GILS Dispute Resolution: Malaysia (2026)

Wajdi bin Mohamad

CASE №1:

Represented an advisor to 71 petitioners/lenders in a class winding-up action against a borrower company based on undisputed debt of MYR 24,127,590.00. The debt arises from loan agreements disguised as investment agreements and Islamic Redeemable Preferential Shares (IRPS).  The borrower signed agreements that are disguised as investment agreements whereas in actual fact they are loan agreements that it had committed to pay the lenders fixed interest in accordance with a fixed schedule and undertook to refund the principal borrowed amount on a maturity date. On default of the payment and refund, the borrower had approached several lenders to extend the maturity dates and issued post dated cheques to a lender (that were later returned for insufficient funds).  In opposing the winding-up petition the borrower argued inter alia that the Petition is premised on a debt that is disputed on substantial grounds because the payment of the dividends (not interest) was merely expected and not guaranteed and that the borrower may only pay dividends when it is solvent and any payment of dividends to the lenders would contravene section 131 of the Companies Act 2016. In rebuttal to the first argument above, we argued the lenders were promised guaranteed returns pursuant to the express provisions of the loan agreements, the borrower had admitted to the lenders when it had requested extension and issued dishonored cheques to a lender. On the second argument above, we argued there is no evidence adduced that that the borrower is incapable of distributing dividends to the lenders. On the contrary, the borrower made preferential payments to several other lenders (who are not parties to this action).

CASE №2:

Successfully represented joint administrators for undertaking administration and distribution of several million worth of estates for the children of former business tycoon (“the Deceased”) and defended a citation and probate action initiated by the administrators from an application to strike out the citation.

The joint administrators mounted a contested probate action against the estate of the son of the Deceased to revoke the Grant Letter of Administration to the estate and recover three properties held on trust by the son for him. For initiating this action, the administrators applied for a citation to be issued by the Court for requiring the administrators of the son's estate to to bring into and leave at the Grant.

Almost immediately after surrendering the Grant, the administrators of the son's estate sought to strike out the citation on the basis inter alia that the administrators of the Deceased ("Citators") did not have legal interest and locus standi to apply for the citation. They also argued that the issues raised by the Citators, including marital status, Faraid (Islamic rules of inheritance) Orders, heirship and separable property, are within the exclusive jurisdiction of the Syariah Court and therefore cannot be decided by this Honourable Civil Court.

Upon hearing the arguments by both opposite administrators, the High Court held that it is bound by the trite law as enunciated by the Federal Court (Supreme Court) that in accordance with Order 72 Rule 8(2) the Rules of Court 2012, the procedure for applying for a citation has been clearly provided for, namely by filing an Affidavit Verifying the Statements of Fact in contentious probate proceedings. Therefore, the procedure is statutorily required and must be followed as outlined by law. The court then dismissed the striking out application with cost.