Lee Hishammuddin Allen & Gledhill

Lee Hishammuddin Allen & Gledhill is delighted to announce that our Intellectual Property & Innovative Technology practice, led by Partner Chng Keng Lung, has been recognised in the WTR 1000 2026 – The World’s Leading Trademark Professionals, a prestigious ranking by World Trademark Review (WTR).This year, the firm received recognition in the following categories:Prosecution & Strategy | BronzeLicensing & Transactions | RecommendedIn addition, Chng Keng Lung was individually recognised across three categories:Prosecution & Strategy | SilverEnforcement & Litigation | BronzeTransactions | Recommended The WTR 1000 is the definitive guide to the world’s leading trademark professionals. Drawing on extensive research and client feedback, it highlights top firms and practitioners for their legal expertise, commercial awareness, and standing in the market.These recognitions underscore the Firm’s continued commitment to excellence in intellectual property law and its focus on delivering high-quality, strategic advice to clients.

Lee Hishammuddin Allen & Gledhill is delighted to announce that the In-House Community (IHC) has named us the leading Malaysian firm across five key practice areas. Driven by testimonials from in-house counsel, this is a significant upward trajectory as we now have two additional recognised practice areas compared to last year.In the special issue of the IHC eMagazine’s ‘Firms of the Year 2025’, we have been awarded:Capital Markets Law Firm of the YearEmployment Law Firm of the YearInternational Arbitration Law Firm of the YearReal Estate/Construction Law Firm of the YearTechnology, Media and Telecommunications Law Firm of the YearAdditionally, the firm received Honourable Mentions in the following areas:Banking and FinanceCorporate and M&AWe owe this progress to the steadfast support of our clients and our team’s tireless pursuit of excellence.

We are pleased to share that Lee Hishammuddin Allen & Gledhill’s Real Estate Dispute team has completed the latest update to the Halsbury’s Laws of Malaysia – Landlord and Tenant title, published by LexisNexis Malaysia. Halsbury’s Laws of Malaysia is one of the country’s leading legal reference works, relied upon by legal practitioners, members of the judiciary, academics and policymakers for its practical and concise guidance on key areas of Malaysian law. This updated Landlord and Tenant title reflects contemporary legal and regulatory developments in this area and provides comprehensive coverage of, among others:the Relationship, rights, and obligations of landlord and tenant;tenancies;leases and sub-leases;repair, fitness and alterations;determination of tenancies and recovery of possession;other related landlord and tenant matters. This publication is the product of the team’s collective effort and commitment to contributing to the development and accessibility of Malaysian legal knowledge. The update was prepared by Ho Ai Ting (Partner), Preveena Ravindra Kumar (Senior Associate), and Man Weng Keat (Associate).

AMAR JAZLI JAMAL v GARDENIA BAKERIES (KL) SDN BHD(Writ Saman No.: BA-23NCvC-11-03/2023) It is trite that employers have a general duty to ensure a safe and secure working environment for all employees, including taking reasonable measures to prevent violence, maintain workplace discipline, and protect the well-being of all personnel under its care[1]. In Malaysia, this duty is governed by both statutory law, primarily the Occupational Safety and Health Act 1994 (“OSHA 1994”), and the common law duty of care owed by an employer to its employees. Importantly, the duty to ensure a safe and secure working environment is not confined to preventing physical injury alone. Such a duty extends to preventing psychiatric injuries, such as depression, anxiety, or post-traumatic stress disorder (“PTSD”), allegedly arising from bullying, harassment, or other psychosocial risks at work.In the United Kingdom, the Court of Appeal in HATTON v SUNDERLAND [2002] 2 All ER 1, held that an employer may be held liable for psychiatric injury arising from workplace stress, applying the ordinary principles of tort where such injury is reasonably foreseeable and the employer failed to take reasonable steps to prevent it. Similarly, in GOPAL K VEERAPPAN v GALA TRACK SDN BHD [2026] ILJU 32, the Industrial Court recognised that an employer’s duty which is rooted in the implied term of mutual trust and confidence is not only confined to ensuring an employee’s physical safety but extends equally to the protection of employees’ mental health, including protection from psychiatric injury. The crucial question is when does an employer become responsible for such workplace risks?This was addressed by the Shah Alam High Court in AMAR JAZLI JAMAL v GARDENIA BAKERIES (KL) SDN BHD, where the Plaintiff, a former General Worker based at the Company’s Puchong Plant, alleged that he had been bullied by his co-workers, causing him to suffer depression and PTSD. The Plaintiff’s case was premised on his contention that the Company, as his employer, had failed to provide a healthy and safe working environment. While the High Court accepted that the Company owed both a common law duty of care and a statutory duty under Section 15 of OSHA 1994, the High Court was not satisfied that the Company had breached that duty.A key reason for the Court’s finding was that the Company had no notice of the alleged bullying prior to February 2022. There was no written complaint, report, or supporting documentation showing that the Plaintiff had raised the issue with management earlier, even when he submitted leave applications or SOCSO claims. The Plaintiff also admitted during cross-examination that, although he had opportunities to raise workplace issues with management, he did not do so. The High Court therefore found that, without any complaint being communicated to management, it would not have been possible for the Company to have knowledge of the alleged incidents or to take investigative action. When the Plaintiff eventually raised the issue on 14 February 2022, the Company took immediate steps to investigate the allegations.The High Court also held that the Plaintiff had failed to prove the alleged bullying. He did not call the alleged perpetrators or key witnesses, and there was insufficient corroborative evidence to support his allegations. Although the Plaintiff had been diagnosed with depression and PTSD, the High Court was not satisfied that the condition was caused by the Company’s conduct. This case demonstrates the significance of internal reporting systems being the employer’s first line of defence. In this case, the Company had in place a clear avenue to raise complaints, allowing it to identify, investigate, and address workplace risks before they escalate.Thus, the Company had taken all the necessary steps to fulfil its common law and statutory duty to ensure a safe and secure working environment for all its employees. Since there was no complaint, no report, and no prior indication of the alleged risk, the Company was able to establish that it had no reasonable opportunity to intervene. Nevertheless, employers should continuously assess its internal policies and ensure that the following mechanisms are in place: 1. a written policy setting out the procedure for employees to report bullying, harassment, threats, intimidation, workplace violence, victimisation, discrimination, or other misconduct, including the available reporting channels and the persons or departments responsible for receiving such complaints;2. multiple accessible reporting channels which are not limited to an employee’s immediate superior, such as Human Resources, a designated complaints officer, senior management, or a whistleblowing channel;3. proper communication of the reporting procedure to all employees through handbooks, internal circulars, briefings, training sessions, or written acknowledgements;4. proper documentation of all complaints, including the date of the complaint, the complainant’s details, the nature of the allegation, the persons involved, the steps taken by the employer, and the outcome of the investigation;5. prompt and fair investigation once a complaint is received, where the complainant, the alleged wrongdoer, and relevant witnesses are given an opportunity to provide their respective versions of events;6. interim protective measures, where necessary, such as separating the employees involved, adjusting reporting lines, temporarily changing duties, granting leave, or imposing temporary restrictions pending the outcome of the investigation; and7. confidentiality and protection against retaliation or victimisation, so that employees are encouraged to raise complaints in good faith without fear of adverse consequences. The Company was represented in the Shah Alam High Court by Partners, Shariffullah Majeed and Arissa Ahrom, of Lee Hishammuddin Allen & Gledhill.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]). [1]           INTHIRAN BATHUMALAI v KUALA LUMPUR KEPONG BERHAD [2025] 2 ILR 588

Lee Hishammuddin Allen & Gledhill is pleased to announce the publication of The Malaysian Stamp Duty Handbook: Commentary and Practical Guidance, published by Thomson Reuters and authored by Partners Jason Tan Jia Xin and Chris Toh Pei Roo, together with Senior Associate Jay Fong Jia Sheng.To mark its publication, Thomson Reuters and LHAG will be holding an official book launch on Wednesday, 22 July 2026, from 3.30 p.m. onwards, at the Asian International Arbitration Centre, Kuala Lumpur. The launch will be officiated by The Hon. Justice Dato’ Seri Vazeer Alam bin Mydin Meera, Judge of the Federal Court. The dress code is office attire.Join us for an afternoon of practical and timely stamp duty discussions, featuring:Panel Discussion – The First Six Months: A Regulator and Practitioners’ View of Stamp Duty Self-AssessmentA discussion involving the Inland Revenue Board of Malaysia, the private sector and tax legal practitioner on the first six months of stamp duty self-assessment, including practical compliance issues, implementation challenges, enforcement trends and key areas of uncertainty for taxpayers, businesses and advisers.The panel will feature:1. Shafudin bin YacobDirector, Stamp Duty and Real Property Gains Tax Operations DepartmentInland Revenue Board of Malaysia2. Fitriah YusofHead of TaxMaxis Berhad3. Jason Tan Jia XinPartner, Tax, Customs & TradeLee Hishammuddin Allen & GledhillSeats are limited.Register here.Please click here for more information.We look forward to welcoming you to the launch.About the BookThe Handbook provides commentary and practical guidance on Malaysian stamp duty law, including the operation of the Stamp Act 1949, common instruments and transactions, exemptions, assessments, objections and disputes. It is intended as a practical reference for legal practitioners, tax advisers, businesses and other stakeholders navigating Malaysia’s stamp duty framework. To purchase a copy of The Malaysian Stamp Duty Handbook: Commentary and Practical Guidance, please click here.09 July 2026

“…in appropriate cases, the court is willing to lift the veil of incorporation when the justice of the case so demands…” The Court of Appeal’s recent decision in Ketua Pengarah Kastam v Batu Tiga Quarry Sdn Bhd is a noteworthy development in Malaysian tax law. In dismissing Customs’ appeal, the Court held that, in appropriate cases, the Court may look beyond separate legal personality and treat a parent company and its subsidiary as a single commercial unit, where the economic reality so demands.Although the dispute arose under the now-abolished GST regime, the principles articulated by the Court have continuing relevance across all tax matters, particularly for businesses operating through group structures. BackgroundBatu Tiga Quarry Sdn Bhd (“BTQ“), a wholly-owned subsidiary of YTL Cement Bhd, operates a quarry and trades in granite aggregates, supplying products both locally and to customers in Singapore. BTQ has been GST-registered since 1 April 2015.In 2011, BTQ entered into a sale and delivery agreement with YTL Cement Marketing Singapore Pte Ltd (“YTL“), pursuant to which BTQ agreed to sell and deliver quarry products to YTL and its end customers in Singapore. The products were produced from rock materials extracted from Kulai Quarry, the operations of which BTQ had taken over from its wholly-owned subsidiary, CIQ Quarry & Marketing Sdn Bhd (“CIQ“), in July 2007.Notwithstanding this, for export purposes, the export declaration forms (K2 Forms) continued to be declared under CIQ’s name, as the holder of the relevant Approved Permit, rather than BTQ’s name. Customs subsequently took the view that BTQ had underpaid GST by zero-rating the exported quarry products, on the basis that only CIQ, being the party named in the K2 Forms, could qualify as the exporter. A Bill of Demand in the sum of RM1,196,461.46 was accordingly issued to BTQ.Key IssueThe central question before the Court of Appeal was whether BTQ was entitled to zero-rate its export supplies under Section 17(1)(b) of the Goods and Services Tax Act 2014 (“GST Act”), despite not being named as the exporter in the K2 Forms.Customs’ PositionCustoms argued that BTQ and CIQ were separate legal entities, and that only the party named as the exporter in the K2 Forms could qualify for zero-rating. On that basis, Customs contended that BTQ was not entitled to zero-rate the export supplies.Decision of the Court of AppealThe Court of Appeal upheld the High Court’s decision in favour of BTQ and rejected Customs arguments. The Court’s reasoning can be distilled into four key principles:1. No Extra-Statutory ConditionThe Court upheld the trite rule that tax legislation must be interpreted strictly. Section 17(1)(b) of the GST Act applies where “the goods are exported.” There is no additional statutory requirement that the supplier must also be the entity named in the K2 Form; accordingly, Customs cannot impose an additional condition not found in the statute.2. K2 Forms Are Not ConclusiveThe Court held that the particulars recorded in the K2 Forms are not conclusive evidence of who the exporter is. The form reflects administrative compliance with customs requirements; it does not determine the entity entitled to claim zero-rating tax treatment.3. Substance and Commercial Reality PrevailThe Court examined the underlying facts and found that it was BTQ, and not CIQ, that:Used its expertise and industry knowledge to operate the quarry;Bore all costs and expenses of the quarry operations;Directly paid land tributes; andActively supplied the quarry products to YTL and its customers in Singapore.Based on these facts, BTQ was, in substance, the true exporter.4. Corporate Veil May Be Lifted in Tax CasesMost significantly, the Court held that where justice requires, it is prepared to lift the corporate veil and treat the parent and subsidiary as one single unit. Applying this principle, the Court held that the corporate veil of CIQ ought to be lifted and that BTQ is, in fact, the true exporter of the quarry products for the purposes of Section 17(1)(b) of the GST Act, and was accordingly entitled to zero-rating. Why This Decision MattersThis decision is significant for businesses operating through group structures or shared operational models. The Court’s reasoning establishes several important propositions:Separate legal personality is the starting point, but not always the end of the inquiry. The Court’s willingness to lift the corporate veil, even for the purposes of claiming tax benefits (zero-rating treatment), confirms that, in tax cases, Courts may examine the commercial reality of the arrangement, including who truly bears the economic burden, performs the operational role, and in fact makes the supply. Importantly, this doctrine is not confined to traditional company law disputes, nor is it a tool available only to the tax authorities in imposing liability; it may equally be invoked by the taxpayers to establish their entitlement to the relevant tax treatment.Tax authorities cannot impose requirements not found in the statute. Tax treatment cannot be denied by reading additional conditions into legislation where none exist.Documentation matters, but commercial substance may prevail. Where the underlying facts point clearly in a different direction, the administrative forms will not be determinative.Practical Takeaways for BusinessesWhile this case arose under the now-abolished GST regime, the broader principle that courts are willing, in appropriate cases, to look beyond form and give effect to commercial reality is likely to remain relevant in future tax disputes.In light of this decision, businesses operating through group structures should consider the following:Align legal documentation with operational reality. Ensure that your contracts, permits, and declarations reflect who is actually operating the business and bearing the commercial risk.Clarify roles within the group. Where a parent and subsidiary share functions, there should be clarity on who is the contracting party, supplier, exporter, and risk-bearer—both in documentation and in practice.Be prepared for scrutiny based on substance. Group arrangements may be examined on the basis of economic reality, not merely corporate form, by both tax authorities and the Courts. Lee Hishammuddin Allen & Gledhill successfully represented Batu Tiga Quarry Sdn Bhd before the Court of Appeal and High Court. The team was led by Andrew Chiew Ean Vooi (Partner), assisted by Ivy Ling Yieng Ping (Partner) and Charlene Woon Zi Xuan (Associate).The Court of Appeal’s grounds of judgment can be accessed here. The High Court’s grounds of judgment can be accessed here.This alert is written by Ivy Ling Yieng Ping, Partner, and Charlene Woon Zi Xuan, Associate of LHAG’s Tax, Customs and Trade.For further information on how this decision may affect your business or group structure, please do not hesitate to contact our Partner Ivy Ling Yieng Ping ([email protected])This alert is prepared for general informational purposes only and does not constitute legal advice. Specific legal advice should be sought for any particular circumstances.

KESATUAN PEKERJA-PEKERJA PERUSAHAAN LETRIK v KONICA MINOLTA BUSINESS TECHNOLOGIES (MALAYSIA) SDN BHD(Award No.: 819 of 2026)The right of employees to participate in lawful trade union activities is a protection that employers must actively respect as provided under Section 4 (1) of the Industrial Relations Act 1967 (“IRA 1967”):“No person shall interfere with, restrain or coerce a workman or an employer in the exercise of his rights to form and assist in the formation of and join a trade union and to participate in its lawful activities.”The significance of this protection is particularly apparent in a trade union’s claim for recognition. A claim for recognition is an important step, as it is only upon recognition being accorded to the trade union of workmen concerned that the trade union will have the ability to commence a collective bargaining process with the employer or trade union of employers pursuant to Section 13 of IRA 1967. In the event that an employer does not accord recognition, under Section 9 (4A) of IRA 1967, the matter may be referred to the Director General of Industrial Relations (“DGIR”), who may direct that a secret ballot be conducted to ascertain whether the trade union has the requisite support from the employees concerned.An employer’s conduct throughout a secret ballot may come under close scrutiny as actions that would ordinarily be regarded as part of normal workplace management may, in the context of a recognition exercise, assume a very different character. What appears on its face to be routine communication, or ordinary operational activity may instead be viewed as pressure, inducement, or even subtle coercion if it has the effect of discouraging employees from freely exercising their right to vote.In the case of KESATUAN PEKERJA-PEKERJA PERUSAHAAN LETRIK v KONICA MINOLTA BUSINESS TECHNOLOGIES (MALAYSIA) SDN BHD, a trade union dispute arose after recognition was not accorded to the Union upon failing to achieve a simple majority of support by the Company’s eligible employees following a secret ballot that was held for 2 days. Based on this outcome, the Union alleged that the Company had interfered with the secret ballot process and the employees’ freedom to vote. The alleged acts of interference included:(a)        a routine town hall session that was held 2 days before the first secret ballot day 10th June 2023;(b)       the presence of Human Resources personnel at the canteen area, and(c)        having RELA members stationed at Company’s premises. However, the Industrial Court held that the Company’s activities and conduct were part of its ordinary day-to-day business operations and did not constitute interference with employees’ freedom to vote. The town hall sessions conducted was part of its broader employee engagement initiative introduced to promote communication, transparency and alignment with the Company’s goals and values. Importantly, the Company was able to demonstrate that there were no discussions regarding the Union or the secret ballot during the town hall sessions.As for the presence of Human Resources personnel, the Company established that its Human Resources team had been conducting open interviews every Tuesday at the canteen area since May 2023 itself, weeks before the secret ballot was even held. Coincidentally, the first secret ballot day fell on a Tuesday, which coincided with the scheduled interview session. Similarly, the Court found that the presence of RELA members did not constitute interference, as they had been engaged by the Company since 2022 to ensure the security and safety of its employees as well as to assist with traffic control, especially during peak hours. Importantly, the Human Resources personnel and RELA members were situated away from the polling stations, and there were no complaints that any employee had been prevented from exercising their right to vote.The Industrial Court found, among others, that the secret ballot process was conducted in compliance with the Industrial Relations Regulations 2009 (“IRR 2009”) and that the Company had complied with the DGIR’s directions leading up to the secret ballot days by:(a)     allowing Department of Trade Union officers to visit the Company’s premises for the purpose of investigating the Union’s claim for recognition on 14th December 2022;(b)     submitting the required employee details through Form B on 27th March 2023 as required by the Industrial Relations Department (“IRD”);(c)     attending meetings on 11th May 2023 and 25th May 2023 with the IRD and the Union to agree on the secret ballot arrangements; and(d)     displaying Form C on the Company’s notice board in the canteen for seven consecutive days before the secret ballot days. This decision provides a useful framework for assessing whether an employer’s conduct during a secret ballot is likely to be regarded as legitimate business activity or unlawful interference. While employers are not required to suspend their ordinary workplace operations during a secret ballot, any communication or activity carried out during this period should remain neutral, genuinely business-related and unrelated to employees’ decision on union recognition. Employers should therefore avoid any conduct that may reasonably be perceived as an attempt to influence employees’ voting decisions, for example:(a)     communicating with employees to discourage support for the union or encouraging employees to vote against the union;(b)     making statements that suggest employees may suffer negative consequences if they support the union;(c)     offering benefits, incentives or favourable treatment in connection with the secret ballot or union support;(d)     conducting meetings or discussions specifically to address the union or persuade employees on how they should vote; and(e)     positioning management personnel or representatives in a manner that may intimidate or influence employees approaching the polling station. Even where there is no intention to interfere, conduct that creates a perception of pressure or influence may expose the employer to allegations of interference. As a practical guide, employers should consider the following points in relation to any activity that will be carried out during the recognition process in order to determine whether the same would amount to interference or union-busting:(a)          Is the activity planned before the secret ballot?(b)          Is the activity consistent with past practice?(c)          Does the activity serve a legitimate business purpose?(d)           Is the activity unrelated to the union or the voting process?(e)           Are employees free to vote without obstruction or pressure?(f)           Can the employer produce documentary evidence to support its explanation and demonstrate the neutrality of the activity? The Company was represented in the Industrial Court by Partners, Shariffullah Majeed and Arissa Ahrom of Lee Hishammuddin Allen & Gledhill.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

