[Page 1]
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
IN THE FEDERAL TERRITORY OF KUALA LUMPUR
ORIGINATING SUMMONS NO: WA-24NCC-322-07/2021
ORIGINATING SUMMONS NO: WA-24NCC-323-07/2021
BETWEEN
...PLAINTIFFS
AND
REPUBLIC OF ZIMBABWE
...DEFENDANT
BRIEF GROUNDS OF DECISION
[1] The decisions of the Court are as follows:
[Page 2]
[2] My broad grounds are provided below.
[3] Originating Summons No. WA-24NCC-322-07/2021 and
Originating Summons No. WA-24NCC-323-07/2021 are
referred to together as “the Originating Summonses”
below.
[4] The grounds below all relate to the decisions for the
Originating Summonses and respective Enclosures 11 of
the Originating Summonses except for paragraphs 66 to 72
which relate to the respective Enclosures 11 of the
Originating Summonses only.
[5] It is clear that the Court is mandated under the Convention
on the Settlement of Investment Disputes Act 1966
(Revised 1989) (“ICSID Act”) to recognise the award
rendered on 28.7.2015 (“the Award”) and the Decision on
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Annulment rendered on 21.11.2018 (“Decision on
Annulment”). Section 3 of the ICSID Act provides that an
award made by an arbitrator under the Convention on the
Settlement of Investment Disputes Between States and
Nationals of Other States (“the ICSID Convention”) is
binding and may be enforced as a decree judgment or order
of the High Court. The ICSID Convention itself, which is the
Schedule to the ICSID Act, also specifies that the award
shall be binding on the parties, and each contracting state
shall recognise and enforce the pecuniary obligations
imposed by the award within its territories as if it were a final
judgment of a Court in that state.
[6] The ICSID Act makes the provisions of the ICSID
Convention effective in Malaysia and designates the High
Court as the Court for the recognition and enforcement of
ICSID awards. The designated Court is required to
recognise the ICSID award and decision on annulment, and
the Award and the Decision on Annulment are considered
an award for recognition purposes.
[7] As long as the requirement of Article 54(2) of the ICSID
Convention is satisfied, which the Plaintiffs have done by
exhibiting a copy of the Award and the Decision on
Annulment certified by the Secretary-General of the ICSID
Centre, the Court is mandated to recognise the Award and
Decision on Annulment pursuant to the provisions of the
ICSID Act.
[Page 4]
[8] The Court also has the jurisdiction to recognise the ICSID
Award and Decision on Annulment. Section 23(2) of the
Courts of Judicature Act 1964 (“CJA”) confers jurisdiction to
the High Court “such other jurisdiction as may be vested in
it by any written law in force within its local jurisdiction.”
[9] In this case, the ICSID Act provides the necessary written
law that mandates the Court to recognise the ICSID Award
and Decision on Annulment as if it were a judgment or order
of the Court.
[10] The Defendant argued that Section 23 of the CJA does not
apply to this case, as none of the limbs mentioned under
Section 23(1) of the CJA apply as the dispute between the
parties has already been conclusively and finally
determined by the issuance of the Award and Decision on
Annulment. However, the Court finds that Section 23(2) of
the CJA, which provides for the High Court to have such
jurisdiction as may be vested in it by any written law in force
within its local jurisdiction, is applicable to this case.
[11] In Yong Teng Hing (t/a Hong Kong Trading Co) & Anor v
Walton International Ltd [2011] 5 MLJ 629, the Federal
Court held that the High Court possesses original
jurisdiction where it is expressly provided for by written law.
[Page 5]
[12] The Defendant submitted that it is immune from both the
present proceedings on the enforcement of the Award and
the Decision on Annulment and the enforcement and/or the
execution of the Award and Decision on Annulment against
the assets and/or properties of the Defendant in Malaysia
due to its status as a sovereign state.
[13] In this respect, the Defendant submitted that the Court
cannot exercise jurisdiction over it in these proceedings
because it has not submitted to the jurisdiction of the
Malaysian Court or waived its immunity.
