Application for recognition of foreign proceedings
(1) A foreign representative may apply to the Court for recognition of foreign proceedings in which the foreign representative has been appointed.
(2) An application for recognition of foreign proceedings shall be accompanied by—
(a) a certified copy of the decision commencing the foreign proceedings and appointing the foreign representative;
(b) a certificate from the foreign court affirming the existence of the foreign proceedings and the appointment of the foreign representative; or
(c) in the absence of evidence referred to in paragraphs (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceedings and of the appointment of the foreign representative.
(3) An application for recognition of foreign proceedings shall also be accompanied by a statement identifying all foreign proceedings and proceedings under Malaysian insolvency law in respect of the debtor that are known to the foreign representative.
(4) The foreign representative shall provide the Court with a translation into English language text of a document submitted other than in the English language in support of the application for recognition of foreign proceedings and the translation shall be accompanied by a certificate from the person who translated the document setting out that the translation is accurate and true.
Presumptions of recognition
(1) If the decision or certificate referred to in subsection 15(2) indicates that the proceedings in respect of which an application for recognition of foreign proceedings is made are foreign proceedings within the meaning of subsection 2(1) and that the person or body making the application is a foreign representative within the meaning of subsection 2(1), the Court is entitled to so presume.
(2) The Court may presume that the document submitted in support of the application for recognition of foreign proceedings is authentic, whether or not the document has been legalized.
(3) In the absence of proof to the contrary, the debtor’s place of registered office is presumed to be the debtor’s centre of main interests.
Decision to recognize foreign proceedings
(1) An application for recognition of foreign proceedings shall be determined by the Court at the earliest possible time.
(2) Subject to section 7, the Court shall recognize foreign proceedings by making a recognition order if—
(a) the proceedings are foreign proceedings within the meaning of subsection 2(1);
(b) the person or body applying for recognition is a foreign representative within the meaning of subsection 2(1);
(c) the application complies with the requirements of subsections 15(2) and (3); and
(d) the application has been submitted to the Court referred to in section 5.
(3) The foreign proceedings shall be recognized as—
(a) foreign main proceedings, if the foreign proceedings are taking place in a foreign State where a debtor has its centre of main interests; or
(b) foreign non-main proceedings, if the debtor has an establishment within the meaning of subsection 2(1) in the foreign State.
(4) Nothing in this section, section 15, 16 or 18 shall prevent the modification or termination of a recognition order, if it is shown that the grounds for granting the recognition order were wholly or partly lacking at the time the recognition was granted or have wholly or partly ceased to exist.
(5) The Court may, on the application of a foreign representative, a person affected by the recognition, or on its own motion, modify or terminate a recognition order, either wholly or for a limited period, on such conditions as the Court thinks fit.
Subsequent information
From the time an application for recognition of foreign proceedings is filed and continuing thereafter, the foreign representative shall promptly notify the Court—
(a) of any substantial change in the status of the recognized foreign proceedings or the status of the foreign representative’s appointment; and
(b) of any other foreign proceedings or proceedings under Malaysian insolvency law regarding the same debtor that comes to the knowledge of the foreign representative.
Relief that may be granted upon filing of application for recognition of foreign proceedings
(1) From the time an application for recognition of foreign proceedings is filed until the application is determined, the Court may, on the application of the foreign representative, where relief is urgently needed to protect the property of the debtor or the interests of the creditors, grant any such relief of a provisional nature as the Court thinks fit, including—
(a) staying any execution against the property of the debtor;
(b) entrusting the administration or realization of whole or any part of the property of the debtor located in Malaysia to the foreign representative or to a Malaysian insolvency office-holder, for the purpose of protecting and preserving the value of the property which, by its nature or due to other circumstances, is perishable, susceptible to devaluation or is otherwise in jeopardy; and
(c) granting any relief referred to in paragraph 21(1)(c), (d) or (g).
(2) Any relief granted under subsection (1) by the Court shall be consistent with any order that has been made or may be made under this Act, the Companies Act 2016, the Labuan Companies Act 1990 or any other written laws.
(3) Unless extended under paragraph 21(1)(f), the relief granted under subsection (1) shall terminate upon the determination of the application for recognition of foreign proceedings.
(4) The Court may refuse to grant any relief under this section if such relief would interfere with the administration of foreign main proceedings.