YONG MENG YUEN v SYARIKAT TAKAFUL MALAYSIA BERHAD(Award No.: 261 of 2026)The ultimate objective of a business restructuring is to create a more agile and competitive organisation that is better positioned to respond to the demands of an increasingly dynamic business environment. A business ‘restructuring’ generally refers to a company’s organisational structure with the aim of improving operational efficiency, adapting to evolving market conditions, or addressing financial and operational challenges. The primary purpose of such a restructuring exercise is to enhance the organisation’s long-term sustainability and prospects for continued success.It is trite industrial relations jurisprudence that an employer has the inherent right to organise its business in the manner which it considers best. This means that employers have an implied right to restructure business operations, including to transfer or redesignate its employees, so long as the exercise is not actuated with improper motive. The courts will not interfere when such prerogatives are exercised in good faith for legitimate business reasons, unless it can be proven that such reorganisation was done mala fide or without a valid reason, or was actuated by motives of victimisation or unfair labour practice.The Claimant in this case held the position of Senior Manager, Project Management Office (“PMO”) Unit in the Company’s Information Technology (“IT”) Division. In June 2023, the Company restructured its IT Division for the purpose of operational and business efficacy. The PMO functions were placed under the IT Applications Department, headed by a Deputy General Manager. As a result, the Claimant’s reporting line changed from the Chief Technology Officer to the Deputy General Manager. A formal Notice of Restructuring & Change in Reporting Line was issued in July 2023 to the Claimant, enclosing an updated job description and the same was signed by the Claimant without any protest.Subsequently, the Claimant contended that the restructuring resulted in a demotion and reduction in his role, as his subordinates were removed and his responsibilities were reduced. According to him, the restructuring was also implemented without proper consultation or official announcement. The Claimant further alleged that the Company had ignored his grievances and attempted to pressure him to leave through a Mutual Separation Scheme (“MSS”). As a result, he asserted that the Company’s conduct amounted to a fundamental breach of his contract of employment, entitling him to treat himself as constructively dismissed.The Company denied that the Claimant had been dismissed and maintained that the restructuring was a legitimate exercise of managerial prerogative undertaken for operational efficiency. The Company emphasised that the restructuring affected not only the Claimant, but the entire PMO team and that the Claimant’s designation, salary, seniority, and employment benefits remained unchanged. Further, the MSS had only been offered to the Claimant after he himself asked that the Company consider offering the same to him.In dismissing the Claimant’s constructive dismissal claim, the Industrial Court applied the trite “contract test” which places the burden on the employee claiming constructive dismissal to prove that the employer had committed a fundamental breach going to the root of the employment contract. The Industrial Court, held among others, that:(a) The change in reporting line from the Chief Technology Officer to the Deputy General Manager did not constitute a breach of contract, particularly where the employment contract expressly permitted such changes.(b) The Claimant failed to prove that he had been placed in a reduced role, as the revised job description continued to require him to lead and manage projects.(c) The removal of subordinates did not amount to a fundamental breach as the Claimant was not contractually entitled to have subordinates reporting to him.(d)The Company’s restructuring exercise fell within its managerial prerogative, and there was no evidence of mala fide or victimisation.(e) The Claimant had also delayed more than two months before treating himself as constructively dismissed, which indicated that he had effectively accepted the restructuring. This decision reaffirms the principle that organisational restructuring and changes in reporting lines generally fall within an employer’s managerial prerogative, provided that such changes do not fundamentally alter the employee’s contractual terms or constitute mala fide conduct. It further reinforces the principle that a change in reporting line, without more, does not constitute a valid basis for constructive dismissal claims and the courts will not lightly interfere with bona fide restructuring exercises. Nevertheless, it remains crucial that employment contracts clearly articulate the employer’s managerial prerogatives, including the right to transfer, redesignate, restructure roles, and vary reporting lines, in order to minimise potential disputes arising from the exercise of such prerogatives. The Company was represented in the Industrial Court by partners Shariffullah Majeed, and Arissa Ahrom, of Lee Hishammuddin Allen & Gledhill.The Industrial Court Award may be found here.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

MOHAMAD ELMI BIN MD SAWAL v BAFCO ASIA SDN BHD(Kuala Lumpur High Court Civil Appeal No. WA-16A-6-01/2025)The High Court recently affirmed the Industrial Court’s findings in Award No.: 67 of 2025 (“Award”), among others, that employers may justifiably depart from certain requirements under the Code of Conduct for Industrial Harmony (“Code”) where exceptional circumstances exist, including serious threats to the safety of management personnel. Accordingly, the High Court dismissed the Appellant’s appeal against the Award.The matter arose from the retrenchment of employees by the Company pursuant to a global restructuring exercise during the COVID-19 pandemic. The Company had consistently suffered substantial losses since 2016, which were further exacerbated by the Movement Control Orders imposed during the pandemic. As part of its global restructuring exercise, the Company streamlined its operations and transitioned its business model from manufacturing and research & development (“R&D”) to supply chain management, resulting in the abolishment of multiple divisions and the retrenchment of 63 employees.A key issue before both the Industrial Court and the High Court was the Company’s failure to provide employees with early warning or prior consultation before the retrenchment exercise, as recommended under the Code. The Appellant contended that the retrenchment exercise was therefore not carried out bona fide. However, the Company’s position was that it had been unable to provide advance notice of the retrenchment exercise due to a series of anonymous emails containing threats against its Managing Director and his family. Evidence adduced during the proceedings before the Industrial Court showed that the threats were sufficiently serious that police reports had been lodged, and additional security personnel had to be deployed during the townhall conducted with employees prior to retrenchment notices being handed to the employees.The Industrial Court accepted the Company’s explanation and found that the threats justified the Company’s decision not to provide early notice of the retrenchment exercise. In affirming the Award, the High Court recognised that the Company’s concerns for the safety of its management and employees constituted a legitimate and compelling justification for deviating from the Code’s recommendation on prior consultation and early warning. Importantly, the High Court reaffirmed the established principle that the Code does not operate as a binding statute. While the Code remains the “gold standard” in assessing whether a retrenchment exercise had been carried out bona fide, strict compliance is not mandatory in every circumstance.This decision is particularly noteworthy as it underscores that the courts will adopt a practical and fact-sensitive approach when assessing compliance with the Code. While employers are generally expected to adhere to the Code’s recommended practices, the courts recognise that extraordinary circumstances, including genuine safety and security concerns arising from threats against management may justify deviations from those requirements without rendering an otherwise bona fide retrenchment exercise unlawful. The Company was represented before the Industrial Court and High Court by Partners Shariffullah Majeed and Arissa Ahrom of Lee Hishammuddin Allen & Gledhill.The Industrial Court Award may be found here.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

S.233(1)(a) of the Communications and Multimedia Act 1998:– Key Takeaways from Gov. of Malaysia v Heidy QuahINTRODUCTIONSection 233 of the Communications and Multimedia Act 1998 (“CMA”) is one of the primary legislative tools governing online conduct in Malaysia, regulating the improper use of network facilities, network services, and applications services. Section 233(1)(a), in particular, creates a criminal offence in the following terms:“(1) A person who —(a) by means of any network facilities or network service or applications service knowingly —(i) makes, creates or solicits; and(ii) initiates the transmission ofany comment, request, suggestion or other communication which is obscene, indecent, false, menacing or grossly offensive in character with intent to annoy, abuse, threaten or harass another person…commits an offence.”Despite its significance, the proper boundaries of this provision — and its relationship with the constitutional right to freedom of speech and expression under Article 10(1)(a) of the Federal Constitution (“FC“) — had never been definitively settled, until now.In a landmark judgment delivered on 6 February 2026, the Federal Court in The Government of Malaysia v Heidy Quah Gaik Li [2026] MLJU 384 comprehensively addressed that question. In the course of this article, we distil the key takeaways from that judgment as a concise guide to the interpretation and application of s.233(1)(a) CMA. THE GOVT OF MALAYSIA V HEIDY QUAHHeidy Quah, a human rights activist, uploaded a Facebook post in June 2020 drawing attention to the conditions at Malaysian immigration detention centres during the Covid-19 pandemic. In her post, she attributed the state of those conditions to inadequate health and safety precautions and cramped living conditions. What followed involved two sets of parallel proceedings:In July 2021, she was charged in the Sessions Court under s.233(1)(a) CMA for transmitting a communication that was “offensive in character with intent to annoy.” In April 2022, the Sessions Court granted her a Discharge Not Amounting to an Acquittal (“DNAA“), effectively bringing an end to the Sessions Court proceedings.Before the Sessions Court proceedings were resolved, Heidy Quah separately filed an originating summons in the High Court in August 2021, seeking to have the words “offensive” and “annoy” in s.233(1)(a) CMA declared unconstitutional. She ultimately succeeded before the Court of Appeal, which struck out both words for infringing the right to freedom of speech and expression under Article 10(1)(a) FC. It is to be noted that whilst the appeal before the Court of Appeal was pending, s.233(1)(a) CMA was amended by the Communications and Multimedia (Amendment) Act 2025, which came into force on 11 February 2025, substituting the word “offensive” with “grossly offensive.” The Court of Appeal took note of the amendment but declined to comment on the constitutionality of the amended term, confining its analysis to the pre-amendment position.On 6 February 2026, the Federal Court partially overturned the Court of Appeal’s decision, reinstating both words and holding that s.233(1)(a) CMA is constitutional. The Federal Court nevertheless affirmed that the prosecution against Heidy Quah was entirely unjustified and ought never to have been commenced.Whilst the judgment involves a detailed constitutional analysis — encompassing the interplay between Articles 4(1), 4(2) and 10 of the Federal Constitution and the limits of judicial review in the context of fundamental liberties — that analysis is beyond the scope of this article. What follows instead are the key takeaways on the proper interpretation and application of s.233(1)(a) CMA. Takeaway 1 — Freedom of Speech under Article 10 of the FC is not AbsoluteArticle 10(1)(a) FC guarantees every citizen the right to freedom of speech and expression. However, the Federal Court unequivocally affirmed that this right is not absolute — it carries inherent restrictions by definition. Communications whose dominant purpose is to cause harm or distress, hate speech, and communications that serve to attack the dignity of others fall outside the protection of Article 10(1)(a) FC entirely.Takeaway 2 –Section 233(1)(a) CMA Complements and Protects the Right to Free SpeechSection 233(1)(a) of the Communications and Multimedia Act 1998 targets harmful online conduct carried out with the intent to annoy, abuse, threaten, or harass. Far from curtailing free speech, the Federal Court held that s.233(1)(a) CMA operates to complement and protect the right guaranteed under Article 10(1)(a) FC — not restrict it. This reading is reinforced by s.3(3) CMA, which expressly prohibits internet censorship, making plain that the CMA was never intended to intrude upon the sphere of free speech. What falls outside the inherent boundaries of Article 10(1)(a) FC falls squarely within the prohibition under s.233(1)(a) CMA.Takeaway 3 — Two Critical ElementsThe Federal Court acknowledged that the natural language of s.233(1)(a) CMA is broad — and that without proper construction, this risks unwarranted prosecutions being brought against commonplace conduct. To address this, the Court applied the vagueness avoidance doctrine to read down s.233(1)(a) CMA by focusing on the mens rea element as its constitutional core, thereby narrowing the provision’s reach and setting the threshold for prosecution.That exercise produced authoritative guidance on the proper construction of the two constitutive elements of the offence — (a) the character of the communication and, most critically, (b) the intent of the sender — with the latter serving as the determinative element that must be clearly established before s.233(1)(a) CMA is engaged. Element 1—Character of the CommunicationThis is an objective assessment determined by reference to the content and context of the communication. The Court acknowledged that “grossly offensive” is broad by nature and that it would be untenable to define it exhaustively. The Court did however, identified the following categories as falling within its meaning in the context of the CMA:(a) Communications that are indecent or obscene — meaning material that is sexually degrading or that violates behavioural standards;(b) Communications that threaten harm, encourage crime or incite public disorder;(c) Knowingly false or malicious communications — meaning the deliberate spread of false or distorted information with the intent of causing annoyance, distress or anxiety.The Court further noted that in Malaysia’s plural, multiracial and multi-religious society, communications targeting racial or religious sensitivities or attacking the institution of the constitutional monarchy would equally fall within this limb.Whilst the Court’s analysis was confined to “grossly offensive,” it is reasonable to presume an objective and contextual analysis would apply equally to the remaining descriptors in s.233(1)(a), ie “obscene,” “indecent,” “false,” and “menacing”. Element 2—The Intent of the SenderWas the sender’s dominant purpose to cause actual emotional distress or psychological harm to the recipient? The mens rea of the offence lies in the sender’s intent — specifically, whether the communication was made with intent to annoy, abuse, threaten or harass. These are not to be read in isolation but collectively, as they together define the spectrum of harmful intent that section 233(1)(a) CMA is designed to capture.This intent must be the dominant purpose of the communication. Where a communication was made for a legitimate purpose — political discourse, public interest, education, satire, or the expression of opinion — the mens rea is absent and no offence is made out, however offensive the content may be to some. Intent cannot be inferred from the content alone. It must be clear, objective, and demonstrable from the surrounding circumstances. CLOSING OBSERVATIONSThe reinstatement of the words “offensive” and “annoy” in section 233(1)(a) CMA does not curtail the right to freedom of speech and expression. The Federal Court’s emphasis on mens rea ensures that the provision captures only communications made with the requisite intent to cause harm or distress. Genuine expression remains fully protected under Article 10(1)(a) FC and will not fall foul of section 233(1)(a) CMA.The Federal Court’s guidance is equally significant for applications service providers who, in the ordinary course of their operations, will inevitably encounter content flagged by regulators or their own users. The purposive interpretation established by the Federal Court provides a principled and workable framework for such providers to assess whether particular content crosses the threshold under section 233(1)(a) CMA, take the necessary steps to ensure their platforms remain safe and responsible, and cooperate effectively with regulators in the discharge of their obligations.Before we close, we note that the Federal Court has directed the Attorney General to issue prosecutorial guidelines on the threshold for charges under section 233(1)(a) CMA. Such guidelines, when published, will further assist in delineating the ambit of section 233(1)(a) CMA and provide greater clarity for practitioners, regulators, and applications service providers alike. We will revisit and supplement this article once those guidelines are available. OTHER STATUTORY PROVISIONSArticle 10 of the Federal Constitution – Freedom of speech, assembly and association(1) Subject to Clauses (2), (3), (3A) and (4) —a. every citizen has the right to freedom of speech and expression;…(2) Parliament may by law impose —a. on the rights conferred by paragraph (a) of Clause (1), such restrictions as it deems necessary or expedient in the interest of the security of the Federation or any part thereof, friendly relations with other countries, public order or morality and restrictions designed to protect the privileges of Parliament or of any Legislative Assembly or to provide against contempt of court, defamation, or incitement to any offence.”Section 3 of the CMA – Objects(3) Nothing in this act shall be construed as permitting censorship on the internet. If you have any queries, please contact Senior Associate Harvey Ng Yih Xiang ([email protected]) or his team Partner, G. Vijay Kumar ([email protected]).

The 2026 ICC Arbitration Rules (“2026 Rules”) take effect on 1 June 2026,[1] with a focus on enhancing efficiency, clarity and usability of ICC arbitration proceedings. Key Changes At A GlanceBelow are notable changes introduced by the 2026 Rules.New “Highly Expedited Arbitration” Procedure (HEAP) (Article 33 and Appendix VI). The most significant addition. Where parties agree to opt in,[2] a sole arbitrator[3] must issue the final award within 3 months of the initial case management conference.[4] The award may be issued without reasons if parties agree.[5] Speed is achieved by: (a) front-loading pleadings by merging the Request for Arbitration with the Statement of Claim, and the Answer with the Statement of Defence and Counterclaim,[6] (b) prohibiting joinder and consolidation,[7] (c) compressed time limits, and (d) giving the tribunal discretion to limit documents, submissions and witness / expert evidence.[8]Early Determination of Claims and Defences (Article 30). Any party may apply to the tribunal for early dismissal of claims or defences that are (a) “manifestly without merit”, or (b) “manifestly outside the tribunal’s jurisdiction”.[9] This allows the proceedings to focus on viable claims.Terms of Reference Eliminated. Previously required under Article 23 of the 2021 ICC Arbitration Rules (“2021 Rules”), Terms of Reference are no longer mandatory. The initial case management conference now serves as the central procedural milestone at the outset of an ICC arbitration.New Claims Post-Case Management Conference (Article 25). With the Terms of Reference eliminated, the cut-off milestone for filing new claims without tribunal authorisation is now the initial case management conference.Higher Threshold for Expedited Arbitration (Article 32 and Appendix V, Article 1(2)-1(3)). For arbitration agreements concluded on or after 1 June 2026, the expedited procedure applies automatically where the amount in dispute is USD 4 million or less.[10]Preliminary Orders by Emergency Arbitrator (Appendix IV, Article 7). A party may now request for an ex parte preliminary order directing another party not to frustrate the emergency measure application. The order is initially granted without notice, but the other party must be given a reasonable opportunity to be heard immediately after.[11]Clarification On Scope of Emergency Measures (Appendix IV, Article 1(2)). Emergency measures are no longer limited to signatories and their successors. They now extend to any party for which the ICC President is satisfied that a binding arbitration agreement may exist.[12]Refined Conflict Disclosure Regime (Article 12) –When in doubt, disclose (new). Any doubts about whether to disclose must be resolved in favour of disclosure.[13]Disclosure ≠ admission of conflict (new). Disclosure alone does not establish a lack of independence or impartiality.[14]Mandatory disclosure list (new). Each party must submit a list of persons and entities that arbitrators should consider for disclosure purposes, when parties file their Request, Answer, joinder-related submissions, or time extension request.[15]Express confidentiality obligation on arbitrators (new).[16]Default Digital Communications (Article 3). Written communications with the ICC Secretariat are now by email or other electronic means by default.[17]Flexible Time Limits (Article 4). Parties may now extend (not only reduce) time limits under the Rules.[18] Post-tribunal constitution, modifications of time limits require tribunal approval.[19] The ICC Court retains discretion to extend time limits where necessary for fulfilment of the tribunal’s and Court’s responsibilities.[20]Tailored Time Limit for Final Award (Article 34). The default 6-month deadline for the final award is removed. Instead, the President will fix a tailored time limit based on the procedural timetable, and any reasoned request from the tribunal.[21]Electronic Signing of Awards (Article 38(1)). Awards may now be signed electronically, in counterparts, and/or in hard copy or soft copy.Right to Reasons for ICC Court’s Decisions (Article 43). Upon request, the ICC Court will communicate its reasons for decisions. Requests must be made before the decision is issued, unless the decision concerns replacement of arbitrators under Article 16(3). This provision was previously in the Appendix and is now in the main body of the Rules.Hybrid Hearings Expressly Endorsed (Articles 19(3), 24(5), 27(1) and Appendix IV, Article 4(2)). Hearings, case management conferences, deliberations and emergency arbitrator meetings may take place in person, in hybrid form, or by videoconference / teleconference.Tribunal Secretary Appointments (Article 44). Appointments now require consultation with parties and a signed statement of acceptance, availability, impartiality and independence. Tribunal secretaries are held to the same standards as the tribunal. The appointment must not create any financial burden on the parties (save for reasonable, justified expenses), and direct fee arrangement between the tribunal and parties for the secretary are prohibited.[22]Third-Party Payment of Fees (Appendix III, Article 1(3)). The ICC will accept payment of arbitrators’ fees and administrative expenses by third parties, provided satisfactory evidence of a legal relationship between the payer and the relevant party is furnished.[23]Longer Period to Correct Awards (Article 39). The tribunal now has 45 days (up from 30 days under the 2021 Rules) to correct clerical, computational or typographical error on its own initiative.[24] Parties’ deadline to apply for corrections or interpretation of award remains at 30 days from receipt of the award.[25]Revised ICC Administrative Costs. ICC administrative costs are reduced for disputes below USD5,000,000. For disputes exceeding USD515,000,000, the flat-rate administrative cost increased to USD180,000[26] (up from USD150,000 under the 2021 Rules for disputes over USD500,000,000).[27] CONCLUSIONThe 2026 Rules represent a significant shift towards greater speed, digitalisation, and transparency in ICC arbitrations. Businesses with contracts containing ICC arbitration clauses should assess whether their current dispute resolution strategies align with the new framework and take steps, where necessary, to ensure they are well-positioned to benefit from these revisions.If you have any queries, please contact Partner, Lim Chee Yong ([email protected]), or his Associate, Stephanie Lim Shu Juin ([email protected]).This e-alert is for general information only and does not constitute legal advice. [1] https://iccwbo.org/dispute-resolution/dispute-resolution-services/arbitration/rules-procedure/2026-arbitration-rules/; 2026 ICC Arbitration Rules, Article 1(2).[2] 2026 ICC Arbitration Rules, Article 33.[3] 2026 ICC Arbitration Rules, Appendix VI, Article 4(1).[4] 2026 ICC Arbitration Rules, Appendix VI, Article 7(1).[5] 2026 ICC Arbitration Rules, Appendix VI, Article 7(2).[6] 2026 ICC Arbitration Rules, Appendix VI, Article 2.[7] 2026 ICC Arbitration Rules, Appendix VI, Article 3.[8] 2026 ICC Arbitration Rules, Appendix VI, Article 6(2).[9] 2026 ICC Arbitration Rules, Article 30(1).[10] 2026 ICC Arbitration Rules, Article 32 and Appendix V, Article 1(3).[11] 2026 ICC Arbitration Rules, Appendix IV, Article 7.[12] 2026 ICC Arbitration Rules, Appendix IV, Article 1(2)(c).[13] 2026 ICC Arbitration Rules, Article 12(2).[14] 2026 ICC Arbitration Rules, Article 12(4).[15] 2026 ICC Arbitration Rules, Article 12(5).[16] 2026 ICC Arbitration Rules, Article 12(8).[17] 2026 ICC Arbitration Rules, Article 3(1).[18] 2026 ICC Arbitration Rules, Article 4(2); 2021 ICC Arbitration Rules, Article 39(1).[19] 2026 ICC Arbitration Rules, Article 4(2).[20] 2026 ICC Arbitration Rules, Article 4(3).[21] 2026 ICC Arbitration Rules, Article 34(a); 2026 ICC Arbitration Rules, Article 34(b).[22] 2026 ICC Arbitration Rules, Appendix III, Article 7.[23] 2026 ICC Arbitration Rules, Appendix III, Article 1(3).[24] 2026 ICC Arbitration Rules, Article 39(1).[25] 2026 ICC Arbitration Rules, Article 39(2); 2021 ICC Arbitration Rules, Article 36(2).[26] 2026 ICC Arbitration Rules, Schedule of Fees, Article 5(1) and Article 6(1).[27] 2021 ICC Arbitration Rules, Appendix III, Article 3.