[14] The Defendant also submitted that, the Court has no
jurisdiction over the Defendant as the Land Reforms
implemented by the Defendant in Zimbabwe giving rise to
alleged breaches of the Germany-Zimbabwe bilateral
investment treaty signed on 29.9.1995 (“German BIT”) and
the Switzerland-Zimbabwe bilateral investment treaty
signed on 15.8.1996 (“the Swiss BIT”) and forming the core
of the dispute between the Plaintiffs and the Defendant
were actions of a governmental or sovereign nature,
whereas the Court only has jurisdiction over actions of a
commercial or private nature of a foreign sovereign state.
[15] The Defendant further submitted that as the Defendant
does not have any commercial assets or properties in
Malaysia and the only assets in Malaysia are diplomatic
assets connected to its mission, it is not subject to the
jurisdiction of the Court. In this regard:
[Page 6]
[16] I do not accept the Defendant's submissions.
[17] The Plaintiffs in the Originating Summonses are seeking
recognition, not execution, of the Award and the Decision
on Annulment. Therefore, the consideration of immunity
from enforcement and execution is premature and should
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only be addressed when execution is sought, if raised by
the Defendant.
[18] In the New Zealand case of Sodexo Pass International SAS
v Hungary [2021] NZHC 371 it was held that a state, in this
case Hungary, cannot claim state immunity to prevent an
ICSID arbitral award from being recognised in domestic
courts. The Court must recognise the award as if it were a
judgment, but the state can still claim immunity from
execution processes. The Court has jurisdiction to make
decisions on immunity from execution, but only after the
award has been recognised. The concepts of recognition
and execution are different, and immunity from execution
does not apply to recognition. Article 55 of the ICSID
Convention does not make Hungary immune from the
jurisdiction.
[19] In Kingdom of Spain v Infrastructure Services Luxembourg
SARL [2021] FCAFC 3 the Australian Federal Court held
that the obligation to recognise an award under Article 54 of
the ICSID Convention was unaffected by questions of
immunity from execution, and that a proceeding seeking an
order to permit or facilitate enforcement of, or execution
procedures for, pecuniary obligations imposed by an award
was a species of recognition and could not be execution.
The order given by the Court gives the award the required
recognised status in the domestic legal system and is
equivalent to a domestic judgment and is enforceable as
such.
[Page 8]
[20] The Court accepts the view stated by the learned authors
Christoph H. Schreuer, Loretta Malintoppi, August Reinisch,
and Anthony Sinclair of The ICSID Convention: A
Commentary who commented on Article 54(3) of the ICSID
Convention stating that state immunity cannot be used to
prevent the recognition of an ICSID award, and state
immunity only applies when concrete measures of
execution are taken to enforce the award's pecuniary
obligations.
[21] The Plaintiffs seek for the reliefs in the Originating
Summonses premised upon the ICSID Act and the ICSID
Convention, which provide for recognition and enforcement
of ICSID awards in the same manner as a Court judgment.
[22] The ICSID Convention has different terms for the
recognition and execution of the award and decision on
annulment. Article 54 of the ICSID Convention requires
each Contracting State to recognise the award and decision
on annulment, while Article 55 states that this recognition
does not affect the law in force relating to the immunity of
the state from execution. Therefore, according to the ICSID
Convention, the consideration of sovereign immunity is
limited to the execution stage after the recognition of the
Award and Decision on Annulment as a final judgment of
the relevant Contracting State.
[Page 9]
[23] The words employed in Articles 54 and Article 55 of the
ICSID Convention are clear and this Court will give them
their natural and ordinary meaning without departing from
their plain meaning as there are no clear reasons for doing
so. See Hj Mostapa bin Asan, deceased) v Hulba- Danyal
bin Balia & Anor (as joint administrators of the estate of
Balia bin Munir, deceased) [2020] 4 MLJ 721 (Federal
Court).
[24] Regarding the question of the Defendant's submission to
the jurisdiction of the Malaysian Court or waiver of its
immunity, it is the finding of this Court that the Defendant
has, through its conduct, submitted to the jurisdiction of the
courts of every contracting state to the ICSID Convention
where the Award and Decision on Annulment are being
recognised. Moreover, the Defendant is considered to have
waived its immunity before the courts of every contracting
state where the Award and Decision on Annulment are
being recognised.
