Maybank Investment Bank Berhad and Malayan Banking Berhad
Million Westlink Sdn. Bhd.
On 21.7.2020, the Court of Appeal allowed the appeal filed by Maybank Investment Bank Berhad and Malayan Banking Berhad (the Banks), against the High Court’s decision which had dismissed the Banks’ application to intervene in a judicial management proceeding filed by their debtor. Messrs Shook Lin and Bok represented the Banks.
The sole issue for determination was whether unsecured creditors have the locus standi to participate in judicial management proceedings and to oppose the making of a Judicial Management Order.
At first instance, the High Court had interpreted the provisions of the Companies Act, 2016 and also the Companies (Corporate Rescue Mechanism) Rules 2018, and held that the Banks as unsecured creditors did not have the necessary locus standi to intervene in and oppose the judicial management proceedings filed by the debtor company. It was held that only secured creditors had the locus standi to do so.
The Banks’ appeal was heard by the Court of Appeal on 22.6.2020. Its decision was reserved to be delivered on 21.7.2019, with the respective parties’ solicitors being granted leave to file further submissions on the interpretation of the various statutory provisions and rules as well as the purpose of the judicial management rescue mechanism.
In delivering its unanimous decision on 21.7.2020, the Court of Appeal held that unsecured creditors do have a right to participate in judicial management proceedings and to oppose the making of a judicial management order. The High Court decision was set aside. The Court of Appeal had stated that its grounds of judgment would be issued in due course.
This appellate decision has resolved the position of unsecured creditors, as prior to this, there have been conflicting High Court decisions on whether unsecured creditors may participate and be heard in a judicial management application.
The hearing before the Court of Appeal was conducted by our Ms Yoong Sin Min, together with Ms Ng Hooi Huang and Ms Denise Teoh.
|Yoong Sin Min
|Ng Hooi Huang