IntroductionUnder Malaysian company law, a company is a separate legal entity and is ordinarily the proper plaintiff to bring an action in respect of a wrong done to it. However, where those in control of the company are the alleged wrongdoers, the company cannot be expected to act against them.Section 347 of the Companies Act 2016 (“CA 2016”) addresses this gap by conferring standing on a Complainant under section 345 to apply for leave to bring a derivative action in the company’s name against those in control of the company for their wrongdoing committed against it.A key question then arises: what happens if the Complainant loses his standing after commencing the derivative action?This issue was recently considered in Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [Suit No. WA-24NCC-677-12/2023], where the Plaintiff, a director at the time he commenced the derivative action, was subsequently removed from the board, prompting the argument that he had lost standing to continue the action.In this article, we distil the High Court’s grounds of judgment in deciding whether a Complainant must maintain his locus standi throughout the derivative proceedings.An Overview of the Statutory Derivative Action(A) Who has Standing?To begin with, only persons who qualify as “Complainant” under section 345 of the CA 2016 may commence a derivative action:Any member or a person entitled to be registered as a member of the company;A former member, where the application relates to the circumstances of their ceasing to be a member;Any director of the company; orThe Registrar, in the case of a company declared under section 590.The limits of this requirement are strict. A person who falls outside these categories cannot invoke the statutory regime at all.This was made clear in the recent case of Ni, Ke v Chee Chern Chun [2026] 2 AMR 206, where the High Court held that the Plaintiff who was neither a registered shareholder nor a director of the company alleged to have been wronged, and whose connection to the company was purely indirect, lacked standing to sustain proceedings in respect of that company, whether under section 346 (oppression) or section 347 of the CA 2016.Justice Ahmad Shahri held that the Plaintiff who was neither a registered shareholder nor a director of the company alleged to have been wronged has no standing to sustain proceedings in respect of that company’s affairs, whether under section 346 (oppression) or section 347 of the CA 2016.(B) The Threshold: Leave of CourtThat said, leave of the Court is required before any derivative action may proceed. The applicable thresholds were elaborated upon by the Federal Court in Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd & Another Appeal [2024] 3 MLJ 433:30 days’ written notice to the directors, stating the Complainant’s intention to apply for leave of Court under section 347 (section 348(2));The application is made in good faith (section 348(4)(a)), namely:an honest belief that a good cause of action exists with reasonable prospect of success; and an honest belief that a good cause of action exists and has a reasonable prospect of success; andthe application for leave is not brought for a collateral purpose.The action is prima facie in the best interests of the company (section 348(4)(b)), having regard to, inter alia:Commercial financial gain, likelihood of recovery, costs, and the overall benefits to the company if the action proceeds.These requirements act as a filter to ensure that only qualified Complainants and genuine corporate wrongdoings are permitted to proceed under the statutory derivative action regime. What Happens if the Complainant Loses Standing After Commencing a Derivative Action?Recently, the issue of whether the Complainant must retain his standing throughout the derivative proceedings was determined in Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [Suit No. WA-24NCC-677-12/2023] (“Timor”).The Plaintiff was a nominee director appointed by the minority shareholder in a joint-venture company (the Defendant). He filed an application for leave to commence a derivative action on behalf of the company, alleging that the majority directors had caused the company to pay inflated operating expenses to a ship management company in which one of them held an interest.Following the filing of the leave application, the majority directors declared the Plaintiff’s office as director vacant (1st vacancy). Although that declaration was set aside by the Court in separate proceedings [WA-24NCC-102-02/2025], they later convened a fresh board meeting and again declared the Plaintiff’s office vacant. On this basis, the Defendant applied to strike out the leave application, contending that the Plaintiff was no longer a director and had therefore ceased to be a “Complainant” under section 345 of the CA 2016.The High Court dismissed the striking out application, holding that standing to bring an application under section 347 of the CA 2016 is retained so long as the Complainant possessed the capacity at the date of the application. A subsequent change in status does not render the leave application academic or a non-starter. The High Court’s grounds may be summarised as follows:(i) Statutory InterpretationSections 347, 348, and 350 of the CA 2016 do not require a Complainant to retain his qualifying capacity until an application for leave concludes. The statutory language is directed at who may initiate proceedings, not who must continuously maintain that status.This is reinforced by section 350(a) of the CA 2016, which allows the Court to authorise “the complainant or any other person” to control the conduct of the proceedings, indicating that the original Complainant need not necessarily remain in that same capacity. (ii) Policy Considerations under the Statutory Derivative Action RegimeThe Court’s interpretation that there is no continuing capacity requirement is supported by practical and policy considerations:Retrospective knowledge: Applications are based on knowledge accumulated while the Complainant held office. As the alleged wrongs would already have occurred, there is no logical basis to require that capacity to continue.Prevention of tactical removal: A continuing capacity requirement would allow the errant directors to defeat the derivative proceedings by removing the Complainant from office to deny standing.Shareholder Fluctuations: Requiring a shareholder to maintain status throughout the litigation would be impractical, as shares may be sold or bought out after the wrongdoing is discovered. (iii) Complainant as a Mere Procedural VehicleThe Complainant is merely the procedural vehicle through which the company’s rights are asserted, and the intended claim belongs to the company. Therefore, once the derivative application is properly commenced, the lis does not abate merely because the Complainant’s corporate status changes. (iv) Equitable ConsiderationsWhile equitable considerations do not determine standing under the statutory derivative action regime, the Court adopted a purposive interpretation of the statutory provisions to ensure that they are not applied in a way that enables alleged wrongdoers to defeat proceedings through the tactical removal of the Complainant. (v) Duties and Interests of Former DirectorsA former director may maintain a derivative action, and in any event, the Plaintiff is not to be treated as an outsider, given his position as nominee director of the minority shareholder. Any concerns as to the Plaintiff’s good faith are to be addressed at the leave stage, including the framing of appropriate orders for the conduct of the contemplated derivative action if leave is granted. ConclusionThe High Court’s decision in Timor represents a significant judicial clarification of the statutory derivative action regime under the CA 2016 – a properly commenced derivative action does not abate merely because the Complainant’s corporate status changes during the proceedings.This ensures that the statutory regime cannot be undermined by tactical removals, preserving its purpose of enabling the company’s rights to be vindicated where those in control are unwilling to act.

Recently, the Court of Appeal (“COA”) in Bellworth Developments Sdn. Bhd. (“Bellworth”) v Setiakon Builders Sdn. Bhd. (“Setiakon”) (Civil Appeals No. W-02(C)(A)-1212-07/2024 and W-02(C)(A)-1214-07/2024) referred to five sources in determining a Tribunal’s jurisdiction. The COA also reaffirmed the well-established position that an aggrieved party is not permitted to re-litigate the merits of the Award under the guise of a setting aside application under s. 37 of the Arbitration Act 2005 (“AA”).Additionally, the COA clarified that, under the 2018 Asian International Arbitration Centre (“AIAC”) Arbitration Rules (“2018 AIAC Rules”), the timeline for submission of the draft award for technical review commences on the date when the Tribunal declares the closure of proceedings, not the date when proceedings are closed. The COA further clarified that procedural timelines under the 2018 AIAC Rules for submission of the draft award are merely directory, not mandatory. Accordingly, non-compliance with the procedural timelines for submission of the draft award does not nullify or invalidate the award, nor does it strip the Tribunal of its jurisdiction.Factual BackgroundBellworth, the developer of a project comprising several serviced apartment blocks with podium facilities (“Project”), appointed Setiakon to carry out and complete the superstructure works for the Project (“Works”).[1] During the course of the Works, Setiakon submitted several extension of time (“EOT”) applications, which were only partially granted. Thereafter, the Architect issued a Certificate of Non-Completion (“CNC”), and Bellworth imposed liquidated and ascertained damages (“LAD”) against Setiakon.[2]Disputes arose between the parties in relation to, among others, the EOT certification, the validity of the CNC, and the LAD imposed. Setiakon contended, among others, that the CNC was invalidly issued on the basis that there were EOT applications pending the Architect’s determination at the time of its issuance. Setiakon referred the disputes to arbitration before a sole arbitrator (“Arbitrator”).[3] The arbitration was governed by the 2018 AIAC Rules.The Arbitrator, vide letter dated 28.2.2023, declared the arbitral proceedings to be closed as of 19.1.2023.[4] On 19.4.2023, the Arbitrator submitted the draft award to the AIAC for technical review pursuant to Rule 12(2) of the 2018 AIAC Rules. The final award was subsequently delivered (“Award”). Among others, the Arbitrator declared the CNC to be invalid and unlawful, and awarded Setiakon the sum of RM11,452,910.00 for unpaid work done, together with interest and costs.[5]Setiakon applied to the High Court (“HC”) to enforce the Award, whilst Bellworth applied to the HC to set aside the Award. The learned HC Judge dismissed the setting aside application and allowed the enforcement application.[6] Dissatisfied with the HC’s decision, Bellworth filed two appeals to the COA, both of which were dismissed on the following grounds. Ground 1: Rule 12(2) Of Part I Of The 2018 AIAC Rules Is Directory, Not MandatoryBellworth alleged that the Arbitrator failed to comply with Rule 12(2) of the 2018 AIAC Rules, as the draft award was submitted one day beyond the prescribed timeline. Bellworth contended that this non-compliance stripped the Arbitrator of his jurisdiction.For context, Rule 12(2) of Part I of the 2018 AIAC Rules provides –“The arbitral tribunal shall, before signing the award, submit its draft of the final award (the “Draft Final Award”), to the Director within three months for a technical review. The time limit shall start to run from the date when the arbitral tribunal declares the proceedings closed pursuant to Rule 12(1).”[7] [our emphasis]The COA held that, based on a literal interpretation of Rule 12(2) of Part I of the 2018 AIAC Rules, the time for submission of the draft award for the AIAC’s technical review starts to run on the “date when the arbitral tribunal declares” (i.e., 28.2.2023), and not the “date declared by the arbitral tribunal” (i. e., 19.1.2023). As such, the draft award submitted on 19.4.2023 was well within the 3-month timeline.[8]Alternatively, even assuming there was non-compliance with Rule 12(2) of the 2018 AIAC Rules, the COA held that the word “shall” therein “ought properly to be construed as directory rather than mandatory”. The COA reasoned that the provision is “administrative and procedural in nature”, particularly when read together with Article 32 of Part II of the 2018 AIAC Rules, which expressly provides for waiver in the event of non-compliance.[9] Furthermore, the COA observed that the 2018 AIAC Rules do not stipulate any sanctions for non-compliance or prescribe that an award delivered outside the prescribed period is null and void or unenforceable.[10]  Accordingly, the procedural timelines are “not intended to operate with rigid mandatory effect so as to invalidate the arbitral process in the absence of timely objection”.[11]On this note, the COA emphasised that procedural irregularities which do not occasion substantial injustice or prejudice ought not to defeat the substantive determination of disputes, particularly in arbitration where party autonomy and finality are fundamental considerations.[12] Ground 2: Architect’s 19.6.2015 Letter Not A “New Difference” As It Was Within The Scope Of Issues Submitted To ArbitrationBellworth further alleged that the Arbitrator had decided on a “new difference” that was not raised by the parties in the arbitration proceedings. Specifically, Bellworth contended that Setiakon’s case in the arbitration revolved solely around the Architect’s failure to fairly and properly assess Setiakon’s EOT entitlement, and not the legal consequences of the Architect’s letter dated 19.6.2015, which the Arbitrator relied upon in finding the CNC invalid.In assessing Bellworth’s complaint, the COA referred to the Singapore Court of Appeal’s (“SG COA”) findings in CJA v CIZ,[13] which set out a two-stage inquiry for determining whether an award should be set aside for excess of jurisdiction: (a) first, the court must identify what matters were within the scope of submission to the arbitral tribunal; and (b) second, whether the award involved such matters, or a new difference falling outside the submitted scope. In identifying what matters fell within the scope of submission, the COA referred to the SG COA case of CDM & Another v CDP,[14] which identified five sources: the parties’ pleadings, agreed list of issues, opening statements, evidence adduced, and closing submissions. This approach mirrors the COA’s earlier position in Hartela Contractors Ltd. v Hartecon JV Sdn Bhd & Anor.[15]Having reviewed the pleadings, oral and documentary evidence adduced, and the closing submissions in the arbitration, the COA found that there was no “new difference”, and that Bellworth was not deprived of the opportunity to address the issue. Rather, the COA found that Bellworth had failed at the material time to recognise and/or utilise the opportunity to fully advance its legal arguments. Accordingly, Bellworth “cannot now with the benefit of hindsight overcome its predicament in the guise that the Arbitrator embarked on a new difference”.[16] Ground 3: Setting Aside Under AA Limited To Supervisory Oversight, Excludes Appeal On The MeritsBellworth also contended that the Arbitrator’s reasoning in finding the CNC invalid was untenable on the grounds that it is illogical, inconsistent and/or defective.The COA found this to be an impermissible attempt by Bellworth to mount an appeal on the merits of the Award under the guise of a setting aside application.[17] In dismissing Bellworth’s contention, the COA reaffirmed the minimal curial intervention approach as reflected in the Federal Court cases of Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd,[18] Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal,[19] and Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor.[20] ConclusionThe COA’s decision underscores three practical points of significance for parties to arbitration. First, a tribunal’s jurisdiction is circumscribed by five sources: the parties’ pleadings, agreed list of issues, opening statements, evidence adduced, and closing submissions. Parties must therefore ensure that all issues are comprehensively pleaded and all arguments fully exhausted during the arbitration itself, or risk being precluded from raising them thereafter. Second, procedural timelines under the 2018 AIAC Rules for submission of the draft award are directory, not mandatory; non-compliance does not strip the Tribunal of its jurisdiction or invalidate the Award, particularly where no timely objection is raised and no prejudice is occasioned. Third, consistent with the principle of minimal curial intervention enshrined in the AA, setting aside applications remain a narrow and exceptional remedy. They are not, and must never be treated as, a vehicle to re-open or re-litigate the merits of an award.Our consultant, Dato’ Nitin Nadkarni was instructed as lead counsel at the Court of Appeal and successfully defended the Award obtained by Setiakon Builders Sdn. Bhd., with the assistance of Partner, Lim Chee Yong and Associate, Stephanie Lim Shu Juin.For queries, please contact Consultant, Dato’ Nitin Nadkarni ([email protected]), Partner, Lim Chee Yong ([email protected]), or Associate, Stephanie Lim Shu Juin ([email protected]). [1] Court of Appeal grounds of judgment at [6] and [7].[2] Court of Appeal grounds of judgment at [11] to [14].[3] Court of Appeal grounds of judgment at [18].[4] Court of Appeal grounds of judgment at [38].[5] Court of Appeal grounds of judgment at [19].[6] Court of Appeal grounds of judgment at [20] to [23].[7] Under the 2021, 2023 and 2026 iteration of the AIAC Rules, the corresponding provision for submission of the draft award for technical review stipulates that the time starts “from the date of the closure of proceedings” (our emphasis). Parties in arbitrations governed by the AIAC Rules should take note of this distinction.[8] Court of Appeal grounds of judgment at [41].[9] Court of Appeal grounds of judgment at [42].[10] Court of Appeal grounds of judgment at [45].[11] Court of Appeal grounds of judgment at [46].[12] Court of Appeal grounds of judgment at [48].[13] CJA v CIZ [2022] 2 SLR 557 at [37] – [38], [75] – [76].[14] CDM & Another v CDP [2021] 2 SLR 235 at [16], [18].[15] Hartela Contractors Ltd. v Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788 at [42].[16] Court of Appeal grounds of judgment at [61] – [62].[17] Court of Appeal grounds of judgment at [67].[18] Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 6 MLRA 61 at [54].[19] Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd and another appeal [2020] 6 MLRA 124 at [10].[20] Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413.

