of idiots, mentally disordered
persons and persons of unsound mind; and

(f) jurisdiction to grant probates of wills and testaments and letters of administration of the estates of deceased
persons leaving property within the territorial jurisdiction of the Court and to alter or revoke such grants.
Jurisdiction via Common Law Principles

1) When anyone enters Malaysia, he comes within the jurisdiction of either the High Court in Malaya
or the High Court in Sabah and Sarawak and can be brought before that court by means of the
appropriate writ of summons.

> This is the foundation of a civil action in personam.

> The writ can even be served on a friendly alien or anyone merely passing through Malaysia on
his way somewhere else.

> Even when the defendant is briefly present to see the races at Ascot (Maharanee of Baroda v
Wildenstein [1972] 2 QB 283 CA) or has an overnight stay at a London hotel (Colt Industries v
Sarlie [1966] 1 ALL ER 673) he can be made subject to the jurisdiction of the court.
Jurisdiction via Common Law Principles
> However where there is an element of fraud, there is an exception to personal jurisdiction
based on presence:-
- Lim Guan Teet v Tengku Akobe (1882) 1 Ky. 539 : The defendant came within the jurisdiction of
the Penang High Court at the invitation of the plaintiff and was then arrested for debt at the
instance of the plaintiff. It was held that the plaintiff could not ‘having induced the defendant
to come within the jurisdiction for one purpose..afterwards change his ground’ and arrest him.
In courts of law, clean hands are a necessity, even in an age marked by a dubious business
morality.

> The same exception to personal jurisdiction based on presence also applies where the
defendant is physically forced to enter the jurisdiction so he could be served – John Sanderson &
Co (NSW) Pty Ltd v Giddings [1976] VR 421.
Jurisdiction via Common Law Principles
2) Submission to the court : where the parties start the proceedings at the Malaysian court and
submit the case in court.
- Barclays Bank of Swaziland v Hahn [1989] 2 ALL ER 398 : Submission to the
court's jurisdiction starts from the acceptance of writ - so long as you have
the knowledge that the writ has been served upon you.

3) Where the defendant enters an appearance and defends the case on its merits, he will be
precluded from challenging the jurisdiction of the courts at a later stage. The defendant is
considered to have accepted the jurisdiction of the court – Marketmaker Technology Ltd v CMC
Group Plc [2008] EWHC 1556 (QB).

4) A defendant is taken to have submitted to the jurisdiction of a foreign court if he had appeared
there voluntarily to protest against the jurisdiction of the foreign court. – Henry v Geoprosco
International [1976] QB 726
Service of Notice of Writ Outside the
Jurisdiction
 Order 11,rule 1(1) Rules of Court 2012
 Has to fall within one of the situations under O. 11, r. 1(1)(A-M):
A - Land situated in Malaysia
B - Deed, will, contract regarding land
C - Person who is domiciled in Malaysia/living in Malaysia or carrying on business in Malaysia
D - Management of estate of a person who died domiciled in Malaysia
E - Person who holds the trust is not in Malaysia
F - Malaysian contract
G - Breach of contract happened in Malaysia
H - Tort happened in Malaysia
I - Injunction to refrain the defendant from doing something in Malaysia
J - A person out of the jurisdiction who is necessary for a proceeding in which an action has already begun by serving writ
properly against a person within the jurisdiction
K - Property matters
L - Matters relating to carriage by air
M - Enforce judgment or arbitral award
Service of Notice of Writ Outside the
Jurisdiction
 Also under Order 11, rule 1(1) : no notice of writ can be served if it is a claim for damage, loss of
life or personal injury arising out of a collision between ships.
 Principles to use Order 11- The Hagen [1908] P 189:
- The plaintiff must have a good, arguable case
- Court must be exceedingly cautious before allowing a writ to be served to a foreigner outside
Malaysia
- Plaintiff must make a full and fair disclosure of all relevant facts
- Any doubts/ ambiguities in the construction of the rule should be resolved in the defendant’s
favour
- In exercising its jurisdiction, the court must consider whether it, or a foreign court, is the
appropriate forum for the case
- Where the parties have agreed that any dispute is to be referred to the exclusive jurisdiction of
a foreign court, that will be a strong ground for refusing leave for the use of Order 11
Stay of Actions
 Paragraph 11 of the Schedule of the CJA 1964:

