Step by Step: Comply with Multi-tiered Dispute Resolution Clauses

A recent High Court decision of Usahasama SPNB-LTAT Sdn Bhd emphasised the importance of complying with all the pre-conditions / conditions precedent of a dispute resolution clause before initiating arbitration.

Multi-tiered dispute resolution clauses are very common. They usually incorporate language referring to the need to hold “good faith negotiations”, to hold a meeting between certain higher management personnel first, or to attempt mediation or negotiation before parties can initiate arbitration.

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The Champion Arrives: Multiple Derivative Action in Malaysia

The High Court has recently upheld the existence of the multiple derivative action in Malaysia. This is seen in the decision of Ranjeet Singh Sidhu & Anor v Zavarco plc & Ors [2016] 2 CLJ 975 (and with the original Grounds of Judgment here).

A multiple derivative action is where a shareholder of a holding company files an action on behalf of the subsidiary of that holding company. This common law action would allow shareholders to seek relief against wrongdoings where there are wrongs carried out against subsidiaries further down the corporate structure.

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In the face of wrongdoings carried out against a company or its subsidiary, the law would clothe a suitably interested representative with the necessary standing to bring an action on behalf of the wronged company and to be the company’s champion.

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