BackgroundThe tax treatment of Retail Money Market Funds (RMMFs) in Malaysia has undergone significant changes over the past decade, largely driven by the tax exemption granted to unit trust funds investing in money market instruments.  Historically, a non-individual investor deriving interest income directly from money market instruments would be subject to tax. However, where the same investment is made through a unit trust structure, the income may be exempt at the fund level, with distributions to investors correspondingly exempt.The introduction of Section 109DA of the Income Tax Act 1967 (ITA) in 2022 sought to address this disparity by imposing withholding tax on distributions from RMMFs to non-individual investors.  The central controversy that has since arisen concerns the determination of the amount on which withholding tax is properly chargeable under Section 109DA — namely, whether it is the gross distribution or the net distribution. The Inland Revenue Board (IRB) has issued Practice Note 1/2026[1] to publicly state its administrative position on the matter, following several audits of RMMFs.At the outset, it ought to be observed that Practice Note 1/2026 is not a Public Ruling issued pursuant to Section 138A of the ITA, nor does it constitute guidelines issued under Section 134A. It reflects the IRBM’s administrative position but does not itself amend the legislation or conclusively determine its proper interpretation. A taxpayer may therefore, after obtaining advice and having regard to the attendant audit and litigation risks, take a different position that it considers better supported by the statutory language and relevant authorities.IRB's PositionIn summary, Practice Note 1/2026 takes the position that withholding tax under Section 109DA of the ITA is to be imposed on the gross amount of income attributable to the unit holder, as reflected in Column (1) of the distribution statement, rather than the net amount actually distributed.The IRB's position appears to rest on the following grounds:Section 61(1A) of the ITA provides that a unit holder is to be assessed on an amount determined by reference to the unit holder's share of the total income of the unit trust fund that is distributed to the unit holder;the expression “total income” in Section 61(1A) is interpreted by the IRB as referring to the fund's gross income (in this context, interest income exempt under paragraph 35A of Schedule 6 to the ITA); andSection 109DA, read with Part XIX of Schedule 1 to the ITA, imposes withholding tax at the rate of 24% of the gross amount of interest income distributed by an RMMF to non-individual unit holders, notwithstanding the fund-level exemption under paragraph 35A of Schedule 6 to the ITA. Analysis and Our ViewAt the outset, it is necessary to identify the governing principles of statutory interpretation. It is well established that tax legislation is to be strictly construed. However, "strictly" in this context does not mean in favour of the revenue — it means strictly in accordance with the actual words of the statute, without extension or implication. Applying those principles, there are, in our view, reasonable grounds to question whether the IRB's position as set out in Practice Note 1/2026 is correct as a matter of law.1. First, a critical distinction may be drawn between income that is “attributable” to a unit holder and income that is “distributed” to that unit holder. Income attributable represents the unit holder's proportionate share of the fund's gross income. However, this is not necessarily the same as the amount available for distribution, as the fund necessarily incurs operating expenses in generating that income. Section 109DA expressly applies to income “distributed or credited”, and it is accordingly arguable that the relevant tax base ought to be the amount actually distributed, rather than the gross income attributable to the unit holder.2. Second, Section 61(1A) and Section 109DA may arguably be said to serve distinct functions and ought not to be conflated. Section 61(1A) governs the computation of income to be assessed in the hands of the unit holder, by reference to the fund's total income. Section 109DA, in contrast, governs the mechanism of withholding tax, which is triggered on amounts paid or credited to the investor. These provisions arguably operate at different stages of the tax framework, and it may not be appropriate to use the former to determine the tax base for the purposes of the latter.3. Third, the IRB's interpretation may produce an economic distortion that is arguably not consistent with legislative intent. Imposing withholding tax on the gross income attributable — rather than the net amount distributed — would result in taxation on amounts that the investor does not economically receive. This is further compounded by the fact that the investor is not entitled to claim a deduction for the underlying expenses incurred by the fund, as those expenses are not incurred by the investor directly. Consequently, the result may be an effective over-taxation of the investment return, which is arguably inconsistent with fundamental tax principles and may undermine neutrality between direct and indirect investment in money market instruments. Our ConclusionFor the reasons set out above, it is our view that there are reasonable grounds to question whether the IRB's interpretation of Section 109DA is correct as a matter of law.A more defensible interpretation, in our view, is that withholding tax under Section 109DA ought to apply to the amount actually distributed or credited to the investor, which is consistent with both the language of the provision and the general principles governing withholding tax regimes.The IRB's approach — which effectively subjects gross income attributable to the unit holder, rather than the net amount distributed, to withholding tax — may produce manifest economic distortions, and may be difficult to reconcile with the foundational principles of income tax law. There remain reasonable grounds for an alternative interpretation based on the statutory wording. Until judicial guidance is available, the appropriate withholding tax base under Section 109DA may remain a matter of legitimate controversy.Taxpayers who have deducted and remitted withholding tax on the gross attributable amount in reliance on Practice Note 1/2026 should be mindful that the Practice Note does not carry the force of law and that the correct legal position may ultimately be determined differently by the courts. Taxpayers who wish to adopt a position consistent with the analysis set out above should nonetheless be prepared for the possibility of an audit challenge by the IRB and are strongly advised to seek specific legal advice before doing so.This publication was co-authored by Jason Tan Jia Xin and Chris Toh Pei Roo of LHAG's Tax, Customs and Trade Practice Group, together with Mark Chan, Group Tax Leader of Folks DFK Group. [1] Practice Note No. 1/2026 ‘Explanation on Tax Treatment for Reporting Income Based on Profit Distribution Vouchers of Retail Money Market Funds’ (RMMF), accessible here: https://www.hasil.gov.my/wp-content/uploads/practice-note-no-1-2026-tax-treatment-for-reporting-income-based-on-profit-distribution-vouchers-of-rmmf.pdf

In a recent decision, the High Court in Chiong Kiau v Director General of Inland Revenue & 2 Other Cases quashed notices of additional assessment issued by the Inland Revenue Board (“IRB”) against three taxpayers in respect of alleged under-declared income.The decision is significant for taxpayers because it reaffirms a practical but important point: where the IRB rejects a taxpayer’s explanations and supporting documents during an audit, it must identify the specific concerns, explain the basis of its position, and give the taxpayer a meaningful opportunity to respond. It is not sufficient for the IRB to rely on broad assertions that transactions are “suspicious” or that documents are insufficient without explaining why.BackgroundThe Applicants were shareholders and directors of several companies in the oil palm and related businesses. They had received dividends from these companies which were exempt from tax in their hands under Section 127(1) of the Income Tax Act 1967 (“ITA”) read together with paragraph 12B of Schedule 6 to the ITA.During the audit, the Applicants submitted capital statements, dividend warrants and supporting documents to explain the source of the disputed receipts. However, the IRB rejected the explanations and proceeded to issue notices of additional assessment for the years of assessment 2018 to 2022. High Court’s DecisionThe High Court held that the IRB’s decision-making process was procedurally unfair and in breach of natural justice.A key point in the judgment was that the IRB had not identified the specific transactions which were allegedly objectionable, nor explained why the supporting documents provided by the taxpayer were inadequate. Instead, the IRB merely stated that the adjustments were based on “estimation”, that there were insufficient supporting documents, and later concluded that the transactions were “meragukan”.The Court held that this fell short of the standards expected of a statutory decision-maker exercising coercive powers under the ITA. Procedural fairness is not measured by the volume of correspondence exchanged. What matters is whether the taxpayer was given a genuine opportunity to understand and answer the case against him. On the facts, the taxpayer had repeatedly sought clarification and expressed his willingness to provide further documents, but the IRB proceeded to issue the assessments without identifying the specific matters requiring explanation.The High Court also held that the IRB cannot, through an administrative assessment, bring exempt income back within the tax net. Where Parliament has expressly exempted a category of income from tax, the IRB has no jurisdiction to assess that income as taxable. In this case, if the receipts were indeed single-tier dividends falling within paragraph 12B of Schedule 6 to the ITA, the exemption operated as a matter of law.Accordingly, the High Court quashed the notices of additional assessment and granted declarations, among others, that the IRB is required to comply with procedural fairness when exercising its statutory powers under the ITA, including the duty to provide adequate reasons and to afford affected taxpayers a meaningful right to be heard. Why This Matters to TaxpayersThis decision is a useful reminder that a tax audit should not be a guessing game.Where the IRB takes issue with a taxpayer’s explanation, the taxpayer should be told, with sufficient clarity, what the alleged issue is. A taxpayer cannot meaningfully respond if the IRB does not identify the specific transactions in dispute, the alleged deficiencies in the documents provided, or the basis on which the IRB proposes to make an adjustment.For taxpayers undergoing an audit, the decision highlights the importance of:maintaining proper supporting documents;submitting explanations and documents in writing;requesting the IRB’s reasons where explanations or documents are rejected;asking the IRB to identify the specific transactions or issues in dispute; andkeeping a clear record of all audit correspondence. This decision affirms that when exercising audit and assessment powers, the IRB must engage with the taxpayer’s explanations in substance, not merely in form. LHAG CommentsThe decision is a timely affirmation that procedural fairness remains an important safeguard in tax administration. The IRB is not prevented from conducting audits or raising assessments where justified. However, where serious adverse consequences are imposed on a taxpayer, the decision-making process must be fair, reasoned and grounded in the material before the authority.In practical terms, taxpayers should not be left to guess the basis of an assessment. If the IRB considers a transaction to be suspicious, unsupported or taxable, it should say why. A broad statement that documents are insufficient, without more, may not be enough.The decision is also a reminder that judicial review remains available in appropriate tax cases. While taxpayers are ordinarily expected to pursue the statutory appeal route, judicial review may be invoked where the complaint concerns the legality of the IRB’s decision-making process, such as breach of natural justice, lack of jurisdiction, error of law or irrationality.The Grounds of Judgment are accessible here.The taxpayers were successfully represented by our Consultant, Dato’ Nitin Nadkarni, our Partner, Jason Tan Jia Xin, and our Senior Associate, Jay Fong Jia Sheng.If you have any queries, please contact Dato’ Nitin Nadkarni ([email protected]), Jason Tan Jia Xin ([email protected]), or Jay Fong Jia Sheng ([email protected]).

Lee Hishammuddin Allen & Gledhill is pleased to announce our continued recognition in the Chambers Asia-Pacific 2026 Rankings. We are delighted to be ranked in 11 Practice Areas, with 19 of our lawyers acknowledged as leading individuals in Malaysia, including an improvement in our Projects, Infrastructure & Energy practice, which has advanced from Band 3 in 2025 to Band 2.Practice Area RankingsBand 1ConstructionDispute ResolutionEmployment & Industrial RelationsBand 2Banking & Finance: Debt Capital MarketProjects, Infrastructure & EnergyReal EstateTaxBand 3Banking & FinanceCorporate/M&ATechnology, Media, Telecoms (TMT)Band 4Intellectual PropertyLHAG also congratulates our lawyers who have been individually recognised and ranked by Chambers Asia-Pacific:Banking & FinanceMegat Hizaini Hassan – Band 3 | Spotlight (Islamic Finance)ConstructionDato’ Nitin Nadkarni – Band 1Steven SY Tee – Band 3Darshendev Singh – Band 4Crystal Wong Wai Chin – Band 4Corporate/M&ATay Weng Hwee – Band 4Dispute ResolutionLambert Rasa-Ratnam – Band 2Andrew Chiew Ean Vooi – Band 3Sean Yeow Huang-Meng – Band 4Kumar Kanagasingam – Band 5G. Vijay Kumar – Band 5Employment & Industrial RelationsLim Heng Seng – Eminent PractitionerShariffullah Majeed – Band 3Amardeep Singh Toor – Band 3Intellectual PropertyChng Keng Lung – Band 4Projects, Infrastructure & EnergySteven SY Tee – Band 2Crystal Wong Wai Chin – Up and ComingReal EstateTay Weng Hwee – Band 3Bella Chu Chai Yee – Band 3TaxDato’ Nitin Nadkarni – Band 3Jason Tan Jia Xin – Band 4Chris Toh Pei Roo – Up and Coming Ivy Ling – Up and ComingThe firm conveys its sincere appreciation to LHAG’s staff, lawyers and clients whose ceaseless support has been instrumental in securing this achievement. As LHAG continues to grow, it remains committed to legal excellence and integrity, propelled by this year’s celebrated work.

It is our great pleasure to announce that Chambers High Net Worth 2026 Guide has ranked Lee Hishammuddin Allen & Gledhill’s Successions, Trusts, Estate Planning & Private Wealth practice “Band 2” for Private Wealth Law (Malaysia).Published annually, Chambers High Net Worth identifies and ranks the world’s leading law firms, lawyers, and professional advisers to high net worth and ultra-high net worth individuals. Their independent assessment of LHAG’s Private Wealth practice notes “expertise in high-value real estate transactions, family business advisory and philanthropy planning for ultra high net worth clients.”Congratulations to the team for their rankings, and a thank you to our clients for their continuing support.

KESATUAN PEKERJA-PEKERJA EXXONMOBIL EXPLORATION AND PRODUCTION MALAYSIA INCORPORATED v EXXONMOBIL EXPLORATION AND PRODUCTION MALAYSIA INC.(Award No.: 116 of 2026)A collective agreement which has been taken cognizance of by the Industrial Court is deemed to be an award and shall be binding on the parties to the agreement[1]. This means that all the terms set out in the collective agreement, including any grievance or dispute resolution procedures, must be complied with as agreed between the parties to the collective agreement. In the instant case, the Industrial Court via Award No. 116 of 2026 handed down on 14 January 2026 unanimously dismissed the Union’s complaint of the Company’s alleged non-compliance with a provision of the Collective Agreements pursuant to section 56 of the Industrial Relations Act 1967[2] (“IRA 1967”). According to the Union, the Company had failed to pay satellite allowances to its offshore assigned employees (“OAEs”) who were assigned to work on the Company’s offshore platforms, namely Tapis A from 2014 to 2023 and Tapis C from 2014 to 2025. The Company, however, argued that the OAEs were not entitled to satellite allowances as Tapis A & Tapis C were in fact, not satellite platforms. Further, the OAEs were well aware that Tapis A & Tapis C were not satellite platforms as the issue of their entitlement to satellite allowances purportedly owed to them for a period of 10 years was only suddenly raised via the Union President’s email in February 2024. The Union’s awareness that Tapis A & Tapis C were not satellite platforms is also demonstrated by the fact that this issue was never raised as a grievance in line with the Grievance Procedure under the Collective Agreement.[1]  Section 17 (1) (a) & (b) of the Industrial Relations Act 1967[2] Collective Agreement (2016 – 2019) Cognizance No.: 260/2016; Collective Agreement (2019 – 2022) Cognizance No.: 170/2019; and Collective Agreement (2022 – 2025) Cognizance No.: 288/2022In dismissing the Union’s complaint, the Industrial Court found that the Collective Agreements set out an internal grievance procedure mutually agreed upon by parties under Article 66 to Article 71 and held among others, as follows:(a)     Article 66 clearly required employees to first exhaust the step-by-step internal grievance procedure before initiating court proceedings. As the Union had failed to comply with the mutually agreed grievance procedures, their complaint was premature.(b)     In light of the serious disputes of facts as to whether Tapis A and Tapis C are satellite platforms, a complaint of non-compliance under section 56 of the IRA 1967 is not the appropriate course of action.This decision affirms that the Industrial Court will not entertain premature complaints that bypass internal grievance mechanisms, particularly where serious factual disputes exist. The inclusion of grievance procedures in collective agreements reflects parties’ mutual understanding regarding the value and importance of a full and open discussion in resolving misunderstandings and maintaining industrial harmony. Thus, having developed a mutually agreed process in a collective agreement, it is not up to either party to bypass the same at any stage. It is therefore of utmost importance that collective agreements contain robust detailed grievance procedures in anticipation of any disputes. The Company was represented in the Industrial Court by partners Shariffullah Majeed, and Arissa Ahrom, of Lee Hishammuddin Allen & Gledhill.The Industrial Court Award may be found here.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

We are pleased to share that lawyers from Lee Hishammuddin Allen & Gledhill have contributed to the recently published Bullen & Leake & Jacob’s Malaysian Precedents of Pleadings, Fourth Edition.The publication provides practical guidance and precedents across a wide range of Malaysian civil proceedings.Our contributors are:Hoi Jack S’ng, who contributed to the chapters on Banking (Chapter 4) and Defamation (Chapter 11);Teo Wai Sum and Nurizzati Kafiya Sidek, who co-authored the chapter on Data Protection (Chapter 31) with The Hon. Justice Adlin Abdul Majid, Judge of the High Court of Malaya; andChris Toh Pei Roo, Jay Fong Jia Sheng and Joanne Soon Jia Ying, who contributed to the chapter on Taxation (Chapter 41). The chapters combine an overview of the relevant Malaysian law with practical precedents and materials for use by legal practitioners.We congratulate all our contributors on their involvement in this important Malaysian legal reference work. 13 August 2026

Lee Hishammuddin Allen & Gledhill is delighted to announce our recognition in the IP Stars 2026 Rankings. Published by Managing IP, this leading global guide highlights top-tier intellectual property practices and outstanding professionals across more than 80 jurisdictions worldwide.Our Intellectual Property & Innovative Technology practice continues to cement its position in core areas of IP law, earning key rankings for both Trademark Disputes and Copyright & Related Rights.Further anchoring this achievement, Partner Chng Keng Lung has been named a Trademark Star 2026 in recognition of his strong track record in contentious intellectual property matters.LHAG wishes to thank our clients for their invaluable support and continued trust in the firm.

MOHD ZAKI MOHAMAD v PERODUA SALES SDN BHD(Kes Saman Ketua Pengarah Tenaga Kerja No.: KBR/10301/2025/0355) A Key Performance Indicator (KPI) is a measurable value used to assess how effectively an individual, department, or organisation is achieving its objectives. Properly designed KPIs help align employee efforts with organisational goals while promoting accountability and transparency. Most employers do not set out detailed KPIs in the employment contract itself. Instead, the contract typically contains clauses such as:“The Employee shall meet such performance targets and key performance indicators as may be determined by the Company from time to time."This approach provides flexibility for the employer to revise targets annually without having to amend the employment contract. However, there are certain roles where KPIs are clearly spelt out in the employment contract itself. The most common examples are sales executives where specific numerical targets are frequently incorporated directly into employment contracts because commissions and bonuses depend upon them. Under industrial jurisprudence, failure to achieve KPIs is generally treated as poor performance, not misconduct.Misconduct requires some element of blameworthy, wilful, dishonest, or improper conduct. In view of this, does this mean employee who are dismissed because of inability to fulfil their KPIs, would be entitled to termination benefits under the Employment Act 1955 (“EA 1955”)? The provision of termination benefits under the EA 1955 serves as a cushion against the hardships faced by an employee who has to contend with the loss of his / her employment and the consequential loss of his / her immediate means to earn an income.Regulation 4 (1) of the Employment (Termination and Lay-Off Benefits) Regulations 1980 (“Regulations”) provides that an employee shall be entitled to termination benefits where his / her employment contract is terminated “for any reason whatsoever” except: (a)   where the employee has reached the retirement age specified in the contract; or(b)   the employment is terminated due to misconduct following a proper inquiry; or(c)   the employee voluntarily resigns unless the resignation falls within the relevant provisions of the EA 1955. Since Regulation 4 (1) does not explicitly exclude poor performing employees from being entitled to termination benefits, can inefficiency / poor performance be classified under the heading of ‘misconduct’? This issue often arises when such dismissed employees claim for termination benefits through complaints at the Labour Court. There are 2 school of thoughts on this matter. The first school of thought draws a clear distinction between poor performance and misconduct. In TAH POH THIAM v INDUSTRIAL COURT OF MALAYSIA & DAILY FRESH SDN BHD [2015] 1 LNS 1534, the Court of Appeal held that poor performance, negligence, or inefficiency cannot automatically be equated with misconduct. Rather, misconduct requires a higher threshold, and the two concepts must be kept conceptually distinct.On the other hand, the second school of thought recognises that persistent poor performance may, in certain circumstances, amount to misconduct. In MOHD HILMI ALHAM v BERMAZ MOTOR TRADING SDN BHD [2020] ILRU 0393, the Industrial Court held that culpable incompetence or inefficiency, particularly where it stems from negligence, carelessness, or unwillingness to perform duties may constitute misconduct justifying dismissal. This position was further reinforced by the Shah Alam High Court in NXP MALAYSIA SDN BHD v NURSHAKILA SAHLAN [2026] 7 MLJ 546, where it was held that persistent poor performance, after warnings and opportunities to improve, could amount to misconduct.Accordingly, the High Court held that the Labour Court had erred in awarding termination benefits to the employee who was terminated on the grounds of poor performance. Against this backdrop, the Labour Court in MOHD ZAKI MOHAMAD v PERODUA SALES SDN BHD was once again called upon to determine whether an employee dismissed for persistent poor performance was entitled to termination benefits. The Complainant, a Sales Advisor, claimed termination benefits amounting to RM79,561-00 following his dismissal from the Company on the grounds of his poor performance.Pursuant to the terms of his employment contract, the Complainant was required to achieve a monthly sales target but consistently failed to do so despite being placed on a Performance Improvement Plan (“PIP”) for 5 months. Throughout the PIP, he was given multiple counselling sessions, guidance on improving sales, and coaching from his direct supervisor. He also received several warnings and three show-cause letters requiring him to explain his continued failure to meet the required sales targets. Nonetheless, he failed to benefit from the numerous warnings, coaching sessions, and opportunities provided throughout the PIP and his performance remained below the required standard.The Labour Court found that the Complainant’s persistent failure to fulfil his contractual performance obligations, despite repeated interventions and opportunities to improve, constituted culpable inefficiency amounting to misconduct. This is consistent with the principle articulated in PLAAT RUBBER SDN BHD v GOH CHOK GUAN [1995] 1 ILR 79, where it was held that any breach of an express or implied duty on the part of the employee, unless of a trifling nature, may amount to misconduct. Therefore, he was not entitled to termination benefits under Regulation 4 (1) of the Regulations.This case demonstrates the importance of incorporating clear and measurable KPIs into employment contracts, particularly for performance-driven roles such as sales advisors. Where such KPIs are expressly stipulated as contractual obligations, an unjustified failure by the employee to achieve them amounts to a breach of the express terms of employment, thus exempting the employee’s entitlement to termination benefits under Regulation 4 (1) of the Regulations. The Company was represented in the Labour Court by partners, Shariffullah Majeed and Arissa Ahrom, of Lee Hishammuddin Allen & Gledhill.If you have any queries, please contact Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

