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Articles of Law with Bhagf Singh

A court in a foreign country can adjudicate on a dispute even though the defendant and the subject matter are in Malaysia. However, when it comes to enforcement, the Malaysian courts will have the final say.

WHEN a dispute arises between two or more parties, the legal system provides for the dispute to be decided by the courts. If both parties are in the same locality, including the subject in dispute, then nothing stands in the way.

But when the plaintiff and defendant are in different parts of the country, and the subject in question is somewhere else, where should the action be filed?

Quite often the court has to overcome the disagreement over where the action should be filed or where it should be transferred to, before it gets down to deliberating the issues in dispute.

For civil matters involving parties within the country, guidance is provided by Section 23 of the Court of Judicature Act 1964.

The High Court has jurisdiction to try all civil proceedings where the cause of action arose or where the defendant resides or has his place of business, or where the facts on which the proceedings are based exist or are alleged to have occurred.

“Local jurisdiction” means the territory comprising Johor, Kedah, Kelantan, Malacca, Negri Sembilan, Pahang, Penang, Perak, Perlis, Selangor, Terenganu and the Federal Territory of Kuala Lumpur; in the case of the High Court in Sabah and Sarawak, the territory covers Sabah, Sarawak and the Federal Territory of Labuan.

In the case of Subordinate Courts, which include the Sessions Court, the provisions are slightly different. Section 59 (2) of the Subordinate’s Court Act 1948, for example, provides for jurisdiction to be for the local limits assigned to it, and if no local limit is assigned, the jurisdiction of respective High Courts.

Non-compliance

Where an action is filed which is not consistent with these criteria, it is common for one party or another to apply to the court to transfer the matter to be heard to where the defendant resides or where the cause of action arose.

This has led many people to believe that an action must always be filed bearing in mind where the defendant resides or where the cause of action arose. If this is not done, then there may be grounds for objection.

This has led to the perception that if there is a dispute between a person residing in Malaysia and the facts that relate to the dispute are in Malaysia, then the foreigner should come to Malaysia and sue in the Malaysian courts.

Thus it came as a surprise to many when suits were filed and judgment given in the Singapore courts in two cases involving Singaporeans, arising out of accidents which occurred across the Causeway.

One involved a car accident in Johor Baru, causing injuries and damage to property; the other accident on the North-South Highway resulted in death.

Though people have been travelling across the Causeway for decades and accidents have occurred from time to time, the two recent cases seem to be the first to surface where the appropriateness of the Singapore court as the forum for settling accidents which occurred across the Causeway, has been called into question.

At first, it may appear that the claim should have been brought to the Malaysian courts. However, in both the cases, even though the lawyers for the defendant argued that the claim should be brought to and heard in the Malaysian courts as the accident happened here and the defendant also resided here, the court did not agree.

For a variety of reasons, the defendant in such a situation would want to have the matter heard and dealt with in the Malaysian courts. But would it be wrong for the Singapore court to give itself jurisdiction?

Law and rationale

Whether the Singapore court has jurisdiction would depend on the law in Singapore. Obviously the court took the view that it had jurisdiction. It would be relevant to note that Singapore, by reason of its position, gives itself extra territorial jurisdiction in various situations.

Apart from that, the court in Singapore appears have to taken the position that the law relating to negligence on the road is essentially the same in Singapore and Malaysia. But this is an issue of applicable law rather than the place where the adjudication should have taken place.

In both cases, the court seems to have relied on the fact that liability was not an issue and the only question was how much should be paid.

In one case, the plaintiff involved in the accident carried out the repairs and obtained treatment in Singapore.

It emerged that the method of computing damages in Malaysia was different from the method in Singapore. Dependency claims in Malaysia are codified in statute law unlike in Singapore, where it is based on cases heard before. This would mean a difference in the amount eventually awarded.

The judge took the view that the claimant should be compensated for what he had lost and what he would lose in Singapore. He added: “There is also a subtle but appreciable difference between getting an award in Malaysian currency after having taken the cost of living in Singapore into account, and an award that is made directly in Singapore.”

Hence instituting an action in Singapore would result in the claimant getting a better award for the same injury.

The judge went on to say: “Where Malaysian law on damages works to Mr Ismail’s disadvantage compared to Singapore law, it was only right that the defendants and their insurers should be the ones to bear the detriment rather than the victims of the negligence.”

In conclusion

Of course, in such cases the payment is eventually coming from the insurers. To what extent this has any relevance is open to conjecture.

Otherwise it is open to the court to consider itself having jurisdiction to hear a matter and to proceed to make a decision.

However, if the defendant is in a different country and does not have assets within the jurisdiction, the decision will need to be enforced in the other country.

If one party is not satisfied with the judgment, the matter will have to come before the Malaysian courts for registration prior to enforcement.

In such a situation, the Malaysian courts will have to decide on the applicable law and considerations relating to enforcement of foreign judgments in such circumstances.

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