Application To Set Aside Order Sanctioning Scheme Of Arrangement Dismissed

• Published date: 05 March 2024
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law
• Law Firm: Juen, Jeat, Nic & Nair
• Author: Juen, Jeat, Nic & Nair

On 16.02.2023, our Tai Wei Jeat and Maxine Lim successfully resisted an application by a creditor to set aside an order sanctioning a scheme of arrangement under Section 366 of the Companies Act 2016 ("Sanction Order").

At the hearing, the arguments centered around whether the High Court had jurisdiction to set aside the Sanction Order that it had previously granted. The parties were in agreement that there appeared to be no reported decisions by the Malaysian Courts specifically dealing with this issue. Further, there is no express provision in the Companies Act 2016 dealing with the Court's jurisdiction to set aside a sanction order.

On behalf of our client, we contended that there was no reason why the general principle enunciated by the Federal Court in Badiaddin Bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393 as well as Hock Hua Bank Bhd v Sahari bin Murid [1981] 1 MLJ 143, (i.e. a court may only vary or set aside a judgment...