We are pleased to announce that Lee Hishammuddin Allen & Gledhill and Shan Chambers are merging.This merger brings together LHAG and Shan Chambers, the latter being a boutique litigation practice ranked with leading legal directories including Legal 500 Asia Pacific, Chambers & Partners and asialaw, to broaden capacity and strengthen our combined ability to handle complex dispute resolution matters.The merger is expected to be seamless, with Shan Chambers to be fully integrated by 23 February 2026.We look forward to this new chapter and working together. For SM Shanmugam, this marks a homecoming to LHAG, the firm where he spent two decades and, in many ways, has always remained.6 February 2026

Lee Hishammuddin Allen & Gledhill is delighted to announce the promotion of six Associates to Senior Associates, effective 1 January 2026. Their dedication, talent, and energy have made a meaningful impact at LHAG, and this promotion recognises their contributions and commitment to excellence.We look forward to their continued growth and the important role they will play in supporting our clients and driving the Firm’s ongoing success.Chew Sue Peng – Dispute Resolution I Restructuring and InsolvencySue works with Partner Mong Chung Seng in the Firm’s Restructuring and Insolvency Practice Group.Sue has extensive experience in contentious winding-up proceedings and regularly acts for liquidators in a wide range of disputes such as termination of winding-up proceedings and challenges to liquidators’ conduct and duties. Sue also has experience in banking and finance litigation, including recovery and enforcement proceedings, as well as contractual disputes. She regularly appears before all tiers of the Malaysian Courts in the conduct of trials, hearings, and appeals.Sue is a contributor to Malaysian Civil Procedure (White Book) (Sweet & Maxwell Asia, 2024) and Restructuring and Insolvency: A Commentary (2023).She read law at the University of Manchester and was called to the Bar of England and Wales in 2020, before being admitted as an Advocate and Solicitor of the High Court of Malaya in 2021.Colin Yoong Shern Zian – Corporate & Commercial Disputes | Commercial ArbitrationColin works with Partner Andrew Chiew Ean Vooi on a wide range of complex corporate and commercial disputes. He regularly acts for major financial institutions, government-linked companies and prominent private individuals.His practice focuses on civil fraud, banking litigation, shareholder and governance disputes, moneylending matters and commercial arbitration. He has experience appearing at all levels of the Malaysian Courts, as well as in both international and domestic arbitrations.Colin is also a contributor to Restructuring and Insolvency: A Commentary (Sweet & Maxwell, Thomson Reuters, 2023).Colin read law at the University of Bristol. He was called to the Bar of England and Wales in 2020, and admitted as an Advocate and Solicitor of the High Court of Malaya in 2021.Lim Jun Xian – Banking & Insolvency | Corporate and Commercial Disputes | Capital Markets & Securities Law  Jun Xian is a Senior Associate in the firm’s highly ranked Dispute Resolution Practice, specialising in banking and insolvency law as well as corporate and commercial disputes. He works with Partners, Lambert Rasa-Ratnam and Chia Oh Sheng in advising and representing clients in complex commercial disputes and arbitration. He regularly advises regulatory bodies on matters concerning administrative law, capital markets and securities law, and the recovery of penalties.Jun Xian further advises Chinese state-owned enterprises and local SMEs on matters involving debt recovery, insolvency, as well as corporate and commercial disputes. Proficient in spoken and written Mandarin, as well as Hokkien and Cantonese, he works directly with Mandarin-speaking clients and regularly provides clear, practical legal advice in Mandarin. He also liaises closely with lawyers from PRC law firms to assist clients on cross-border enforcement matters involving Malaysia.He is a contributor to the Bullen & Leake & Jacobs’s Malaysian Precedents of Pleadings 3rd Edition (Thomson Reuters) and Malaysian Civil Procedure (White Book) 2024 Edition.Jun Xian graduated with an LLB (Hons) from the University of London and was admitted as a Barrister-at-Law (Lincoln’s Inn) in 2020. He was subsequently admitted as an Advocate and Solicitor of the High Court of Malaya in November 2021.Michelle Louis – Banking & Insolvency Michelle Louis works with Partners, Kumar Kanagasingam and Wong Han Wey in the Firm’s Dispute Resolution Practice Group. Her practice focuses on banking, insolvency and financial services disputes. She also regularly represents financial institutions, government-linked entities and statutory bodies in complex recovery actions, lender liability disputes, insolvency proceedings and high-value commercial litigation at both trial and appellate levels.Michelle is a contributor to Malaysia Civil Procedure (2024) published by Sweet and Maxwell.She read law at the University of Liverpool and was called to the Bar of England and Wales by the Honourable Society of Middle Temple in 2019. She was subsequently admitted as an Advocate and Solicitor of the High Court of Malaya in 2020.Preveena Ravindra Kumar – Real Estate Disputes Preveena works with Partner Ho Ai Ting on complex real estate and land-related disputes, with particular expertise in compulsory land acquisition. She regularly acts for affected landowners, acquiring agencies, and paymasters in complex and high-value disputes, and also has experience handling commercial litigation for prominent developers. Her corporate litigation experience includes debt recovery, having represented both creditors and debtors across all stages of the recovery process.In terms of publications, Preveena updated Sections 221 to 240 of the National Land Code in Issue 80 of the Annotated Statutes of Malaysia, and more recently contributed to the update of the Distress chapter in Halsbury’s Laws of Malaysia.Preveena read law at the University of Leeds and was called to the Bar of England and Wales (Middle Temple) in 2019. She was subsequently admitted as an Advocate and Solicitor of the High Court of Malaya in 2020.Wong Lien Taa – Employment & Industrial RelationsLien Taa works with Partner, Amardeep Singh Toor, specialising in employment, industrial relations, and immigration law, encompassing both litigation and advisory matters.He regularly appears before the Industrial Court defending employers in unjust dismissal and trade dispute claims, and represents multinational institutions in the Industrial Court and the High Court in claims brought by former senior management. He also has extensive experience in trade union litigation, including complex trade disputes.His advisory practice covers all areas of employment and industrial relations law, including retrenchment and reorganisation exercises, transfers, senior management restructuring, voluntary and mutual separation schemes, misconduct and disciplinary proceedings, determination of employment relationships, performance management, and the review and development of employment documentation and policies. He further advises corporate clients on Malaysian immigration laws, the management of foreign workers and expatriates, and employment-related tax matters.Lien Taa has contributed to the Industrial Law Reports published by The Malaysian Current Law Journal on issues relating to compulsory COVID-19 vaccination in the workplace. He has also been recognised in Benchmark Litigation for his detailed and thorough approach in preparing court matters.He read law at the University of Bristol, was called to the Bar of England and Wales in 2020, and was admitted as an Advocate and Solicitor of the High Court of Malaya in 2021.7 January 2026

Lee Hishammuddin Allen & Gledhill is pleased to announce that the firm has received seven recognitions at the Benchmark Litigation Asia-Pacific Awards 2026 held in Beijing on 2 July 2026.The firm was named “Malaysia Firm of the Year” under both the Jurisdictional Awards and Client Choice Awards categories. In addition, the firm received the following accolades:PRACTICE AREA FIRM AWARDSConstruction Firm of the YearEDITOR’S CHOICE AWARDSClient Excellence Firm of the Year The firm is also delighted to congratulate its lawyers on their individual recognitions: JURISDICTIONAL AWARDSMalaysia Lawyer of the Year: Lambert Rasa-RatnamCLIENT CHOICE AWARDSMalaysia Lawyer of the Year: Amardeep Singh ToorMALAYSIA TOP 40 UNDER 40 Chia Oh Sheng These recognitions reflect the continued trust of our valued clients. We extend our sincere appreciation to them for their invaluable support, as well as to our team for their unwavering dedication.

Pioneer Rich (Malaysia) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri[1] On 14 July 2026, the Kuala Lumpur High Court (High Court) granted Pioneer Rich (Malaysia) Sdn Bhd (Taxpayer) leave to commence judicial review against income tax assessments and penalties totalling RM36,280,781.67. The Court also granted an interim stay pending disposal of the inter partes stay hearing. The High Court has made available grounds of judgment which can be viewed here.The decision at this stage does not determine the merits of the judicial review. It confirms that the following questions of law are sufficiently arguable to proceed to substantive determination: Can tax be imposed where the taxpayer says no income was received? The taxpayer contended that it did not receive income from the relevant trading activities and that the Revenue had therefore imposed income tax on income that did not exist, contrary to Section 3 of the Income Tax Act 1967 (ITA). In support of that position, the taxpayer relied on its audited reports and financial statements for the disputed YAs. The Court held that the challenge raised an important question of law suitable for determination in judicial review. Must an income-estimation method have a legal basis under the ITA? The Revenue had applied a gross profit margin method to estimate the taxpayer’s income. The taxpayer challenged whether that methodology was provided for or authorised by the ITA. The Court accepted that the legal basis for the methodology was an arguable question of law. Must reasons be given for a time-barred assessment and penalties? The challenge also concerned the assessment for YA 2019, which the taxpayer contended was time-barred, and penalties imposed under sections 112(3) and 113(2) of the ITA. The Court considered it arguable that the Revenue was required to justify the exercise of its discretion and give sufficient reasons for the assessment and penalties. Form Q: A Prudent Parallel Step The Court also rejected the contention that filing a Form Q made the judicial review an abuse of process. Filing a Form Q is a requirement under Section 99 of the ITA if the taxpayer decides to proceed with an appeal. The Form Q had been filed as a matter of prudence to preserve the taxpayer’s statutory right of appeal in the event that leave for judicial review was refused. It was not filed to give the taxpayer to have a “second bite of the cherry” or to permit litigation in instalments. The distinction is important. The judicial review concerns the legality of the Revenue’s conduct and the proper interpretation of the ITA. The Form Q preserves the taxpayer’s statutory route to contest the amount of tax and penalties before the Special Commissioners of Income Tax (SCIT). However, any determination by the superior courts in judicial review proceedings on the interpretation of the relevant provisions would bind the parties. A final decision would give rise to the application of the doctrines of res judicata and issue estoppel. The possibility of an unsuccessful party in judicial review seeking to relitigate the same issues afresh before the SCIT does not arise. Key Takeaway The availability—and even the filing—of a Form Q appeal does not, by itself, bar judicial review where the challenge raises genuine questions of law going to the legality of the Revenue’s decision, rather than merely a dispute over quantum. Filing Form Q may nevertheless be prudent to preserve the statutory appeal route. The High Court granted leave on the low threshold applicable at the leave stage. The substantive questions remain to be determined. The taxpayer was successfully represented at the leave stage by Chris Toh Pei Roo of Lee Hishammuddin Allen & Gledhill’s Tax, Customs & Trade Practice, who appeared as counsel instructed by Messrs. Jack & Cheng. He was assisted by Alvin Chong Jian Loong of LHAG and appeared together with Ng Jack Ming of Messrs. Jack & Cheng. For inquiries regarding tax assessments issued by the Director General of Inland Revenue (DGIR), judicial review of tax decisions, or related tax disputes, please contact the Team Partners at [email protected]. [1] WA-25-13-01/2026

Lee Hishammuddin Allen & Gledhill has been ranked in 10 core practice areas by The Legal 500 (Legalese) in its Asia-Pacific 2026 edition. The firm also recorded an increase in recognised “Leading Partners”, with 14 lawyers acknowledged compared to 13 in the previous year.Dispute Resolution, Labour and Employment, Projects and Energy, Real Estate and Construction and Tax demonstrate a strong performance, securing their Tier 1 rankings.Meanwhile, Banking and Finance (including Islamic Finance), Capital Markets, Corporate and M&A, Intellectual Property, and TMT also continue to be recognised.Our lawyers have been ranked in the following categories:Dispute ResolutionLambert Rasa–Ratnam – Hall of FameKumar Kanagasingam – Leading PartnerDato’ Nitin Nadkarni (Consultant) – Leading PartnerSean Yeow Huang-Meng – Leading PartnerAndrew Chiew Ean Vooi – Leading PartnerG. Vijay Kumar – Leading PartnerMong Chung Seng – Next Generation PartnerChia Oh Sheng – Leading PartnerLabour and EmploymentLim Heng Seng (Consultant) – Hall of FameShariffullah Majeed – Leading PartnerTan Hooi Ping – Next Generation PartnerAmardeep Singh Toor – Next Generation PartnerProjects and EnergySteven SY Tee – Leading PartnerCrystal Wong Wai Chin – Leading PartnerJoyce Ong Kar Yee – Next Generation PartnerReal Estate and ConstructionTay Weng Hwee – Hall of FameDato’ Nitin Nadkarni (Consultant) – Leading PartnerBella Chu Chai Yee – Leading PartnerDarshendev Singh – Next Generation PartnerTaxDato’ Nitin Nadkarni (Consultant) – Leading PartnerJason Tan Jia Xin – Leading PartnerIvy Ling Yieng Ping – Next Generation PartnerBanking and Finance (Including Islamic Finance)Megat Hizaini Hassan – Leading PartnerCapital MarketsMegat Hizaini Hassan – Leading PartnerTay Weng Hwee – Leading PartnerBella Chu Chai Yee – Leading PartnerCorporate and M&ATay Weng Hwee – Hall of FameTeo Wai Sum – Leading PartnerBella Chu Chai Yee – Leading PartnerThivya Manokaran – Leading AssociateIntellectual PropertyChng Keng Lung – Next Generation PartnerTMTG. Vijay Kumar – Leading PartnerHarvey Ng Yih Xiang – Leading Associate In addition to the lawyers mentioned above, other key lawyers include Chris Toh Pei Roo, and Irene Wong Oi Ling.Our continued recognition is underpinned by the dedication of our lawyers and staff, as well as the trust and support of our clients. The firm extends its sincere appreciation to all who have played a part in these achievements.

Lee Hishammuddin Allen & Gledhill’s Energy, Projects, Infrastructure & International Arbitration Practice Group recently contributed to the Malaysian Chapter of Lexology In Depth: International Arbitration. This global guide brings together expert commentary from leading arbitration practitioners worldwide.This chapter explores key developments and emerging trends in international arbitration in Malaysia, with particular focus on institutional proceedings, the enforcement of arbitral clauses, as well as legal and procedural challenges arising from arbitration-related disputes.The chapter can be viewed here.For any queries, please contact Partners, Crystal Wong Wai Chin ([email protected]) and Lim Chee Yong ([email protected]).

TENG KEAT HUI v CEMENT INDUSTRIES OF MALAYSIA BERHAD(Interim Award No.: 843 of 2026)In a direct dismissal claim, the employer bears the burden of proving that the dismissal was with just cause or excuse. It is therefore the employer’s duty to place cogent and convincing evidence before the Industrial Court to substantiate the misconduct relied upon. Apart from the employer’s evidential burden, the Industrial Court is also vested with the power under Section 29 (g) of the Industrial Relations Act 1967 to compel a party to disclose and / or produce documents where such an order is necessary for the expeditious determination of the dispute. Pursuant to this power, parties may apply for discovery to obtain documents in the other party’s possession that are relevant to the dispute. The purpose of discovery is to ensure that both parties have access to relevant documentary evidence and to prevent trial by ambush. The High Court in YEKAMBARAN MARIMUTHU v MALAYAWATA STEEL BERHAD [1994] 2 CLJ 581 held that an application for discovery must satisfy 3 requirements, namely that the documents sought exist, are relevant to the issues in dispute, and are or have been within the possession, custody, or control of the other party. However, the process of discovery cannot be used as a fishing expedition to search either party’s records in the hope that something useful may emerge.Recently, the Industrial Court considered a discovery application in TENG KEAT HUI v CEMENT INDUSTRIES OF MALAYSIA BERHAD, where the Claimant applied for the Company to produce certain categories of documents without specifying the details of such documents, before the trial of his unfair dismissal claim. In this case, the Claimant was dismissed for failing to declare his involvement with a 3rd party organisation, using the Company’s resources to recruit industry professionals for his personal business and creating the false impression that his personal business venture was connected to the Company. In his application, the Claimant sought documents relating to earlier tenders, quotations, competitor pricing, market intelligence, and merger and acquisition discussions. He argued that these documents would demonstrate that the Company had previously benefited from information obtained through his networking activities and would support his position that such activities were undertaken in the course of his duties and with the Company’s knowledge. Ultimately, the Industrial Court dismissed the Claimant’s application because he failed to show a sufficient connection between the requested documents and the misconducts of which he was found guilty and which resulted in his dismissal. Although the Claimant argued that the Company had historically obtained and benefited from competitor information through his professional network, the misconducts in question did not relate to the Company’s practice of obtaining market intelligence, but rather to his undisclosed involvement in a personal business venture and the misuse of the Company’s resources. The Claimant also failed to explain how documents created years before the misconducts would establish that the Company knew of or approved his particular activities at the material time. The Industrial Court therefore considered the request to resemble a fishing expedition rather than a genuine attempt to obtain relevant evidence. The Industrial Court further held that it was not for the Claimant to compel the Company to produce documents which the Company did not intend to rely upon in the proceedings, which in this case, all relevant documents pertaining to the Claimant’s dismissal have been filed accordingly in the Company’s Bundle of Documents. The Company was entitled to determine the documents and witnesses it wished to rely on in proving its case. This case demonstrates that while an employer is not required to produce every document in its possession, the employer must ensure that the evidence relied upon is sufficient to establish the misconduct and justify the dismissal. Practically, employers should ensure that the necessary documentary evidence is properly identified and preserved before taking disciplinary action against an employee, such as among others: (1)   Sufficient evidence demonstrating the employee’s conduct or omission that constitutes a breach of his / her express / implied terms and conditions of employment. This may include e-mails, correspondence, recordings, screenshots, statement records, investigation findings, or other contemporaneous documents; (2)   Employment contracts, company handbook, policies, code of conduct, or internal procedures which have been acknowledged by the employee to show that the employee was aware of the relevant obligations and standards expected of him / her; (3)   Clear connection between the employee’s actions and his / her violations of the implied terms and conditions of employment, rather than assumptions or speculation; (4)   Proper records of the investigation process, including show cause letters, the employee’s explanation, investigation reports, domestic inquiry records (where applicable), and the reasons for arriving at the decision to dismiss; and (5)   Records of past disciplinary actions imposed in similar circumstances to show that the disciplinary action taken is proportionate. Importantly, employers must place sufficient evidence before the Court to justify an employee’s dismissal, but they need not disclose their entire documentary record to an employee who has not established relevance or necessity. The Company was represented in the Industrial Court by Partner, Shariffullah Majeed of Lee Hishammuddin Allen & Gledhill. The Industrial Court Interim Award may be found here. If you have any queries, please contact partners, Shariffullah Majeed ([email protected]) or Arissa Ahrom ([email protected]).

LHAG is pleased to have advised on the stamp duty exemptions and land transfer aspects of KL360 @ Menara GD, formerly known as the M101 Skywheel project.As reported by The Edge Malaysia, KL360 @ Menara GD is a mixed-use development with a gross development value of RM1.37 billion located at Jalan Tun Razak, Kuala Lumpur. The project revives the long-abandoned M101 Skywheel development and has since been redesigned into a 61-storey mixed-use development comprising serviced apartments, office suites and retail units.The revival of abandoned housing projects carries significance beyond the transaction itself. In a statement issued in connection with the groundbreaking ceremony, Housing and Local Government Minister Nga Kor Ming described such efforts as part of broader national efforts to address abandoned housing developments and safeguard homebuyers, noting that “every revived project represents real families, real aspirations and a renewed future for homeowners”.In relation to the project, LHAG advised on stamp duty exemptions for instruments executed for the revival of the abandoned project, as well as the land transfer and registration aspects required to facilitate the project’s continuation.The LHAG team was led by Partner Chris Toh Pei Roo together with Senior Associate Jay Fong Jia Sheng.This matter reflects LHAG’s experience in advising on tax and stamp duty aspects of complex property transactions, including abandoned project revival exercises, where exemption applications and transaction structuring can be critical to facilitating project rehabilitation.For queries on tax and stamp duty matters relating to property development, project rehabilitation or abandoned project revival exercises, please reach out to Chris Toh Pei Roo ([email protected]) or Jay Fong Jia Sheng ([email protected]).