11. Res judicata

Power to dismiss or stay proceedings where the matter in question is res judicata between the
parties, or where by reason of multiplicity of proceedings in any court or courts the proceedings
ought not to be continued.
Stay of Actions
 Striking out pleadings and endorsements (O. 18, r. 19)

19. (1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the
endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that—

(a) it discloses no reasonable cause of action or defence, as the case may be;

(b) it is scandalous, frivolous or vexatious;

(c) it may prejudice, embarrass or delay the fair trial of the action; or

(d) it is otherwise an abuse of the process of the Court,

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be
Forum non conveniens
 Definition: where the defendant seeks to stay the Malaysian proceedings on the basis that trial in
Malaysia is not appropriate and that a foreign forum is clearly more suitable.

 The origins of this began in the case of St Pierre v South American Stores Ltd [1936] 1 KB 382:-
- A mere balance of convenience is not a sufficient ground for depriving a plaintiff of the
advantages of prosecuting his action in an English court.
- The court will only stay the proceeding if the defendant can prove 2 conditions:
a) The defendant must satisfy the court that the continuance of the proceeding will lead to
an injustice as it will be oppressive and vexatious towards him or it would be an abuse of
the process of the court in some other way.
b) this stay must not cause an injustice to the plaintiff.
- On both the burden is on the defendant.

 English courts were rather rigid and it was difficult to obtain stay of proceedings from the court.
Forum non conveniens
 The rigidity was modified by the English courts in The Atlantic Star [1974] AC 436. Stay was granted
in this case and the St Pierre test was regarded as valid but that ‘oppression’ and ‘vexation’ should
be interpreted liberally.

 Mac Shannon v Rockware Glass Ltd [1978] AC 795:

- The defendant had to satisfy the court that there was another forum in another country to which
justice could be done between the parties at substantially less inconvenience and expense.
- The defendant also has to prove that the stay must not deprive the plaintiff of any legitimate
personal or juridical advantage available to him in England.

 The Abidin Daver [1984] AC 398: Where the foreign court was the natural and appropriate forum,
the plaintiff had to prove by cogent evidence that there was some personal or juridical advantage
in the English action of such importance that it would be unjust to deprive him of it
Forum non conveniens
 Spiliada Maritime Corp v Cansulex Ltd, The Spiliada [1986] 3 ALL ER 843:
- The court, should exercise its discretion in favour of that forum in which the case could be tried
more suitably for the interests of the parties and the needs of justice, i.e. the "appropriate
forum“.
- The "appropriate forum" was that with which the case has its closest and most real
connection.
- Factors that are looked at are expense and convenience, e.g availability of witnesses, but also
matters like the law governing the transaction or the parties' places of residence or business.
- The fact that the plaintiff might be deprived of a legitimate advantage if stay is granted is
obviously relevant to this issue but by no means conclusive.
- The onus is on the defendant seeking the stay.
Forum non conveniens
 In Malaysia, the case of American Express Bank Ltd v Mohamed Toufic Al-Ozeir & Anor [1995] 1
MLJ 160 adopted the forum non conveniens test from The Spiliada. Subsequent cases also followed
this case and continued to apply this approach. There is thus a clear movement of the Malaysian
courts to follow the forum non conveniens doctrine.

 In Australia, in the case of Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 the
courts rejected the English developments of the doctrine of forum non conveniens and chose
instead to apply the traditional St Pierre test.
 Then, in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 the courts came up with their own
brand of deciding stay of action cases by looking at whether the forum ‘is clearly an inappropriate
forum for determination of the dispute’ and in that event the continuation of the case in the
forum will be regarded as oppressive or vexatious and the proceedings should be stayed.
Foreign Jurisdiction Clause
 Definition: Clauses that declare a transaction is to be governed by the law of a particular country.
Common in international commercial contracts.

 The Fehmarn [1958] 1 ALL ER 333: The parties’ choice of law was not ‘decisive’ for ‘no one by his
private stipulation can oust these courts of their jurisdiction in a matter that properly belongs to
them’. It was all a question of ‘with what country is the dispute most closely connected’.