[25] On the subject of whether the Land Reforms are of a
governmental or sovereign nature, and with regard to the
Tribunal's ruling of jurisdiction, and in light of Articles 53(1)
and 54(1) of the ICSID Convention, the Defendant is
precluded from reopening the question of the Tribunal's
decision in the Award and Decision on Annulment. The
Defendant's reference to the Land Reforms and subsequent
implementation as acts of a sovereign and governmental
nature cannot be sustained. The Award and the Decision on
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Annulment are now final and binding on the parties and
must be recognised by all the Contracting States to the
ICSID Convention, including the Defendant.
[26] The Defendant submitted that the Court has no jurisdiction
over the Defendant, a foreign sovereign state, given that
there is no procedural framework legislated by Parliament
for the enforcement of ICSID awards. Section 3 of the
ICSID Act only states that ICSID awards can be enforced in
the same way as a Court order, without any specific
procedural mechanism.
[27] The contrast between the treatment of arbitration awards
and foreign judgments is highlighted by the Defendant in
relation to the procedural frameworks provided by the
Arbitration Act 2005 (“AA 2005”), the Arbitration Act 1952
(“AA 1952”), and the Reciprocal Enforcement of Judgments
Act 1958 (“REJA 1958”). Order 69 of the ROC 2012 only
applies to proceedings governed by AA 2005 and the
repealed AA 1952 and does not give the Court the powers
to enforce awards under the ICSID Act.
[28] The Defendant also contrasted the position in Malaysia with
that of other jurisdictions such as the United Kingdom and
Singapore where specific laws and rules have been enacted
to govern the registration and enforcement of ICSID
awards. In the UK, ICSID arbitration awards are governed
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by the Arbitration (International Investment Disputes) Act
1966 and the Civil Procedural Rules 1998 whereas in
Singapore this is governed by the Arbitration (International
Investment Disputes) Act 1968 and the Arbitration
(International Investment Disputes) Rules 2002 Chapter 11,
Section 6.
[29] The Defendant also argued that under Malaysian law, the
courts are only empowered to interpret laws passed by
Parliament and cannot use their inherent power to address
gaps in the law. The responsibility to legislate and remedy
any gaps in the law lies with Parliament. In support, the
Defendant cited Peh Chin Ping v Gan Ho Soon [2021]
MLJU 2001 (High Court), NKM Holdings Sdn Bhd v Pan
Malaysia Wood Bhd [1987] 1 MLJ 39 (Supreme Court) and
Sia Cheng Soon & Anor v Tengku Ismail bin Tengku
Ibrahim [2008] 3 MLJ 753 (Federal Court)
[30] I do not agree with the Defendant's submissions.
[31] The absence of a “procedural framework” does not preclude
the Court from exercising substantive powers conferred by
statute. The Court is permitted to adapt its existing
procedures to whatever extent is necessary to exercise the
substantive jurisdiction conferred upon it by statute. Regard
must be given to the Court's power to administer justice
which is a power of substance, not form.
[Page 12]
[32] The argument that the absence of a specified “procedural
framework" under the ICSID Act does not prevent the
recognition of the Award and Decision on Annulment is
supported by various Commonwealth authorities, which
include the following:
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jurisdiction, it is necessary to plead that jurisdiction
exists in some other Court.
[Page 14]
conferred by the statute does not depend on the
existence of rules unless the statute expressly
provides for the same.
[33] The jurisdiction of the Court to recognise the Award and the
Decision on Annulment under the ICSID Act is clear, and
the High Court has been designated as the competent
Court for recognition and enforcement of awards made
under the Convention under the instrument of ratification as
provided by Malaysia to the ICSID Centre.
[34] The lack of a procedural framework does not bar the
recognition of the Award and the Decision on Annulment
under the Originating Summonses as the substantive power
of the Court to recognise the Decision on Annulment has
been provided for under the ICSID Act. The Court's duty is
to interpret and enforce the laws enacted by Parliament,
and to expound the language of the Act in accordance with
the settled rules of construction, as stated in NKM Holdings
Sdn Bhd v Pan Malaysia Wood Bhd [1987] 1 MLJ 3920
(Supreme Court).
[35] The inherent powers of the Court are a separate and
distinct source of jurisdiction from statutory powers of the
Court. These powers are intrinsic to a superior Court and
are necessary to enable it to act effectively within its limited
jurisdiction. They are invoked in relation to the process of
litigation and are complementary to the powers specifically
conferred by the rules on the Court. The Court is free to
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exercise these powers towards the ends of justice or to
prevent the abuse of the process of the Court. The doctrine
of inherent jurisdiction should be exercised judiciously and
with flexibility, and should not be circumscribed by rigid
criteria or tests. See Stone World Sdn Bhd v Engareh (M)
Sdn Bhd [2020] 2 MLJ 208.