Effects of recognition of foreign main proceedings
(1) Subject to subsection (2), upon recognition of foreign proceedings as foreign main proceedings—
(a) the commencement or continuation of any individual action or proceedings in relation to the property, rights, obligations or liabilities of the debtor shall be stayed;
(b) any execution against the property of the debtor shall be stayed; and
(c) any right to transfer, encumber or otherwise dispose of any property of the debtor shall be suspended.
(2) The stay and suspension referred to in subsection (1) shall—
(a) be of the same scope and have the same effect as if the debtor had been made the subject of a winding up order under the Companies Act 2016 or the Labuan Companies Act 1990; and
(b) be subject to the same powers of the Court and the same prohibitions, limitations, exceptions and conditions as would apply under the laws of Malaysia in such a case,
and the provision of subsection (1) shall be interpreted accordingly.
(3) Without prejudice to subsection (2), the stay and suspension referred to in subsection (1) shall not affect the rights—
(a) of any person to take any steps to enforce any security over the property of the debtor;
(b) of any person to take any steps to repossess goods in the possession of the debtor under a hire-purchase agreement as defined in section 2 of the Hire-Purchase Act 1967 [Act 212];
(c) of any person exercisable under, by virtue of, or in connection with any provision of the written laws as specified in Part II of the Schedule; or
(d) of a creditor to set off his claim against a claim of the debtor,
being the rights which would have been exercisable if the debtor had been made the subject of a winding up order under the Companies Act 2016 or the Labuan Companies Act 1990.
(4) Paragraph (1)(a) shall not affect the rights—
(a) to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor; or
(b) to commence or continue any criminal proceedings, or any action or proceedings by any person or body having regulatory, supervisory, investigative or enforcement functions of a public nature where such action or proceedings is brought in the exercise of those functions.
(5) Subsection (1) shall not affect the rights of any person to apply for, or otherwise initiate, the commencement of proceedings under Malaysian insolvency law, or the rights to file a claim in such proceedings.
(6) In addition to and without prejudice to the powers of the Court under subsection (2), the Court may, on the application of the foreign representative or any person affected by the stay and suspension referred to in subsection (1), or on its own motion, modify or terminate such stay and suspension or any part of it, either wholly or for a limited period, on such conditions as the Court thinks fit.
(7) In this section, “security” means any charge, lien, mortgage, pledge, hypothecation or any other security recognized by law including any security accepted in relation to matters of admiralty in Malaysia.
Relief that may be granted upon recognition of foreign proceedings
(1) Upon recognition of foreign proceedings, whether as foreign main proceedings or foreign non-main proceedings, where necessary to protect the property of the debtor or the interests of the creditors, the Court may, on the application of the foreign representative, grant any appropriate relief as the Court thinks fit, including an order—
(a) staying the commencement of or continuation of any individual action or proceedings concerning the property, rights, obligations or liabilities of the debtor, to the extent such action or proceedings have not been stayed under paragraph 20(1)(a);
(b) staying any execution against the property of the debtor, to the extent such execution has not been stayed under paragraph 20(1)(b);
(c) suspending the rights to transfer, encumber or otherwise dispose of any property of the debtor, to the extent such right has not been suspended under paragraph 20(1)(c);
(d) for the examination of witnesses, the taking of evidence or the delivery or production of information concerning the property, affairs, rights, obligations or liabilities of the debtor;
(e) entrusting the administration or realization of the whole or any part of the property of the debtor located in Malaysia to the foreign representative or such other person as the Court may appoint, for the purpose of protecting and preserving the value of such property;
(f) extending any relief granted under subsection 19(1); and
(g) that may be available to a Malaysian insolvency office-holder under the laws of Malaysia.
(2) If relief is granted under paragraph (1)(e) to a foreign representative or such other person as the Court may appoint, the Court may, on the application of the foreign representative or such other person as the Court may appoint, where the distribution applied for involves the transfer of any property of the debtor to any person outside Malaysia, the foreign representative or such other person as the Court may appoint shall first obtain leave of the Court, and such leave shall only be granted if the Court is satisfied that the interests of creditors in Malaysia are adequately protected.
(3) For the purposes of subsection (2), before making any order for the transfer of any property of the debtor to any person outside Malaysia, the Court shall ensure that the foreign representative or such other person as the Court may appoint has certified or provided a guarantee to the Court that the claim of creditors in Malaysia, whose debts do not exceed the threshold as prescribed by the Minister by order published in the Gazette, have been met and satisfied from the property applied to be so transferred.
(4) In granting relief under subsection (1) to a foreign representative of foreign non-main proceedings, the Court shall be satisfied that such relief relates to—
(a) property which, under the laws of Malaysia, should be administered in the foreign non-main proceedings; or
(b) information required in the foreign non-main proceedings.