Lee Hishammuddin Allen & Gledhill is pleased to have authored the Malaysia chapter of Lexology Panoramic: Transfer Pricing 2026, a global guide featuring contributions from leading tax practitioners across jurisdictions. Our chapter explains how Malaysia’s transfer pricing regime operates in practice and examines the key developments shaping its continuing evolution.Among the developments covered in this year’s edition are: the Transfer Pricing Tax Audit Framework 2025, which took effect on 31 July 2025, including its recalibrated documentation penalty structure;the surcharge framework under section 140A(3C) of the Income Tax Act 1967;the 450-day transfer pricing audit timeline;the voluntary disclosure mechanism, with reduced surcharge rates ranging from 0% to 4%; andthe distinct remission process applicable to a surcharge imposed under section 140A(3C). The chapter also provides practical guidance on the broader Malaysian transfer pricing framework, including the arm’s-length principle and the role of the OECD Transfer Pricing Guidelines; transfer pricing methods; documentation and country-by-country reporting requirements; adjustments, settlements and relief from double taxation; and advance pricing agreements. It further examines special topics such as recharacterisation, the use of comparables, secondary adjustments, non-deductible intercompany payments, anti-avoidance rules, location savings, branches and permanent establishments, exit charges, and temporary exemptions or reductions. The Malaysia chapter was authored by Partners Jason Tan Jia Xin and Chris Toh Pei Roo, Senior Associate Jay Fong Jia Sheng, and Associate Nathaniel Jagan a/l Arul Ezhilan of our Tax, Customs & Trade Practice Group. Click here to read the full chapter. More recently, the IRB issued its Malaysia Transfer Pricing Guidelines – Controlled Financial Transactions: Intra-Group Loans, addressing the transfer pricing treatment of intra-group loans and the recognition of equity funding. We have separately published an alert on these guidelines — for more information, see here. To discuss any of these developments, please contact Partners Jason Tan Jia Xin ([email protected]) and Chris Toh Pei Roo ([email protected]), Senior Associate Jay Fong Jia Sheng ([email protected]), or Associate Nathaniel Jagan a/l Arul Ezhilan ([email protected]). 7 August 2026

Lee Hishammuddin Allen & Gledhill is pleased to have collaborated with Jersey Finance for the third consecutive year in co-hosting a private wealth roundtable discussion, held on 10.6.2026 at our Kuala Lumpur office.Held under the theme “Protecting Wealth in an Uncertain World: From Geopolitics to AI”, the session brought together practitioners from across the private wealth ecosystem, including trust consultants, family office advisors, investment management professionals, legal practitioners, tax advisors, governance specialists, financial literacy advocates, and other industry stakeholders.The roundtable was moderated by our Partner, Chris Toh Pei Roo, together with Yiow Chong Tan, Director, Southeast Asia at Jersey Finance.The discussion explored the increasingly complex landscape of wealth preservation, where traditional considerations such as tax, succession, governance and asset protection now sit alongside emerging risks involving cybersecurity, data privacy, artificial intelligence, deepfakes, geopolitical instability and digital assets.Participants exchanged views on Malaysia’s Single Family Office incentive framework, the growing need for robust governance structures, and the importance of moving beyond patriarch-driven models towards more intentional succession and next-generation development. The discussion also considered the practical challenges faced by families with international assets, cross-border structures and increasingly dispersed investment portfolios.The session further examined evolving investment preferences and liquidity considerations in an uncertain market environment. Attendees discussed how family offices and wealth owners are responding to inflation, currency volatility, geopolitical developments and changing asset preferences, including the continued relevance of real estate, the growing interest in digital assets, and the need for more resilient portfolio and liquidity planning.A recurring theme throughout the discussion was the role of advisors in helping families professionalise the management of wealth. Participants emphasised the importance of education, collaboration and trusted long-term relationships, particularly as wealth owners become more discerning in assessing advisory structures, independence and the practical value that professional advisors bring.The session concluded with an engaging exchange of views among attendees, followed by a networking lunch.We extend our sincere thanks to Jersey Finance for their continued collaboration over the years, and to all speakers and attendees for contributing to a meaningful and insightful discussion.

Lee Hishammuddin Allen & Gledhill is proud to be consistently recognised in the Benchmark Litigation Asia-Pacific 2026 rankings. Lauded as one of the highly established practices in the industry by Benchmark Litigation, our Dispute Resolution practice has once again distinguished itself by securing Tier 1 rankings across the Commercial and Transactions, Construction, and Labour and Employment categories.Furthermore, a notable highlight of this year’s results is the elevation of our Tax practice group to Tier 1, a significant progression from its Tier 2 standing last year.Further strengthening our comprehensive portfolio, our Competition/Antitrust and White-Collar Crime practices have also been recognised as “Highly Recommended”, alongside a “Notable” recognition for our Intellectual Property team.Our continued recognition extends to individual excellence, with seven lawyers named “Litigation Stars” and seven others celebrated as “Future Stars”:Lambert Rasa-Ratnam – Litigation Star, Commercial and TransactionsDato’ Nitin Nadkarni – Litigation Star, ConstructionLim Heng Seng – Litigation Star, Labour and Employment | Commercial and TransactionsAndrew Chiew Ean Vooi – Litigation Star, Commercial and TransactionsSM Shanmugam – Litigation Star, Commercial and Transactions | White-Collar CrimeDarshendev Singh – Litigation Star, ConstructionChng Keng Lung – Litigation Star, Intellectual PropertyShariffullah Majeed – Future Star, Labour and EmploymentJason Tan Jia Xin – Future Star, TaxCrystal Wong Wai Chin – Future Star, ConstructionChia Oh Sheng – Future Star, Commercial and TransactionsAmardeep Singh Toor – Future Star, Labour and EmploymentIvy Ling Yieng Ping – Future Star, TaxChris Toh Pei Roo – Future Star, TaxBenchmark Litigation is a guide which uncovers the leading litigation firms and lawyers of the world. Their in-depth rankings are based on extensive interviews, as well as analysis of the market’s most important cases and firm developments.The firm remains deeply grateful for the enduring trust of our clients and the unwavering dedication of our people, both of which are foundational to our reputation as a leading law firm.For more information, please click here.

Binastra Land Sdn Bhd & Anor v Pemungut Duti Setem (Originating Summons No. BA-24NCvC-420-02/2025) On 8 May 2026, the Shah Alam High Court dismissed the taxpayers’ appeal and upheld the Collector of Stamp Duties’ assessment of stamp duty and penalty in respect of a letter of award for construction works.The High Court made its written grounds of judgment available on 21 July 2026 (which can be viewed here). The grounds address two important questions under the Stamp Act 1949:whether, before the coming into force of Section 36CA on 1 January 2026, the Collector had statutory power to issue an assessment following the discovery of an unstamped instrument during an audit; andwhether the letter of award fell within Item 22(1)(a) of the First Schedule, or was instead chargeable under Item 4.An appeal has since been filed and is pending before the Court of Appeal. This article is therefore confined to a factual summary of the arguments advanced and the findings made by the High Court.Brief FactsThe first appellant had awarded a construction contract to the second appellant through a letter of award dated 8 February 2022 relating to a development project.The letter of award stated a provisional contract sum of RM250 million and a contract period of 33 months. It also incorporated provisions relating to interim claims, certification and payment under the PAM Contract 2006. The letter of award was not submitted for adjudication after execution.Subsequent to an audit, the Collector on 31 December 2024 issued an assessment imposing stamp duty of RM250,000 and a penalty of RM50,000 on the Letter of Award.The taxpayers paid the assessed amount and lodged an objection under Section 38A. The objection was rejected and the assessment was maintained. The taxpayers thereafter appealed to the High Court under Section 39 of the Stamp Act 1949. Issues Before the High CourtThe appeal raised two principal issues:The Collector’s statutory power to issue the assessmentThe first issue was whether, before Section 36CA came into force on 1 January 2026, the Collector had statutory authority to issue an assessment where an instrument had not been brought to the Collector for adjudication under Section 36.The proper classification of the letter of awardThe second issue was whether the letter of award fell within Item 22(1)(a) of the First Schedule, or whether it was chargeable, if at all, under Item 4. The Parties’ PositionsThe Taxpayers’ contentionsThe taxpayers argued that the power to issue unilateral assessments was introduced only by Section 36CA, with effect from 1 January 2026.Prior to 1 January 2026, the following provisions of the Stamp Act performed distinct statutory functions but did not confer a general unilateral power of assessment.Section 3A empowered the Collector to require the production of instruments for the purpose of determining whether they were chargeable and whether duty had been paid;Section 4 was a charging provision;Section 36 dealt with adjudication where an instrument was brought to the Collector;Section 38A created an objection mechanism; andSection 39 provided for an appeal to the High Court.Instead, Parliament imposed other consequences for non-stamping before 1 January 2026, including:The legal disability and inadmissibility of unstamped instruments under Section 52Impounding powers under Sections 51 and 53; andPenal provisions under Sections 63 and 74.These provisions did however not permit a separate power of assessment to be implied.On classification, the taxpayers contended that the letter of award did not provide for sums payable at stated periods and that the total amount ultimately payable was not ascertainable because the contract sum was expressly provisional.The Collector’s contentionsThe Collector contended that Sections 3A, 4, 36, 38A and 39 together formed part of a statutory framework which already contemplated the ascertainment, assessment, objection and appeal of stamp duty liabilities.The Collector further argued that the letter of award was the operative and principal instrument governing the construction transaction, and that the interim claim interval, certification period, contract duration and stated contract sum were sufficient to satisfy Item 22(1)(a). High Court’s DecisionThe High Court dismissed the taxpayers’ appeal and upheld the assessment and penalty.The Collector had pre-2026 statutory power to assessThe Court referred to Section 3A, which empowered the Collector to compel the production of instruments to determine chargeability, and to Section 36, which required chargeable instruments executed in Malaysia to be brought to the Collector for assessment. In the Court’s view, this obligation was mandatory and did not depend on voluntary submission.The Court further relied on Sections 38A and 39, reasoning that the existence of an objection and appeal mechanism demonstrated that the Stamp Act 1949 already contemplated the issuance of assessments. It would be illogical, the Court held, for the Collector to possess the power to compel production of an instrument yet lack the power to assess it.The High Court accordingly concluded that the statutory framework existing before 1 January 2026 was sufficient to confer the power to issue an assessment.The letter of award fell within Item 22(1)(a)The High Court held that the letter of award was the operative and principal instrument for the transaction, capable of falling within the expression “instrument of any kind whatsoever” in Item 22.The Court further held that the payment mechanism satisfied the requirement of sums payable at stated periods, relying on the one-month interim claim interval and the requirement that certificates be honoured within 30 days from certification. Item 22(1)(a) did not require a rigid instalment table or fixed calendar dates, provided that sums were payable through stated time periods.The High Court further found that the 33-month contract period was definite and that the total amount payable was ascertainable from the stated contract sum. It therefore concluded that the letter of award fell within Item 22(1)(a) rather than Item 4.The penalty was upheldThe High Court also upheld the penalty imposed under Section 47A.The Court found that the letter of award had not been stamped within the prescribed period after execution and that the statutory late-stamping penalty had therefore been triggered. Appeal to the Court of AppealThe taxpayers have filed an appeal against the High Court’s decision. The appeal raises, among other matters, the proper construction of the Collector’s pre-2026 statutory powers and the scope of Item 22(1)(a).The appeal will also address the relationship between the Collector’s pre-2026 powers under Sections 3A, 36, 38A and 39 and the express assessment powers introduced by Section 36CA with effect from 1 January 2026.It will further consider the distinction between:the chargeability of an instrument;the obligation to submit it for adjudication and stamping;the consequences of non-stamping; andthe statutory machinery for issuing an assessment.The appeal also raises broader questions concerning the application of the settled principles governing the interpretation of revenue statutes in the stamp duty context, including:the principle that taxing legislation must be construed strictly;the rule that no tax, duty or taxing power may be imposed by implication or intendment; andthe principle that any genuine ambiguity in a revenue statute is to be resolved in favour of the taxpayer.For construction contracts and other commercial instruments, the decision also illustrates how provisions dealing with interim claims, certification periods, contract duration and provisional contract sums may be considered in determining whether Item 22(1)(a) applies.As the appeal remains pending, no further comment is made on the merits or likely outcome of the appellate proceedings.The taxpayers were represented in the High Court by Chris Toh Pei Roo and Soon Jia Ying of Lee Hishammuddin Allen & Gledhill’s Tax, Customs & Trade Practice.For inquiries on stamp duty, the Stamp Duty Self-Assessment System or stamp duty disputes, please contact the Tax, Customs & Trade Practice at [email protected].

Where the validity of a will or a person’s right to administer an estate is challenged, the estate can be left in a state of uncertainty pending resolution of the dispute. In such circumstances, the appointment of an Administrator Pendente Lite (“APL”), literally, an “administrator pending litigation” is often timely and appropriate. Role of APLAn APL is a court-appointed officer tasked with administering the estate pending the determination of a probate action. His appointment is interim in nature and is intended solely to preserve and manage the estate in the best interests of the beneficiaries pending the determination of the probate action. [1]An APL has the rights and powers of a general administrator, subject to the statutory limitation that he is not empowered to distribute the estate.[2] An APL may, as a personal representative of the estate:sue in respect of any cause of action that survives the deceased; [3]hold the immovable properties of the estate on trust and, with the court’s sanction, sell them;[4] andhold movable properties on trust to call in, sell, and convert them into money.[5] As an officer of the court, the APL may also apply to the court for further directions as necessary in the course of the administration.[6] Appointing an APLThe appointment of an APL is governed by section 19 of the Probate and Administration Act 1959 (“PAA 1959”): “Pending any probate action, letters of administration may be granted to such person as the Court may appoint, limited so that the administrator shall not be empowered to distribute the estate, and shall be subject to such control by, and direction of, the Court, as the Court deems fit; and subject to that limitation the administrator so appointed shall have all the rights and powers of a general administrator.” An APL is not appointed as a matter of course. As held by the Court of Appeal in Tan Boon Thien & Anor v Tan Poh Lee & Ors (No. 2)[7] the court must be satisfied that there are some necessities and some proper object for making the appointment. This threshold is typically met where there are active litigation and real animosity between the parties in connection with the impugned will, or where there is a genuine need to preserve the estate’s assets. Who can be appointed as APL?In practice, the parties may agree between themselves on a suitable neutral person to be appointed as APL. The appointment itself, however, remains a matter within the Court’s discretion.Ordinarily, a person who is an executor of a disputed will, a beneficiary, a person interested in the assets of the estate, or a litigant in the probate action would not be appointed as APL. This is to ensure that the APL remains neutral and acts impartially pending the resolution of the dispute.[8] Remuneration of APLThe remuneration of an APL is governed by Order 72 rule 20 of the Rules of Court 2012. The APL is required to produce at the Registry an account, verified by affidavit, of all monies and property received, paid, or otherwise dealt with in the course of the administration. That account is examined by the Registrar, who may give directions for the taxation of the APL’s costs. Duration of the Appointment of APLAn APL’s authority to act for the estate exists only from the date of the grant. In Jigarlal Kantilal Doshi v Amanah Raya Bhd[9], the Court of Appeal held that a subsequent grant of administration pendente lite cannot retrospectively validate acts done in respect of the estate before the grant was made.The role of an APL comes to an end where the underlying probate dispute is resolved – whether by the will being proved and a grant of probate being issued, or by the will being set aside and letters of administration granted in its place. In either case, the APL ceases to act, and the estate passes into the hands of the executor or administrator, as the case may be. ConclusionThe appointment of an APL is an important mechanism for safeguarding an estate while disputes concerning its administration are being resolved. While the appointment is temporary in nature and the APL’s powers are necessarily limited, the role of APL is important and serves a critical purpose in ensuring that the estate is properly preserved, managed and protected pending the final determination of the probate action. For any enquiries, please contact the author, Partner Medha Ong ([email protected]), or any member of Lee Hishammuddin Allen & Gledhill’s Succession, Trusts, Estate Planning & Private Wealth (STEP) Practice, namely Partners Andrew Chiew Ean Vooi ([email protected]), Bella Chu Chai Yee ([email protected]), Chng Keng Lung ([email protected]), or Chris Toh Pei Roo ([email protected]).  [1]              Tebin bin Mostapa (as administrator of the estate of Hj Mostapha bin Asan, deceased) v Hulba-Danyal bin Balia & Anor (as joint administrators of the estate of Balia bin Munir, deceased) [2020] 4 MLJ 721, FC[2]               s. 19 PAA 1959[3]               s. 59 PAA 1959[4]               s. 68(1)(a) PAA 1959[5]               s. 68(1)(b) PAA 1959[6]               s. 19 PAA 1959[7]               [2021] 1 CLJ 391, CA[8]               Chan T’shiao Li & Anor v Malcom Fernandez & Anor [2023] MLJU 2660, HC[9]               [2014] 6 MLJ 629, CA