[36] The Court allows the Plaintiffs' application for recognition of
the Award and the Decision on Annulment as not doing so
based on the lack of a specified procedural framework
would undermine the substantive authority of the Court
under the ICSID Act and Malaysia's treaty obligations as a
contracting state to the ICSID Convention. The absence of
a specific procedural framework does not bar the
recognition of the Award and the Decision on Annulment, as
the Court can adapt its procedures to give effect to the
substantive powers conferred on it by statute. The Court's
declaratory jurisdiction is one of the widest application, and
its power to make a declaratory order is indeed unlimited,
subject only to the Court's own discretion, as has been well-
established in YAB Dato' Dr Zambry bin Abd Kadir & Ors v
YB Sivakumar a/l Varatharaju Naidu (Attorney General
Malaysia, intervener) [2009] 4 MLJ 24 (Federal Court).
[37] It is of note that in New Zealand, there is no specific
procedural framework or statute for the recognition of an
ICSID award or for service on a foreign state. Despite this,
the New Zealand High Court in Sodexo v Hungary was able
allow service of the originating proceedings on a foreign
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state under Order 6.27m of their High Court Rules 2016,
which permits service out of jurisdiction “when it is sought to
enforce any judgment or arbitral award” similar to our Order
11 rule 1(1)(M) of the ROC 2012.
[38] The Defendant submitted that these present proceedings
should be stayed, given that the applicable BITs under
which the ICSID Award was made expressly limit
enforcement to only Germany, Switzerland, and/or
Zimbabwe i.e. within the jurisdiction of the contracting states
to the BITs. The Defendant prays that the Court should stay
the present proceedings, as Malaysia is not the proper
forum for the claims and/or relief sought by the Plaintiffs.
[39] The provisions of the BITs stating that the arbitral award
should be enforced according to the domestic laws of the
Contracting Party where the investment is located are:
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Contracting Party where the investment in question
is situated.”
[40] I do not accept the Defendant's submissions on this point.
[41] Article 11(3) of the German BIT and Article 10(6) of the
Swiss BIT do not state that an investor can only enforce an
arbitration award in Zimbabwe. There is nothing in these
provisions to derogate from the waiver of sovereign
immunity that exists due to the Defendant's agreement in
the BITs to arbitrate disputes at ICSID and the terms of
Article 54(1) of the ICSID Convention.
[42] The subsequent sentence of Article 11(3) merely states that
if the Award and the Decision on Annulment is to be
enforced in Zimbabwe, it shall be enforced in accordance
with domestic laws of Zimbabwe but does not prevent the
enforcement of the award outside of Zimbabwe.
[43] Article 11(3) of the German BIT provides that the remedy
available is as provided in the ICSID Convention. The
subsequent sentence that the award shall be enforced in
accordance with the domestic law of the Contracting Party
in the territory of which the investment is situated does not
mean that the investor can only enforce an arbitration award
in Zimbabwe. The purpose of investment treaties is to
promote foreign investment, and the recognition and
enforcement mechanism under the ICSID Convention is a
core feature. If the award could only be enforced in the
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respondent state, this would nullify the purpose of
investment treaties. There is no language in the article that
prohibits the enforcement of the award outside of the
respondent state.
[44] In Article 10(6) of the Swiss BIT, there is no restriction at all
in this Article that limits the enforcement of the ICSID Award
and Decision on Annulment in Zimbabwe alone. Instead,
there is a recognition that the ICSID Award and Decision on
Annulment is enforceable in Zimbabwe in accordance with
its domestic laws.
[45] The absence of any reservation made by the Defendant to
restrict the terms of the ICSID Convention is significant, as it
means that the Convention can be enforced in any ICSID
Contracting State. This is reinforced by Article 70 of the
Convention, which specifies that the Convention applies to
all territories for which a Contracting State is responsible,
unless they have excluded them.