(5) Nothing in paragraphs (1)(a), (b), (c), (e) and (g), and subsection (2) shall affect the rights to commence or continue any criminal proceedings or any action or proceedings by any person or body having regulatory, supervisory, investigative or enforcement functions of a public nature, where such action or proceedings is brought in the exercise of those functions.
(6) For the purposes of this section, the Minister, after consultation with the Minister of Finance and the Minister charged with the responsibility for companies, may amend the threshold referred to in subsection (3), by order published in the Gazette.
Protection of creditors and other interested persons
(1) In granting or refusing any relief under section 19 or 21, or in modifying or terminating any relief under subsection (3) or subsection 20(6), the Court shall be satisfied that the interests of the creditor, including the creditor in Malaysia, any secured creditor or party to a hire-purchase agreement, and any other interested person, including the debtor where appropriate, are adequately protected.
(2) The Court may impose such conditions on the grant of relief under section 19 or 21 as the Court deems appropriate, including requiring the foreign representative to furnish security for the due performance of his functions.
(3) The Court may, on the application of the foreign representative or any person affected by the relief granted under section 19 or 21, or on its own motion, modify or terminate the relief.
Actions to avoid acts detrimental to creditors
(1) Subject to subsections (6) and (9), upon recognition of foreign proceedings, a foreign representative shall have locus standi to apply to the Court for an order under, or in connection with sections 352, 366, 426, 472, 528, 529, 530, 531, 540 and 541 of the Companies Act 2016 and section 20 of the Labuan Companies Act 1990.
(2) Where a foreign representative makes such an application under subsection (1), the provisions of the Companies Act 2016 and the Labuan Companies Act 1990 as referred to in subsection (1) shall apply—
(a) regardless of whether the debtor is being wound up, is placed under judicial management, or is undergoing a scheme of compromise or arrangement under the Companies Act 2016 or the Labuan Companies Act 1990, as the case may be; and
(b) subject to the modifications specified in subsection (3).
(3) For the purposes of this section, the applicable modifications are as follows:
(a) for the purposes of section 366 of the Companies Act 2016, the date which corresponds with the commencement of a scheme of compromise or arrangement shall be the date of the opening of the relevant foreign proceedings;
(b) for the purposes of section 426 of the Companies Act 2016, the date which corresponds with the presentation of an application for judicial management shall be the date of the opening of the relevant foreign proceedings;
(c) for the purposes of section 472 of the Companies Act 2016, the date which corresponds with the presentation of a winding up petition shall be the date of the opening of the relevant foreign proceedings;
(d) for the purposes of sections 528, 529, 530, 531, 540 and 541 of the Companies Act 2016, the date which corresponds with the presentation of a winding up petition in the case of winding up by Court or passing of the resolution in the case of voluntary winding up, shall be the date of the opening of the relevant foreign proceedings; and
(e) for the purposes of section 20 of the Labuan Companies Act 1990, the date which corresponds with the date the ultra vires transaction is sought to be restrained shall be the date of the opening of the relevant foreign proceedings.
(4) For the purposes of subsection (3), the date of the opening of the relevant foreign proceedings shall be determined in accordance with the law of the foreign State where the foreign proceedings take place, including any rule of law under which the foreign proceedings are deemed to have been opened at an earlier date.
(5) Where the foreign proceedings are foreign non-main proceedings, the Court shall be satisfied that the application under this section relates to property which, under the laws of Malaysia, should be administered in the foreign non-main proceedings.
(6) Where, at the time the application is filed, proceedings in respect of the debtor are pending under Malaysian insolvency law, the foreign representative shall not make an application under this section without the leave of the Court.
(7) Upon granting an order in relation to the application under this section, the Court may give such directions regarding the distribution of any proceeds of the claim by the foreign representative, as it thinks fit, to ensure that the interests of creditors in Malaysia are adequately protected.
(8) Nothing in this section shall affect the rights of a Malaysian insolvency office-holder to make any application under, or in connection with, any of the provisions specified in subsection (1).
(9) Subsection (1) shall not apply in respect of any preference given, floating charge created, alienation, assignment made, or other transaction entered into before the date of the coming into operation of this Act.
Intervention by foreign representative in proceedings in Malaysia
Upon recognition of foreign proceedings, a foreign representative may, subject to compliance with the requirements under the Companies Act 2016, the Labuan Companies Act 1990 or any other applicable written laws, intervene in any proceedings in which the debtor is a party.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
