(a) In relation to each type of insolvency procedure available in the legal system of this economy, to what extent are the claims of foreign creditors recognised in the context of administration of that procedure?

 

There is no discrimination under Malaysian law as to recognition of claims of foreign creditors and local creditors.

(b) What principles or rules apply to the recognition and admission of claims by foreign creditors? (for example

(i) Are claims by foreign creditors subject to particular rules in relation to priority of payment?

(ii) Do foreign creditors have to satisfy special or additional requirements in order for their claims to be admitted?)

 

Claims by foreign creditors are not subject to particular rules in relation to priority of payment. Foreign creditors do not have to satisfy special or additional rules for their claims to be admitted. The only special provision that applies to foreign creditors is the Exchange Control Act 1953, and even then only in relation to taking out the fruits of the claim when the claim is satisfied, in that permission of the Controller of Exchange Control (i.e. Bank Negara Malaysia) is required, but in practice rarely refused.

(c) What law is applied to establish the validity of foreign claims?

 

As to what law is applied to establish the validity of foreign claims, Malaysian insolvency law would, under normal conflicts of laws principles, apply the law that governs the debt or claim under such principles.

(a) To what extent does the insolvency law of this economy claim jurisdiction over assets of a corporate debtor situated abroad?

 

In so far as the liquidation under Malaysian legislation of a Malaysian incorporated company is concerned, a Malaysian liquidator would be regarded under Malaysian law and under conflicts of law principles as having jurisdiction over assets of the corporate debtor situated abroad. It would be expected that by comity, under the rules of private international law, a foreign court within whose jurisdiction the assets are situate, would recognize the status of the Malaysian liquidator.

(a) To what extent do the rules of private international law of the legal system of this economy recognise insolvency procedures commenced in foreign jurisdictions?

 

Although there is hardly any specific case law authority, on first principles, the rules of private international law applied in Malaysia would recognise foreign insolvency procedures commenced in foreign jurisdictions, such as a foreign liquidator appointed in the country of incorporation. In fact section 340(2) of the Companies Act recognises the foreign liquidator though the High Court may appoint a local liquidator for Malaysia in relation to Malaysian assets who is obliged to pay the net amount realised from the Malaysian assets (after satisfying any liabilities inccurred in Malaysia by the foreign company) to the foreign liquidator.

(b) Under what circumstances, if any, may orders or judgments resulting from foreign insolvency procedures or administrations be recognized or enforced in the legal system of this economy?

 

Save for the recognition of the status of a foreign liquidator appointed by the place of incorporation of a foreign company, there are no circumstances where Malaysian law recognises or enforces foreign insolvency procedures or orders.

(a) What recognition is accorded in the legal system of this economy to the status and capacity of insolvency administrators (for example trustees, liquidators, receivers) appointed in foreign insolvency procedures?

 

Malaysian law recognises a liquidator appointed by a court of the place of incorporation. It may be surmised that under the rules of private international law, Malaysian law recognises the exercise of powers by any other insolvency administrator such as a receiver of a foreign corporate debtor to the extent that it can be shown that the exercise of those powers is authorised by the law of the country of incorporation of the foreign corporate debtor.

(b) To what extent are foreign insolvency administrators entitled to claim, take control of, and realise or deal with property of the corporate debtor situated within the jurisdiction of the legal system of this economy?

 

By virtue of his office and status under the law of the place of incorporation, the foreign liquidator could claim, take possession of, realize or deal with assets of the corporation in Malaysia to the extent that it can be shown that the exercise of those powers is authorised by the law of the country of incorporation of the foreign corporate debtor.

(a) To what extent does the legal system of this economy recognise the validity of rights of security asserted by foreign creditors over assets of the corporate debtor?

 

Rights of security asserted by foreign creditors over assets of a Malaysian corporate debtor are recognized.

(b) Are any special rules applicable to determine the validity, extent and ranking of such security rights?

 

In so far as these assets may be situated outside Malaysia, these rights are recognised if the rights are valid under the governing law of the security assuming the governing law to be other than Malaysia.

(a) To which international conventions having some application in insolvency matters is this economy a party?

 

There are no international conventions with some bearing on insolvency that Malaysia appears to be a party to.

(a) Are there any other particular issues or special problems in the field of cross-border insolvency, not included in the answers supplied above, which have presented themselves before the courts of the legal system of this economy?

 

To the best of the writer's knowledge, there are no particular issues or special problems in the field of cross-border insolvency that have presented themselves before the courts of Malaysia.

(a) Is the government of this economy aware of the UNCITRAL model law on cross-border insolvency, approved by the United Nations in June 1997?

 

The government of Malaysia is aware of the UNCITRAL model law on cross-border insolvency.

(b) If so, are you aware of whether the government has any proposals to enact the terms of the model law?

 

The writer is not aware of any proposals to enact the terms of the model law within the very near future.