[46] The Defendant referred the Court to the Court of Appeal
case of World Triathlon Corporation v SRS Sports Centre
Sdn Bhd [2019] 4 MLJ 394 for the proposition that
Malaysian courts are required to enforce an agreed
jurisdiction clause, and a stay should be granted unless the
challenging party can demonstrate exceptional
circumstances justifying a refusal. However, this case is not
applicable as it dealt with agreements with “exclusive
jurisdiction clauses” while there is no such clause in this
[Page 19]
case. Instead, the ICSID Act enforces the ICSID Convention
which provides for the recognition and enforcement of
pecuniary obligations imposed by an ICSID award as if it
were a final judgment of a Court arising from treaty
obligations of nations under the ICSID Convention.
[47] In any event, the interpretation that the BITs expressly limit
enforcement of the awards to only Germany, Switzerland,
and/or Zimbabwe is not consistent with the Most Favored
Nation (“MFN”) clauses present in the agreements as the
effect of this interpretation would be the investments and
activities of nationals of Germany and Switzerland will be
treated less favorably than investments and activities of
third states. The MFN clauses are:
[Page 20]
[48] The BIT between the Netherlands and the Defendant does
not contain the equivalent of Article 11(3) of the German
BIT or the equivalent of Article 10(6) of the Swiss BIT.
Through the German and Swiss BITs MFN Clauses, the
Defendant made commitments to extend better rights to
investors from other countries to Swiss and German
investors. As there is no restriction in the Dutch BIT that
enforcement of the awards is limited to only Netherland
and/or Zimbabwe, the Plaintiffs, who are Swiss and German
investors, should not be subject to the restrictions in Article
11(3) of the German BIT and Article 10(6) of the Swiss BIT
as interpreted to by the Defendant.
[Page 21]
[49] The arbitration case of Emilio Agustín Maffezini v The
Kingdom of Spain (ICSID Case No. ARB/97/7) dealt with
this issue. The case concerns an MFN clause in the
Argentine-Spanish BIT, which provides that foreign
investors must receive treatment no less favorable than that
accorded to investors of a third country. The Chile-Spain
BIT allows investors to opt for arbitration without first
seeking redress in domestic courts. The tribunal concluded
that the MFN clause in the Argentine-Spanish BIT
encompasses the dispute settlement provisions of the
treaty, allowing the investor to submit the dispute to
arbitration without first accessing the Spanish courts, in
reliance on the more favorable arrangements contained in
the Chile-Spain BIT and the legal policy adopted by Spain
regarding the treatment of its own investors abroad.
[50] I am of the view that this approach is correct and adopt the
same by holding that the Swiss and German BITs MFN
clauses is applied to extend provisions of the Dutch BIT to
the protection of Plaintiffs' rights and interests as the
beneficiary of the MFN clauses. In this instance the Dutch
BIT relates to the same subject matter as the Swiss and
German BITs. I also do not see that there is any
contravention of public policy considerations in adopting this
approach.
[Page 22]
[51] The Defendant's position is that the Plaintiffs cannot enforce
the Award and the Decision on Annulment in Malaysia
against the Defendant's assets when the Plaintiffs have
failed to show assets or properties of the Defendant that
they can enforce in Malaysia when applying for the
recognition and enforcement of the ICSID Award and
Decision of Annulment as a judgment of the High Court.
The Defendant argued that the Plaintiffs' action is
speculative since the Plaintiffs failed to do any prior analysis
or investigation to disclose sufficient facts to enable the
Court to properly assess jurisdiction and merely relied on
media reports alleging that the deceased former President
of the Defendant and/or members of his family have assets
in Malaysia, which should be disregarded.
[52] The Defendant's argument that the Defendant lacks assets
in Malaysia or that the Plaintiffs have failed to show that the
Defendant has assets in Malaysia is irrelevant to the
Plaintiffs' right to seek recognition of the Award and the
Decision on Annulment and associated reliefs under the
Originating Summonses. Pursuing such relief is consistent
with both the ICSID Act and Malaysia's obligations as a
Contracting State to the ICSID Convention.
[53] In the Sodexo v Hungary case, the applicant had also failed
to provide evidence of Hungary's assets in New Zealand for
execution purposes. However, the New Zealand High Court
held identification of assets should not be required at the
recognition stage as there were good reasons to assume
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jurisdiction, including New Zealand's international obligation
to recognise the award, even if there was no evidence of
assets for execution. The Court also considered that
requiring a party to identify the assets they wish to proceed
against could potentially prejudice their ability to do so, so
the identification of assets should not be required at the
recognition stage. Issues regarding the extent to which
enforcement steps may be taken is an argument for another
day.