Akamai Technologies International AG v Ketua Pengarah Hasil Dalam Negeri & Lembaga Hasil Dalam Negeri Malaysia[1]Akamai Technologies Malaysia Sdn Bhd & Akamai Technologies International AG v Ketua Pengarah Hasil Dalam Negeri[2]On 25 June 2026, the Kuala Lumpur High Court (“High Court“) quashed the Director General of Inland Revenue’s (“Revenue“) decision and additional assessments amounting to over RM 32 million for the Years of Assessment (“YAs“) 2015 to 2019, in judicial review applications brought by Akamai Technologies International AG (“Akamai Swiss“) and Akamai Technologies Malaysia Sdn Bhd (“Akamai MY“). In so doing, the High Court made the following important decisions:An applicable DTA prevails over inconsistent provisions of the Income Tax Act 1967 (“ITA“) pursuant to Section 132;The Revenue acts unlawfully where it fails to follow binding judicial authority and give effect to its statutory duty under Section 132;The interpretation of a written agreement and the proper legal definition of “royalty” are questions of law suitable for determination by the High Court;The availability of an appeal to the SCIT does not bar judicial review where illegality or other recognised grounds of review are established;The filing of Form Q does not, by itself, preclude judicial review. As the High Court previously granted a stay of the Revenue’s decision and the Assessments pending disposal of the judicial review applications, the disputed tax liabilities were not enforceable while the legality of the Revenue’s actions was determined.Multinationals conducting business in Malaysia can take comfort that the courts will hold the Revenue to its obligations under applicable DTAs and will not permit the Revenue to disregard binding treaty provisions.Brief FactsAkamai MY entered into a Services Reseller Agreement with Akamai Swiss, pursuant to which Akamai MY was appointed as a non-exclusive reseller authorised to market, resell and support Akamai Swiss’s proprietary services in Malaysia (“Akamai Services”). In consideration of its appointment, Akamai MY paid annual fees to Akamai Swiss (“Services Reseller Payments”). Akamai MY was not granted access to, or any right to use, Akamai Swiss’s software, intellectual property, know-how or proprietary information.Akamai Swiss sought confirmation from the Revenue that the Services Reseller Payments did not constitute “royalties” under Article 12 of the Switzerland–Malaysia Double Taxation Agreement (“Swiss–Malaysia DTA”) and were therefore not subject to withholding tax. In support of its position, Akamai Swiss relied on Section 132 of the ITA and longstanding binding judicial authority establishing that an applicable DTA prevails over inconsistent provisions of the ITA.However, by email dated 24 January 2022, the Revenue decided that the Services Reseller Payments were royalties under Section 2 of the ITA, being payments for the use of software, without addressing the Swiss–Malaysia DTA or Section 132 of the ITA (“Revenue’s Decision”). The Revenue also raised additional assessments on Akamai MY for YAs 2015 to 2019 (“Assessments”).Dissatisfied with the Revenue’s Decision and Assessments, the Taxpayers commenced judicial review proceedings seeking to quash:(a) The Revenue’s email dated 24 January 2022; and(b) The Notices of Additional Assessment for the YAs 2015 to 2019. Revenue’s PositionThe Revenue contended, among other things, that:Judicial review should not be entertained because the Taxpayers had an alternative statutory remedy by way of an appeal to the SCIT, and Akamai MY had already filed Form Q;The dispute involved technical investigations, tax computations and questions of fact that should be determined by the SCIT; andThe Revenue’s decision was not affected by illegality, irrationality or procedural impropriety. Taxpayer’s ArgumentsThe Taxpayers contended that:Pursuant to Section 132 of the ITA, the definition of “royalty” in the Swiss–Malaysia DTA prevailed over the definition in section 2 of the ITA;The Revenue acted unlawfully by failing to follow binding judicial decisions, specifically brought to its attention during the audit, which had consistently held that an applicable DTA prevails over inconsistent provisions of the ITA;The Services Reseller Payments were not royalties under the Swiss–Malaysia DTA because Akamai MY had not acquired any right to use Akamai Swiss’s software, intellectual property, know-how or proprietary rights; andThe additional assessments for YAs 2015 and 2016 were time-barred under Section 91(1) of the ITA. High Court’s DecisionThe High Court allowed both judicial review applications. The key findings of the High Court are summarised below. An Appeal to the SCIT Does Not, by Itself, Bar Judicial ReviewThe High Court reaffirmed that the availability of an alternative statutory remedy does not bar judicial review where the taxpayer establishes clear illegality, unlawful treatment, excess of power or a breach of natural justice.Crucially, the High Court held that the filing of Form Q does not, by itself, preclude judicial review. A taxpayer is not necessarily confined to the SCIT process merely because Form Q has been filed. The Dispute Raised Questions of Law for the High CourtThe High Court rejected the Revenue’s characterisation of the dispute as one requiring technical investigation, tax computation or factual determination by the SCIT. The Court held that the applications raised questions of law, including:(a) Whether the Revenue was legally entitled to apply the domestic definition of “royalty” in Section 2 of the ITA notwithstanding section 132 and binding decisions holding that the applicable DTA prevails; and(b) The proper interpretation of the Services Reseller Agreement, since the interpretation of a written agreement is a question of law. The High Court was therefore the appropriate forum to determine those questions. The Swiss–Malaysia DTA Prevails Over the ITAApplying Section 132 of the ITA, the High Court held that the definition of “royalty” in the Swiss–Malaysia DTA prevailed over and displaced the broader domestic definition in Section 2 of the ITA. The applicable legal test was therefore the definition contained in the DTA, not the domestic definition relied upon by the Revenue. Failure to Follow Binding Decisions Amounted to IllegalityThe High Court found that the Revenue had, without explanation, failed to follow the binding decisions in:(a) Director-General of Inland Revenue v Euromedical Industries [1983] CLJ Rep 128;(b) Damco Logistics v Ketua Pengarah Hasil Dalam Negeri (2011) MSTC 30-033;(c) Wira Swire v Ketua Pengarah Hasil Dalam Negeri [2019] 1 LNS 722; and(d) Ketua Pengarah Hasil Dalam Negeri v Thomson Reuters (2016) MSTC 30-124. Those decisions consistently recognised that, pursuant to Section 132, an applicable DTA prevails over inconsistent provisions of the ITA. The High Court held that the Revenue’s failure to follow those decisions constituted illegality. It further amounted to a failure to perform the Revenue’s statutory duty to give effect to Section 132 of the ITA. The Services Reseller Payments Were Not RoyaltiesApplying Damco Logistics, the High Court held that the Services Reseller Payments were not royalties. Akamai MY had merely been appointed as a non-exclusive reseller authorised to market, resell and support Akamai Swiss’s proprietary services in Malaysia. Akamai MY had not been granted access to, or any right to use, Akamai Swiss’s software, intellectual property, know-how or proprietary information. There was therefore no transfer or grant of any right to use software, know-how or proprietary rights capable of constituting a royalty under the Swiss–Malaysia DTA. The Assessments for YAs 2015 and 2016 Were Time-BarredThe High Court found that the material facts had already been brought to the Revenue’s attention in 2014, but the additional assessments were only issued on 31 December 2021. The additional assessments for YAs 2015 and 2016 were therefore issued outside the statutory time limit and were time-barred.The High Court’s broad grounds of decision can be viewed here. ConclusionThe Akamai decisions reinforce that, pursuant to Section 132, an applicable DTA prevails over inconsistent provisions of the ITA, and that the Revenue must exercise its statutory powers accordingly. A failure to give effect to binding judicial authority and Section 132 may amount to illegality and is amenable to judicial review. The decisions have important implications for taxpayers involved in cross-border technology, software, licensing, cloud, platform and digital service arrangements, and more broadly whenever the Revenue seeks to apply a domestic definition without first giving proper effect to an applicable DTA.The High Court also confirmed that the filing of Form Q does not, by itself, bar judicial review. Taxpayers may file Form Q to preserve their statutory appeal rights while separately pursuing judicial review where the dispute raises questions of law, illegality or a failure to perform a statutory duty. The existence of the statutory appeal mechanism does not immunise an unlawful decision from judicial scrutiny.Equally significant is the High Court’s confirmation that the filing of a Notice of Appeal in Form Q does not, by itself, bar judicial review. The existence — or even invocation — of the statutory appeal mechanism does not immunise an unlawful decision from judicial scrutiny. Where a dispute concerns a question of law, the legality of the Revenue’s decision-making process, a failure to follow binding authority or a failure to perform a statutory duty, the High Court may remain the appropriate forum.The Taxpayers were represented at the leave stage by Dato’ Nitin Nadkarni, Jason Tan Jia Xin and Chris Toh Pei Roo, and at the substantive hearing by Dato’ Nitin Nadkarni and Chris Toh Pei Roo, of Lee Hishammuddin Allen & Gledhill’s Tax, Customs & Trade Practice.For inquiries on Double Taxation Agreements, withholding tax, judicial review or tax disputes, please contact the Team Partners at [email protected]. [1] WA-25-149-03/2022[2] WA-25-150-03/2022

Lee Hishammuddin Allen & Gledhill’s Tax, Customs & Trade Practice Group recently contributed to the Malaysian Chapter of Lexology In Depth: Tax Disputes and Litigation 2026. This comprehensive guide features chapters on tax disputes and litigation, exclusively authored by prominent tax lawyers and leading law firms from around the world.In this year’s Malaysian chapter, Partners Jason Tan Jia Xin and Chris Toh Pei Roo, Senior Associate Jay Fong Jia Sheng and Associate Nathaniel Jagan a/l Arul Ezhilan provide practical insights into Malaysia’s tax disputes and litigation framework. The chapter covers, among others, the “pay first and talk later” principle, procedures for disputing income tax, customs, real property gains tax and stamp duty assessments, judicial review and stay applications, tax penalties and remedies, and the powers and approaches of the tax authorities.The chapter also discusses recent developments in Malaysian tax jurisprudence, including the recovery of taxes paid under laws declared unconstitutional, procedural fairness in real property gains tax assessments and the stamp duty treatment of novation agreements. It further examines the expected rise in tax disputes following the expansion of self-assessment regimes for real property gains tax and stamp duty, increased audit activity and heightened scrutiny of transfer pricing and related-party transactions.The chapter can be viewed here.For any queries, please contact Partners, Jason Tan Jia Xin ([email protected]) and Chris Toh Pei Roo ([email protected]), and Senior Associate, Jay Fong Jia Sheng ([email protected]).

Nor Azlinda Mohd Abdullah v Jawatankuasa Tatatertib Kumpulan Bukan Eksekutif Tabung Haji, Jawatankuasa Rayuan Tatatertib Kumpulan Bukan Eksekutif Tabung Haji & Lembaga Tabung Haji(Kuala Lumpur Judicial Review Application No. WA-25-351-10/2023)The High Court, on 16th January 2026, dismissed a judicial review application by an employee challenging her dismissal from a statutory body on the grounds of insubordination and absence without leave after 20 years of service. In declining to intervene, the Court emphasised the limited supervisory role of judicial review and reiterated that courts will not substitute their views for those of the disciplinary authority in the absence of any illegality, irrationality, or procedural impropriety that would materially affect the validity of the decision. Background FactsThe employee was employed by Lembaga Tabung Haji (“TH”) pursuant to a contract of employment which expressly conferred on the employer the right to transfer her to any posting as determined by operational requirements. In consideration of a finding of guilt in separate disciplinary proceedings on the part of the employee in breaching TH’s procedures in handling depositors’ monies at one of its branches, TH issued a Transfer Order directing the employee to report for duty at its Headquarters. At the employee’s persistent requests, TH exercised discretion and postponed the reporting date on two occasions. The first postponement was from 25 January 2023 to 7 February 2023, and subsequently to 13 February 2023, to allow the employee additional time to make the necessary arrangements and preparations to report for duty. Throughout this period, the employee continued to seek reconsideration of the transfer, citing family obligations, rather than complying with the instruction to report for duty, thus displaying no intention to report for duty in the first place.Notwithstanding these accommodations, the employee failed to report for duty on 13 and 14 February 2023. No prior leave application was made, nor was any supporting documentation produced to justify her absence on those dates. While medical certificates were subsequently furnished, these only covered periods commencing after 14 February 2023 and did not account for the material dates. Following her failure to report for duty as instructed, the employee was directed to provide her written representation to defend herself against the charges of insubordination and absence without leave, in line with the governing disciplinary regulations[1].The TH Disciplinary Committee subsequently convened and upon deliberating on the employee’s representation against the two charges, it ultimately decided that only the punishment of dismissal was appropriate. Upon the employee’s appeal, the TH Disciplinary Appeal Committee reviewed the disciplinary record, the Disciplinary Committee’s grounds of decision, and the mitigation advanced, and upheld the punishment of dismissal as decided by the Disciplinary Committee. Transfer Orders in Statutory BodiesAgainst this factual backdrop, the Court assessed the decisions of the Disciplinary Committee and Disciplinary Appeal Committee and held that it is well established that the transfer of an employee from one department or station to another is a prerogative of the employer, and that courts will ordinarily be slow to interfere. In the context of statutory bodies which are also government-linked investment organisations such as TH and in public service, this principle is even more firmly entrenched. The courts have also affirmed that, save in exceptional circumstances, every civil servant is liable to be transferred, and that it is for the Government or statutory authority to decide whether a transfer is required in the public interest, having regard to its broader duties. Judicial interference in such matters may, in certain instances, amount to an unjustifiable usurpation of executive discretion[2].The duty of an employee to obey a lawful transfer order is equally trite. The courts have also consistently held that even if a transfer is perceived to be unreasonable, so long as it is lawful and within the scope of employment, the employee is duty-bound to comply[3].It is also pertinent to note that the employee had previously committed a misconduct involving the mishandling of depositors’ monies. In that context, the decision to transfer her to a department that did not involve handling such funds was consistent with legitimate operational considerations and could not be characterised as punitive or tainted with bad faith. Notably, the employee herself acknowledged in her affidavit that TH had the right to transfer her, albeit while alleging improper motive, which the Court found to be unsupported by the evidence.In dismissing the application, the High Court concluded that the employee’s dismissal was neither tainted by irrationality nor procedural impropriety. Disciplinary authorities in statutory bodies are best placed to assess the seriousness of misconduct and determine the appropriate sanction, and that long service does not immunise an employee from dismissal for serious breaches of discipline. The decision serves as a clear reminder that within government and statutory service, compliance with lawful transfer orders which serve to advance the organisation’s functions and sanctity is fundamental, and that challenges to such instructions cannot be used to justify an outright defiance.The statutory body was represented by Partners, Shariffullah Majeed and Nurul Aisyah Hassan, of Lee Hishammuddin Allen & Gledhill.If you have any queries, please contact Partners Shariffullah Majeed ([email protected]) or Nurul Aisyah Hassan ([email protected]).  [1]               Tabung Haji Disciplinary Regulations 2010[2]              See: Haslina Md Ahir v Jawatankuasa Tatatertib Majlis Daerah Pendang Kedah Darul Aman & Anor [2018] 1 LNS 1877[3]              See: Nor’isham Manap v Lembaga Tatatertib Perkhidmatan Awam & 2 Ors [2015] 1 LNS 1408

On 26 June 2026, the Inland Revenue Board of Malaysia (“IRB”) announced a six-month extension of the Special Voluntary Disclosure Programme for Stamp Duty 2026 (“SVDP”), from 1 July 2026 to 31 December 2026. The extension applies to instruments executed from 1 January 2023 to 31 December 2025, provided that stamping and payment of stamp duty are completed within the extended SVDP period.At first glance, the extension gives Duty Payers additional time to regularise unstamped or late-stamped instruments. However, the position has become more nuanced following the IRB’s issuance of the Guidelines on the Imposition of Stamp Duty on Instruments Chargeable under the First Schedule of the Stamp Act 1949 (“New Guidelines”) on 30 June 2026.The New Guidelines set out the IRB’s current administrative approach to various categories of instruments, including leases, transfers of unlisted shares, transfers of real property, business transfers, assignments, security instruments and instruments falling under general stamping. In doing so, the New Guidelines appear to identify a broader range of instruments which may require stamp duty consideration than what some Duty Payers may have previously understood.The result is that the SVDP extension should not be viewed merely as extra time to complete an existing review. Rather, it may require Duty Payers to revisit some of the instruments which may have previously been reviewed or treated as not chargeable, exempt, nominally dutiable or low-risk.A. What the SVDP Extension MeansThe Stamp Duty SVDP extension is a significant opportunity for Duty Payers to regularise instruments executed between 1 January 2023 and 31 December 2025.The IRB has stated that no penalty appeal application is required, and that penalties will be waived automatically upon payment of stamp duty. Instruments stamped under the SVDP will also not be audited, although this does not preclude the IRB from auditing other instruments not stamped under the SVDP. The SVDP does not apply to fraud cases.In practice, the SVDP may be relevant to, among others:financing documents, shareholder loans, intercompany loans and advances;service agreements, management agreements and commercial contracts;assignments, guarantees, indemnities and undertakings;tenancy, lease and licence arrangements;business transfer, asset transfer and restructuring documents; anddocuments previously treated as exempt, nominally dutiable or not chargeable without detailed review.Given the new 31 December 2026 deadline, Duty Payers should not wait until the end of the extended SVDP period before commencing or refreshing their review, particularly where a large volume of historic instruments may need to be assessed. B. Why A Fresh Review May Be NeededThe key development is not merely that the SVDP has been extended. The New Guidelines may affect how Duty Payers previously understood the stamp duty treatment of their historic and current instruments.The New Guidelines emphasised that stamp duty is determined based on the contents and legal effect of an instrument, and not merely by its title[1]. They also state that the examples of instruments listed are not exhaustive[2].This means that instruments previously treated as outside the stamp duty net, nominally dutiable or low-risk may now require closer scrutiny, especially where their actual clauses, obligations, payment mechanics, transfer provisions or security features may point to a different stamp duty treatment. C. Key Observations on the New GuidelinesThe New Guidelines cover a wide range of instruments, including leases, share transfers, transfers of real property, business transfers, assignments, security instruments and instruments falling under general stamping.Our immediate observations focus on two areas with significant practical implications: (i) security instruments; and(ii) instruments involving the transfer of property or interests in property. These areas are important because they may affect instruments which businesses have historically treated as ordinary commercial documents or nominally dutiable instruments. i. Security InstrumentsThe New Guidelines describe a security instrument as one containing a clear undertaking to create a liability or obligation to pay money, repay money, guarantee payment of money or guarantee repayment of money.[3]Significantly, the New Guidelines further state that an instrument need not contain a pledge, charge or other traditional security interest to be regarded as a security instrument. According to the IRB, it is sufficient if the instrument contains an obligation or undertaking to make payment.[4]This appears to reflect a broad administrative approach by the IRB. In particular, Duty Payers should be careful with instruments that contain payment undertakings, repayment obligations, indemnities, guarantees, set-off arrangements, deferred payment terms, or obligations to make future payments. The Guidelines do not appear to expressly confine the concept of a “security” instrument to documents with fixed repayment periods, specified maturity dates, fixed instalments, periodic payment obligations, or formal security over assets.In addition to traditional financing and loan documentation, the New Guidelines include an extensive list of examples of instruments which may fall within the security category. These include, among others[5]:Service Agreements;Property Management Agreements;Factoring Agreements;Letters of Award;Authorised Dealer Agreements and Dealer Agreements;Sponsorship Agreements;Shareholder Agreements;Assignment;Deed/Letter of guarantee and indemnity;Letters of Undertaking;Letters of Set-Off; andvarious financing, banking and Islamic financing documents[6]. Some of these instruments particularly letters of award and letters of undertaking, have historically been regarded by many businesses as ordinary commercial documents and, in practice, were frequently stamped with nominal duty of RM10. Their inclusion in the list of examples under the security category is therefore likely to attract considerable attention from Duty Payers.This may create uncertainty in cases where an agreement contains payment obligations but is not traditionally regarded as a financing or security document. For example, commercial agreements, service agreements, letters of undertaking, sponsorship agreements, dealer agreements, investment agreements, assignments or indemnities may need to be reviewed carefully to determine whether they merely record commercial obligations, or whether they create a liability, repayment obligation, guarantee or other security-like undertaking for stamp duty purposes.That said, the inclusion of a particular document type in the New Guidelines does not, in our view, automatically determine its stamp duty treatment. As the New Guidelines themselves emphasise, stamp duty is determined by the contents and legal effect of an instrument rather than its title. Accordingly, the critical question remains whether the instrument merely records commercial rights and obligations or whether, properly construed, it creates a liability, repayment obligation, guarantee or other security-like undertaking falling within the First Schedule of the Stamp Act. ii. Transfer of Property InstrumentAnother significant development in the New Guidelines is the IRB’s treatment of instruments involving the transfer of property.The New Guidelines indicate that ad valorem stamp duty under Item 32 is not confined to instruments effecting the transfer of legal ownership. Instead, the IRB takes the position that Item 32 may also apply to instruments that have the effect of transferring, assigning or disposing of any property or interest in property, whether a legal interest or any other interest, including a beneficial interest.[7]The Guidelines further state that where ad valorem duty has been paid on an instrument transferring a beneficial interest, a subsequent instrument transferring or registering the corresponding legal title may only attract nominal duty under Item 32(i).[8]Apart from the conventional Memorandum of Transfer (MOT), the New Guidelines also set out a considerably broader list of examples of instruments which the IRB considers may fall within Item 32. These include, among others:Joint Venture Agreement;Development Rights Agreement;Power of Attorney (being conveyance of real property in consideration of, and creating by way of sale or gift)Trust Deeds; andDeed of Assignment[9]. The inclusion of joint venture agreements, development rights agreements and trust deeds is likely to attract attention. Many such agreements have historically been treated in practice as ordinary commercial agreements or nominally dutiable RM10 instruments, unless they clearly effected a transfer of proprietary rights.In our view, not every joint venture agreement or development rights agreement necessarily constitutes an instrument transferring property for the purposes of Item 32. The critical question remains whether the instrument transfers a proprietary or equitable interest in identifiable property, or merely creates contractual rights and obligations between the parties.A joint venture agreement or development rights agreement that merely establishes the commercial framework for collaboration or grants contractual rights to undertake a development, without transferring any proprietary or equitable interest in the underlying property, should not fall within Item 32. As the Guidelines themselves recognise, stamp duty is determined by the contents and legal effect of an instrument rather than its title. Each instrument must therefore be analysed on its own terms. Legal Effect of the New GuidelinesThe New Guidelines are important in setting out the IRB’s current administrative position. However, they should not be treated as a substitute for the Stamp Act itself.Although section 76B of the Stamp Act empowers the Collector to issue guidelines to clarify the law or facilitate compliance, it does not, in our view, operate as a charging provision. The Guidelines therefore cannot create, expand or modify stamp duty liability beyond what is prescribed under the Stamp Act and the First Schedule.Accordingly, while the New Guidelines provide valuable insight into the IRB’s administrative approach, they are not determinative of the stamp duty treatment of any particular instrument. Ultimately, liability to stamp duty must be determined by the provisions of the Stamp Act and the legal effect of the instrument concerned. ConclusionThe extension of the SVDP provides Duty Payers with additional time to regularise past instruments. However, the New Guidelines signify that businesses should not assume that prior reviews or historic stamping positions remain sufficient.In short, the SVDP provides the window, but the new Guidelines may broaden the list of instruments that need to be looked at again. Given the breadth of the Guidelines, particularly in relation to security instruments and instruments containing payment obligations, careful legal analysis is recommended before adopting a stamping position. Should you have any questions on the above, or require assistance on any stamp duty matter, please contact our Tax, Customs & Trade team at [email protected], Jason Tan Jia Xin at [email protected], Ivy Ling Yieng Ping at [email protected], or Chris Toh Pei Roo at [email protected].   [1] Paras. 1.3 & 2.2, Introduction of New Guidelines @ p.2 & 3[2] Para. 2.1, Introduction of New Guidelines @ p.3[3] Para. 1.1, Section F of New Guidelines @ p.20[4] Para. 1.3, Section F of New Guidelines @ p.20[5] Para. 4, Section C of New Guidelines @ p.12[6] Para.4, Section F of New Guidelines @ p.21 – 34[7] Para.1, Section C of New Guidelines @ p.10[8] Para.2.2, Section C of New Guidelines @ p.11[9] Para. 4, Section C of New Guidelines @ p.12

