Beyond Statutory Enforcement: Malaysia's Apex Court Dismisses A Common Law Action For Enforcement Of Foreign Judgment Due To Failure To Adduce The Foreign Judgment

• Law Firm: Herbert Smith Freehills
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Author: Mr Peter Godwin, Craig Shepherd, Tse Wei Lim and Emily Lim
• Published date: 04 April 2023

There is a simple, but fundamental, difference between a statutory enforcement under Reciprocal Enforcement of Judgments Act 1958 ("REJA") and a common law action. REJA covers cases where a judgment creditor wants to enforce a decision from a jurisdiction which enforces Malaysian court judgments (the so called 'reciprocity'). When REJA applies, the foreign judgment can effectively be converted into a Malaysian judgment. However, if a creditor holds a judgment from somewhere that does not enforce Malaysian decisions, then it may still be enforced through a common law action. Here, the creditor brings a new Malaysian court case where it sues the debtor on the judgment. The claim is not a full re-examination of the underlying dispute (e.g., 'you owe me money because you are in breach of contract'), but it relies on the foreign judgment (e.g., 'you owe me money because the courts of the UAE have said you do').

The Federal Court in Pembinaan SPK Sdn Bhd v Conaire Engineering Sdn Bhd-LLC & Anor [2023] 3 MLRA 287 has recently affirmed the legal position in Malaysia that a judgment creditor may institute a fresh action in the local courts to enforce a foreign judgment from a non-reciprocating country.

The Court was asked 6 questions on the procedural and evidential requirements to enforce foreign judgments by common law actions:

1. Whether a foreign judgment is enforceable by a common law action in Malaysia (the foreign country not being a First Schedule country under REJA) if the judgment is not proved as a foreign judgment or order in accordance with the Evidence Act 1950?

2. Whether a foreign judgment purporting to be a default judgment where liability on quantum and assessment of compensation was decreed in absentia satisfies the basic rules of fair procedure and natural justice to be enforceable by way of a common law action in the Malaysian courts?

3. In a common law action to enforce a foreign judgment not being a First Schedule country under the REJA, without the foreign judgment being proved in accordance with Chapter V of the EA 1950 whether there is a sustainable cause of action for other evidence to be admitted and weighed?

4. In a common law action to enforce a foreign judgment not being a First Schedule country under the REJA, whether the party responding to the common law action is limited only to the defences set out in See Hua Daily News Bhd v Tan Thien Chin & Ors [1986] 2 MLJ 107?

6. In a common law action to enforce a foreign judgment not being a...