 Applied in the Malaysian case of Elf Petroleum v Winelf [1986] 1 MLJ 177 where despite there being
an arbitration clause, the court held that it was not sufficient to oust the jurisdiction of the Malaysian
courts.
 The Eleftheria [1970] P 94:
- Where there is an application for a stay on the basis of such a clause, the court had a discretion
in the matter and this should be exercised in favour of granting a stay ‘unless strong cause for
not doing so’ was shown.
- It was for the plaintiff to prove such ‘strong cause’.
- In exercising its discretion, the court should take into account all the circumstances of the case,
including, if relevant:
a) in what country the evidence on the issues of fact was available, and the relative cost and
convenience of trials;
b) whether foreign law applied and, if so, to what extent it differs from English law in any
material respect;
c) with what country either party is connected, and how closely;
d) whether the defendant genuinely desires trial in a foreign country, or only seeks procedural
advantages there;
e) whether the plaintiff will be ‘prejudiced’ by having to sue in a foreign country, either by
losing security for his claim, being unable to enforce the judgment obtained there, being
faced with a time-bar not applicable locally, or being unlikely to get a fair trial.
Foreign Jursidiction Clause

 In the Malaysian case of Globus Shipping v Taiping Textiles [1976] 2 MLJ 154 the court referred to both
The Fehmarn and The Eleftheria and handed down a judgment that seemed to be more in favour of
The Fehmarn. It held that, even though parties had decided to refer disputes to a foreign court, the
Malaysian court, where the cause of action in relation to the contract arises and is properly within its
jurisdiction, has a discretion whether or not to adjudicate.

 Sabah Gas Industries v Trans Samudera Lines [1993] 2 MLJ 396  the court applied the principles in
The Eleftheria and allowed the defendant’s application to set aside the injunction to stay the
arbitration proceedings and set aside the plaintiff’s writ of summons.
Foreign Jurisdiction Clause

 American Express Bank Ltd v Mohamed Toufic Al-Ozeir & Anor [1995] 1 MLJ 160  foreign
jurisdiction clauses would in any event, in some significant way, militate against any argument for
the bank customers, i.e the plaintiffs, that the Malaysian court was the most appropriate forum.

 Inter Maritime Management v Kai Tai Timber [1995] 1 MLJ 322  made a comparison between forum
non conveniens cases and forum selection clause cases. Decided not to give effect to the forum
selection clause as there were stronger links on the facts of the case with Malaysia (applying The
Fehmarn and The Eleftheria).
Lis Alibi Pendens/Anti-suit Injunction
 Definition of lis alibi pendens: A lawsuit pending in another jurisdiction.

 Anti-suit injunction: Where the court may try to stay the action going on in another country because
Malaysia is the best forum to hear the case. The court does this by placing an injunction on the
plaintiff forcing him to stop his actions abroad.
 Societe Nationale Industrielle Aerospatiale v Lee Kui Jak & Anor [1987] 2 MLJ 397 PC:-
- the natural forum for the trial will be selected; whether legal relief could be obtained at the
forum and whether the selection of the forum would be oppressive to the party
- The basic principles of the law relating to injunctions restraining a party from commencing or
pursuing legal proceedings in a foreign jurisdiction:
a) the jurisdiction to stay was to be exercised when the ‘ends of justice’ required it;
b) since such an order indirectly affected the foreign court, the jurisdiction was one which
had to be exercised with caution
c) an injunction will only be issued restraining a party who was amenable to the jurisdiction of
the court
Lis Alibi Pendens/Anti-suit Injunction

 BSNC Leasing v Sabah Shipyard [2000] 1 AMR 1141:

> whether the institution of proceedings in a foreign court would be vexatious or oppressive would
depend on the peculiar facts of the case. When deciding this question, a court must have regard
to all the circumstances of the case including such matters as comity, the interest of the parties,
the connection that the dispute has with the alternative forum and the need to exercise caution
when restraining foreign proceedings.
>the proceedings in the Ecuadorian court was vexatious and oppressive and due to the strong links
with Malaysia, Malaysia is the natural forum for the resolution of the dispute. Anti-suit injunction
was therefore allowed (even mandatory injunction was given to stop the arrest of the barge and
to stop all proceedings before the Ecuadorian court).