MAHAMOOD MUBARAK ALI v FGV HOLDINGS BERHAD(Award No.: 838 of 2026)Constructive dismissal is sometimes invoked by delinquent employees as a convenient means of avoiding their contractual obligations. This is not what the law of constructive dismissal was designed to achieve. Constructive dismissal exists to protect an employee whose employer has committed a fundamental breach of the employment contract. Through sufficiently serious conduct, an employee may have no reasonable alternative but leave the employer by resigning.For example, in VELAN @ RAKESHKUTTY VADIVAL v OMYA MALAYSIA SDN BHD [2023] 2 LNS 2239, the employee alleged that he had been constructively dismissed after being placed on a performance improvement plan and facing a possible domestic inquiry for non-compliance. The Industrial Court found that the employee had negotiated a compensation package and voluntarily executed a Deed of Release & Settlement. The Industrial Court held that his constructive dismissal claim had been brought “in bad faith and with an oblique motive” and was “a charade” intended to facilitate a further claim against his employer. Also, in NG CHENG WEI v SYNCHRO RKK SDN BHD [2023] 2 LNS 0577, the Industrial Court found that the employee attended a meeting convened to resolve his grievances with the intention of secretly gathering evidence for future use. His conduct showed that he had “all along planned his move to claim constructive dismissal” and “building his case against the Company”.An attempt of a similar nature arose in MAHAMOOD MUBARAK ALI v FGV HOLDINGS BERHAD, where the Claimant’s education was sponsored by the Company in 2015 and under this arrangement, he was required to serve within the Company for 10 years upon completion of his studies. This scholarship bond reflected a straightforward bargain: the employer invested in the employee’s education and development, while the employee agreed to serve the employer for a specified period so that the employer could benefit from the knowledge, skills and professional development gained through that investment.In this case, the Claimant joined the Company in 2019 and progressed to the position of Senior Executive where he had 3 executives reporting to him. In 2022, the Company restructured the relevant department which resulted in both the Claimant and the 3 executives reporting to a new head. The Claimant contended that the restructuring was implemented without consulting him or obtaining his approval. He also complained that the programmes initiated by him had been cancelled, he had lost his supervisory authority and effectively been placed in “cold storage”. On the surface, the claim was framed as one of victimisation, unilateral changes to the Claimant’s responsibilities and a breakdown of trust and confidence.Despite this, the Industrial Court found that the restructuring did not reduce the Claimant’s grade, salary or contractual benefits. His contract did not guarantee that he would permanently lead a particular unit or retain a fixed number of subordinates, nor did it require the Company to obtain his consent before reorganising its operations. In fact, the restructuring was implemented in response to the Claimant’s own complaints regarding his workload. The Claimant had expressed that he felt overwhelmed by the responsibility of supervising the 3 executives, which affected his ability to focus on his primary responsibilities. The Company’s decision to revise the reporting structure was intended to alleviate his supervisory burden and enable him to better manage his responsibilities, rather than diminish his role or marginalise him.Instead of an attempt to force the Claimant’s resignation, the Company’s actions demonstrated an effort to address the difficulties he had raised. The Industrial Court found that the restructuring was a bona fide exercise of managerial discretion and rejected the Claimant’s attempt to rely on the said restructuring as evidence of constructive dismissal. The Company’s conduct was also inconsistent with any intention to drive the Claimant out, as he was promoted shortly before the restructuring and the Company remained substantially invested in him through the scholarship arrangement and the approval of 13 months’ unpaid leave for him to pursue a master’s degree in London, subject to his return upon completion. The Company also took steps to promptly investigate and discuss the grievances he had raised. These actions showed that the Company genuinely intended for the employment relationship to continue.The timing of the resignation was equally significant. Although the restructuring was announced in June 2022, the Claimant did not resign until April 2023. In the intervening period, he applied for postgraduate study, obtained extended unpaid leave, travelled to London and remained employed by the Company. The Industrial Court concluded that the resignation was not genuinely caused by the restructuring. Rather, the Claimant was seeking to avoid completing the remaining 6 years of his scholarship bond after the Company had financed his undergraduate education. Describing his conduct as “seperti kacang lupakan kulit”, the Industrial Court found that there had been no fundamental breach by the Company and that the Claimant had voluntarily resigned.Therefore, when faced with an unfounded constructive dismissal claim, employers must avoid being drawn into the employee’s narrative. The key is to maintain evidential records which demonstrate that the employer had acted bona fide and that the resignation was not the result of any fundamental breach. This includes ensuring that managerial decisions, such as restructuring, changes in reporting lines or adjustments to responsibilities, are supported by legitimate business reasons and properly documented. A constructive dismissal claim often turns on whether the employer’s conduct was a genuine exercise of managerial discretion or an attempt to force the employee’s departure. Where an employee raises concerns, employers should address those concerns, investigate the issues raised and take reasonable steps to preserve the employment relationship. Ultimately, contemporaneous records of the employer’s decisions, communications and actions will be critical in demonstrating the employer’s true intention and rebutting allegations that the employee was deliberately pushed out.The Company was represented in the Industrial Court by Partners, Shariffullah Majeed and Arissa Ahrom of Lee Hishammuddin Allen & Gledhill.The Industrial Court Award may be found here.For further queries, please contact Shariffullah Majeed at [email protected] or Arissa Ahrom at [email protected].

Lee Hishammuddin Allen & Gledhill is delighted to bring home the “Labour and Employment Law Firm of the Year” title from the 13th ALB Malaysia Law Awards 2026, hosted by Thomson Reuters on Thursday, 9th April 2026.Winning this award at the Mandarin Oriental Kuala Lumpur marks a significant milestone and a successful year for the practice and our firm. This achievement would not have been possible without the continued trust and support of our clients, as well as the unwavering dedication of our lawyers and staff. The firm is very grateful to each and every one of them.

We are thrilled to share that four Lee Hishammuddin Allen & Gledhill partners have been selected for the  Lexology Index (formerly “Who’s Who Legal”)  –  Southeast Asia Guide 2026.The recognised partners and their respective areas of recognition are as follows:Dato’ Nitin Nadkarni – Arbitration, ConstructionTay Weng Hwee – M&ACrystal Wong Wai Chin – ArbitrationAmardeep Singh Toor – Labour, Employment & BenefitsThe Index serves as a key industry resource for highlighting and identifying top expertise in the legal market. According to Lexology, the selection recognises “individuals that are considered leaders in their field”, with fewer than 50% of individuals considered ultimately selected for inclusion.We extend congratulations to all those recognised and thank them for their continuing contribution to our clients and the wider legal profession.

Lee Hishammuddin Allen & Gledhill is pleased to announce the admission of Medha Ong Ann Ting as Partner, with effect from 1 January 2026.The newly promoted partner encapsulates LHAG’s strategy and commitment to investing in talent within emerging and high-demand sectors.LHAG’s Partner Andrew Chiew Ean Vooi said:“We are pleased to welcome Medha to the partnership. Medha is a talented and dedicated practitioner whose professionalism, strong work ethic, and technical capabilities align closely with LHAG’s values. Her expertise will add depth to our practice and further enhance the support we provide to our clients. We look forward to her continued development and contributions to the firm’s growth.”Medha Ong Ann Ting – Banking and Insolvency As a member of the Firm’s Banking and Insolvency Practice Group, Medha advises and represents financial institutions, insolvency practitioners, statutory bodies, and corporates on a wide spectrum of contentious banking, restructuring, and insolvency matters. Her practice covers corporate and personal insolvency, judicial management and winding-up proceedings, proof-of-debt and asset recovery disputes, as well as related advisory work. She is regularly instructed in complex, high-value insolvency disputes across diverse industries, bringing a commercially attuned and strategic approach to contentious matters.In addition to her practice, Medha contributes to the development of insolvency jurisprudence and thought leadership. She is a contributor to Malaysian Civil Procedure (Sweet & Maxwell Asia) and has co-authored articles and client alerts for the Firm’s Banking & Insolvency and Corporate & Commercial Dispute Resolution practice groups.Medha holds the INSOL Foundation Certificate in International Insolvency Law and is an active member of the International Women’s Insolvency & Restructuring Confederation (IWIRC) Malaysia Network, reflecting her engagement with international best practices and professional networks in restructuring and insolvency.She obtained her LLB (Hons) from Queen Mary University of London and was called to the Bar of England and Wales in 2018 upon completing the Bar Professional Training Course at BPP University Manchester. She was subsequently admitted as an Advocate and Solicitor of the High Court of Malaya.5 January 2026

Lee Hishammuddin Allen & Gledhill is pleased to welcome Amin Abdul Majid, Khoo Yu Lin and Andreanna Ten Maven as Partners with effect from 1 July 2026.Their admission strengthens the firm’s Energy, Projects & Infrastructure Practice, adding significant experience across energy, infrastructure, renewable energy, ESG, sustainability and corporate transactions.Amin Abdul MajidAmin has more than 20 years of experience advising on electricity and renewable energy, oil and gas, decarbonisation, infrastructure, and law and policy reform.His career spans private practice, energy litigation and senior in-house roles, including with a major national utility. He has also contributed to the development of key Malaysian energy legislation, including the Renewable Energy Act 2011, the Sustainable Energy Development Authority Act 2011, the Energy Efficiency and Conservation Act 2024 and the Carbon Capture, Utilisation and Storage Act 2025.Amin is ranked by Chambers Asia-Pacific, The Legal 500 Asia-Pacific, IFLR1000 and asialaw. He holds an LLB from the London School of Economics and Political Science and a Master of Jurisprudence in Energy, Environment and Natural Resources Law from the University of Tulsa.Khoo Yu LinYu Lin has two decades of experience advising on major infrastructure, renewable energy and utilities projects, as well as corporate transactions and mergers and acquisitions.Her regional experience includes advising the Myanmar government during the initial phase of the Dawei Special Economic Zone. She has also worked closely with Malaysian government ministries on energy and sustainability law reform, including the Energy Efficiency and Conservation Act 2024, the Carbon Capture, Utilisation and Storage Act 2025 and recent electricity-sector reforms.Yu Lin is recognised as a Notable Practitioner by IFLR1000 and was named a Commended External Counsel by the In-House Community. She holds degrees in Law and Commerce from the University of Melbourne.Andreanna Ten MavenAndreanna advises on energy transition, ESG and sustainability, energy and oil and gas infrastructure, and public and private mergers and acquisitions.Her practice focuses on the intersection of climate, labour and governance considerations with corporate structures, transactions and project development as well as carbon credits. She also has substantial experience in corporate finance and securities law, including listed-group reorganisations, cross-border joint ventures, capital markets transactions, REITs and regulatory matters.Andreanna holds an LLB from the University of London and an LLM in Green Financing from Queen Mary University of London, which she pursued as a British Chevening Scholar.We warmly welcome Amin, Yu Lin and Andreanna to the partnership and look forward to building the next chapter of LHAG’s Energy, Projects & Infrastructure Practice together.01 July 2026

The Customs Appeal Tribunal (“CAT”) has unanimously allowed all three of a taxpayer’s appeals and set aside the rulings of the Royal Malaysian Customs Department (“Customs”). Jason Tan Jia Xin and Jesslyn Teo Yi En of Lee Hishammuddin Allen & Gledhill’s Tax, Customs & Trade Practice successfully acted for the taxpayer. At the heart of the case was a fundamental question of tariff classification: can Customs move a product out of the specific tariff code that describes it and into a residual, “catch-all” code? In this case, the CAT allowed the taxpayer’s appeals and set the reclassification aside.The EssentialsA specific heading beats a residual one. A residual “not elsewhere specified or included” heading is a last resort. It should not be used where a specific heading already describes the goods.The General Interpretative Rules apply in order. Rule 1 comes first, and the Rule 3(c) tie-breaker is reached only after Rules 3(a) and 3(b). Skipping the earlier rules to land on a preferred code invites challenge.Multi-component products may be classified as a whole. Where a product is supplied as parts to be combined before use, the parts may fall to be classified together rather than separately. This depends on the particular goods and headings.Evidence matters more than assumption. The taxpayer’s case was that Customs had classified the goods on its officer’s own reasoning, without a site visit or end-user data, while its own witnesses conceded key elements of the specific heading under cross-examination.BackgroundThe taxpayer manufactures and sells adhesive and construction-chemical products. The dispute concerned the classification, under the Customs Duties Order 2022 (“CDO 2022”), of three of its two-component cementitious waterproofing products (collectively, “Products”). Each product has a liquid component that is mixed on site with a cement-based component to form a coating, which is applied onto concrete and other building surfaces to make them waterproof.Customs gave the same component three different tariff codes in the space of about 14 months. It was first classified under sub-heading 3906.90.2000 (acrylic polymers), then under sub-heading 3824.50.0000 (non-refractory mortars and concretes), and finally, after the taxpayer applied for a review, under sub-heading 3824.99.9900 (other chemical preparations not elsewhere specified or included). Throughout, the composition, function and use of the component stayed the same. The taxpayer appealed to the CAT.The DisputeThe single question was whether the Products fell under one of two headings:Heading 32.14, which covers “non-refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like” (sub-heading 3214.90.0000), as the taxpayer contended; orHeading 38.24, a residual heading for “chemical products and preparations … not elsewhere specified or included” (sub-heading 3824.99.9900), as Customs contended. The Taxpayer’s CaseThe taxpayer’s position was that a residual heading cannot be used where a specific heading already covers the goods, and that the Products fell squarely within Heading 32.14. It advanced several grounds, each sufficient on its own:A residual heading is a heading of last resort. Heading 38.24 applies only to chemical preparations “not elsewhere specified or included”. By its own words it cannot be used where another heading describes the goods. Courts applying the same Harmonized System in other jurisdictions have said the same.Rule 1 already places the goods within Heading 32.14. Classification starts with Rule 1 and ends there if Rule 1 settles the matter. The Products met every element of Heading 32.14: they are non-refractory, they are surfacing preparations, they are applied to walls, floors and similar surfaces, and they are used for waterproofing. Customs’ own witnesses accepted each of these elements under cross-examination.Rule 3(c) was the wrong tool. Rule 3(c) selects the heading that appears last in numerical order. It is reached only when Rule 3(a) (the most specific description) and Rule 3(b) (essential character) cannot resolve the question. A Customs officer accepted that Heading 32.14 is the more specific heading for waterproofing products. Once that is accepted, Rule 3(a) decides the matter in favour of Heading 32.14 and Rule 3(c) never arises.Two components, but one classification. The Products are supplied as a liquid component and a cement-based component that are mixed on site. The goods in dispute were the liquid components. Customs placed them in the residual chemical heading (Heading 38.24), while it had classified two of the three corresponding cement-based components under Heading 32.14. The WCO Explanatory Note to Heading 32.14 deals expressly with preparations whose constituents are mixed at the time of use, and keeps them within Heading 32.14 where the constituents are “intended to be used together”, are presented together, and are complementary to one another. The Products meet each limb, so the liquid should be classified together with its cement-based component under Heading 32.14, not separated into the residual heading.The “visibility” objection does not hold. Customs’ main objection was that the coating is often tiled over and so does not remain visible as a finished surface, which it said took the Products outside Heading 32.14. But the Explanatory Note states only that such preparations “generally” remain visible, not that they always do. In many common applications the Products do remain visible, for example in water tanks, lift pits and planter boxes, and Customs’ own officer accepted, when shown the evidence, that on that use the Products could be classified under Heading 32.14. In any event, the Explanatory Notes are an aid to interpretation and do not have binding force.Assumption is not evidence. Customs reached its view on its own reasoning rather than on evidence. Its officer confirmed under cross-examination that she carried out no site visit, gathered no contractor or end-user data, held no statistics on actual use, and had no working background in the waterproofing industry. Customs’ PositionCustoms maintained that sub-heading 3824.99.9900 was correct. By the composition of the liquid component on its own, Customs accepted that the most specific heading would be Heading 39.06 (acrylic polymers). But because the liquid is meant to be used with its cement-based component, Customs assessed the goods as the combined mixture of cement, silica and acrylic polymer, and found that two headings could apply to that mixture: Heading 32.14 and Heading 38.24.Applying the General Interpretative Rules, Customs argued that, although Heading 32.14 gave a more complete description of the mixture, the components were sold and marketed together as a retail set, so the two headings were to be treated as “equally specific” under Rule 3(a). Customs added that the mixture could be left visible as a finishing layer or be tiled over, and that the two uses were of equal merit, so the classification could not be resolved under Rule 3(a). Under Rule 3(b), Customs said the essential character of the mixture was waterproofing, which the Explanatory Notes to both headings could cover. As neither Rule 3(a) nor Rule 3(b) resolved the matter, Customs turned to Rule 3(c) and selected Heading 38.24 as the heading appearing last in numerical order. Under Rule 6, Customs had first chosen sub-heading 3824.50.0000 (non-refractory mortars and concretes) but, on review, considered the mixture was not a mortar or concrete and reclassified it under sub-heading 3824.99.9900 as an “other” chemical preparation.The CAT’s DecisionThe CAT unanimously allowed all three appeals and set aside Customs’ rulings. The effect is that Customs’ reclassification of the Products under the residual Heading 38.24 no longer stands, and the taxpayer’s appeals succeeded in full.The CAT’s written grounds are anticipated to provide further clarity on the legal position. In the meantime, our key takeaways from the decision are set out below.What This Means for Your BusinessAlthough this appeal concerned waterproofing products, the principles it raises are relevant to any business that imports, exports or manufactures goods classified under the CDO 2022.Watch the catch-all. If your goods are being moved into a residual “not elsewhere specified” heading, ask first whether a specific heading already describes them.Insist on the right order. The General Interpretative Rules are applied in sequence. A classification that skips Rule 1 or Rule 3(a) and jumps to Rule 3(c) is open to challenge.Consider how multi-component products are assessed. Where a product is supplied as separate parts that are intended to be combined before use, there may be a question whether the parts should be classified together rather than separately. How they are described, presented and intended to be used can be relevant. The correct treatment depends on the specific goods and headings.Function over form. Essential character is judged by what the goods do and how they are used, not by their composition or paperwork alone. Concessions from the authority’s own technical witnesses can decide a case.Treat shifting classifications as a red flag. If the same unchanged product has been placed under different tariff codes over time, that inconsistency is worth examining closely. It does not, by itself, decide the correct code, but it is a sign that the classification should be reviewed.ConclusionThis is a welcome outcome for businesses. While the CAT’s full grounds are awaited, the result is a reminder that tariff classification should follow the established approach: a specific heading takes priority over a general one, the Interpretative Rules are applied in order, and the correct code turns on what the goods actually do rather than on the convenience of a residual heading. Any business facing a reclassification, an unfavourable Customs Ruling, or a change in Customs’ position should check carefully whether the correct heading and the correct method have been applied.This alert is prepared for general informational purposes only and does not constitute legal advice. Specific legal advice should be sought for any particular circumstances. If your business is facing a tariff classification dispute, an adverse Customs Ruling, or any other tax or customs dispute, please contact Jason Tan Jia Xin ([email protected]) or Associate Jesslyn Teo Yi En ([email protected]).