[54] The Defendant, relying on paragraph 938 of the Award,
argued that losses from the Border Estate cannot be
recovered by both the Von Pezolds Arbitration and Border
Arbitration, as there cannot be double recovery of the same
losses. The doctrine of double recovery is premised on the
principle that a party cannot be compensated twice for the
same loss.
[55] The Court finds that the Defendant's argument of double
recovery is without merit.
[56] The Tribunal in the Von Pezold Arbitration and the Border
Arbitration acknowledged that the von Pezold Claimants
and the Border Claimants had been granted the same relief
for the Border Estate. However, the Tribunal also noted that
their rights could not be jointly enforceable, and that
impermissible double recovery would only occur if one set
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of Claimants brought proceedings consecutively rather than
concurrently.
[57] There is no bar to the current proceedings based on the
ICSID Award, as no right has been enforced to make it
legally and materially impossible for the other set of
Claimants to pursue the same. Double recovery can only
occur if one set of Claimants has already obtained
restitution or compensation in respect of the Border Estate,
and the other set of Claimants pursues the same remedy
while ignoring the compensation already recovered.
[58] The ICSID Award recognised the Plaintiffs' entitlement to
pursue the current proceedings independently of the
claimants in the Border Companies Arbitration. As the
Defendant has not made any payment towards either the
Award or the Decision on Annulment to date, there has
been no impermissible double recovery on the facts.
[59] The Framework Agreement required Gusterheim Africa
Holdings Limited to transfer the Plaintiffs' entire interest in
the Border Companies into the Joint Venture in exchange
for a nominal consideration of US$1 and the issuance of B
Warrants. However, the purpose of the nominal
consideration of US$1 was to make the contract binding
under English law, and that the Framework Agreement
emphasised that the von Pezolds retained all rights of
action and claims for reparation and rights to any reparation
awarded, including restitution and compensation, in relation
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to the Von Pezold Arbitration and its subject matter.
Therefore, there was no assignment of any of the rights or
claims that are the subject of the Von Pezold Arbitration and
the Border Companies Arbitration.
[60] The Defendant had the opportunity to raise the impact of
the divestment point during the hearing of the Von Pezold
Arbitration, but chose not to do so. Therefore, it is too late to
raise this point now.
[61] The Defendant takes the position that the Order for Service
out of Jurisdiction for OS 322 and Order for Service out of
Jurisdiction for OS 322 for OS 323 both given by the Court
on 25.8.2021 (together, “the Orders for Service out of
Jurisdiction”) were not properly granted by the Court in
light of the lack of legislation with respect to service of
process on a foreign sovereign state in Malaysia. In this
regard the Defendant contended as submitted as follows:
[Page 26]
jurisdiction or expand its jurisdiction where none
existed before.
[62] I do not accept the Plaintiffs' position. Other jurisdictions
having specific legislation does not undermine the authority
of the Court to grant the Orders for service out of
Jurisdiction.
[63] The New Zealand High Court in Sodexo v Hungary allowed
service of originating proceedings on a foreign state to
enforce an ICSID award, despite the lack of a specific
procedural framework or statute for such recognition or
service. The court relied on Order 6.27m of their High Court
Rules 2016, which permits service out of jurisdiction for the
enforcement of any judgment or arbitral award, similar to
Order 11 rule 1(1)(M) of the ROC 2012.
[64] As stated above, the Court can exercise its inherent
jurisdiction to give effect to the Award and Decision on
Annulment and ensure that Malaysia fulfills its treaty
obligations under the ICSID Convention. Therefore, it is
possible to resort to to Order 11 rule 1(1)(M) ROC 2012 so
as to permit service of the Originating Summonses and the
Plaintiffs' Affidavit in Support on the Defendant since what is
at hand is originating process “to enforce or set aside a
judgment or an arbitral award”. In this regard, the
Originating Summonses are claims that seek to enforce
both a judgment and an arbitral award. The Award and the
Decision on Annulment are awards given by the arbitrator
[Page 27]
under the ICSID Act and viewed as a final judgment in each
Contracting State (including Malaysia). Order 11 rule
1(1)(M) of the ROC applies to the enforcement of a
judgment as well as an arbitral award, and is not limited to
enforcement under the Arbitration Act 2005.
[65] Quite apart from Order 11 ROC 2012 which confers
jurisdiction on the courts, Section 23 of the Civil Jurisdiction
Act (CJA) also provides an independent source of
jurisdiction for the courts. It was held by the High Court in
Goodness For Import And Export v Phillip Morris Brands
Sarl Goodness For Import And Export v Phillip Morris
Brands Sarl [2016] 5 MLJ 171 although the defendant was
a foreign entity, the High Court had jurisdiction over it
through Order 11 ROC 2012 and the conferment of such
jurisdiction was implicit in connection with the granting of
leave by the High Court for service out of jurisdiction as
Section 23(1) of the CJA also confers extra-territorial
jurisdiction on the High Court independently of Order 11
ROC 2012. Therefore, this Court has the jurisdiction to
consider the Plaintiffs' Application for Leave and to issue
the subsequent Orders for service out of Jurisdiction under
Order 11 rule 1(1)(M) ROC 2012.
[66] The Defendant argued that the order granting the leave
should be set aside because the Plaintiffs have failed to
make full and frank disclosure of relevant facts and
[Page 28]
documents by not producing the relevant German BIT and
Swiss BIT with particular attention to Article 11(3) of the
German BIT and Article 10(6) of the Swiss BIT. The
Defendant also argued that even if they had disclosed the
BITs, they were also obliged to explain their relevance and
materiality to the High Court which they had failed to do. As
a result, the High Court was not presented with all the
relevant and material facts to decide whether it had
jurisdiction to grant leave.
[67] The Defendant submitted that full and fair disclosure of all
relevant and material facts is necessary in an ex parte
application for service of a writ out of jurisdiction, and cited
several authorities to support their position. The Defendant
also highlighted that failure to disclose such information can
lead to material non-disclosure of relevant facts and result
in setting aside an ex parte order. The cases of Cantrans
Services (1965) Ltd v Clifford [1974] 1 MLJ 141 (Federal
Court) and Koperasi Permodalan Felda Malaysia Berhad v
Alrawda Investment For Real Estate Development &
Projects Management Co Ltd & Anor [2019] 7 MLJ 647
(High Court) were specifically referenced to illustrate these
points.
[68] The Defendant also submitted that the Plaintiffs have failed
to make full and fair disclosure when it did not disclose or
identify any assets and/or properties of the Defendant that
are allegedly in Malaysia. In particular, the Plaintiffs failed to
draw the attention of the Court that the only assets which
[Page 29]
the Plaintiffs were relying on, were rumors of no probative
value about assets and/or properties which the deceased
former President of the Defendant and/or members of his
family are alleged to have acquired decades ago in
Malaysia.
[69] I do not accept the contentions of the Defendant above.
[70] In the Plaintiffs' Application for Leave, the Plaintiffs have
placed before the Court all the relevant and material facts
for the purposes of the Leave Application. The Orders for
service out of Jurisdiction were properly granted by the
Court with with due consideration of all material facts
related to this matter.
[71] The Plaintiffs' non-disclosure or failure to identify any assets
of the Defendant in Malaysia is irrelevant to the Plaintiffs'
right to seek recognition of the Award and the Decision on
Annulment and associated reliefs under the Originating
Summonses and therefore cannot be regarded as the
Plaintiffs' failure to make full and fair disclosure of material
facts for the purposes of obtaining the Orders for service out
of Jurisdiction.
[72] Similarly, there is no failure by the Plaintiffs to make full and
frank disclosure of relevant facts and documents in respect
of the German BIT and Swiss BIT as the BITs do not limit
enforcement to only Germany, Switzerland, and/or
Zimbabwe.
[Page 30]
17 February 2023
-sgd-
ATAN MUSTAFFA YUSSOF AHMAD
Judge
Kuala Lumpur High Court NCC1
(Commercial Division)
Counsel:
| For the Plaintiffs: |
John Mathew with Sabin Ann Thomas (Messrs. Christopher & Lee Ong) |
| For the Defendant: |
Nitin Nadkarni with Soh Zhen Ning (Messrs. Lee Hishamuddin Allen & Gledhill) |