Case Study: Is It Possible For The Malaysian Court to Determine A Dispute Based On Foreign Law?

Can Malaysian courts determine a dispute based on foreign law? This question was briefly dealt with in the high court case of Atico Overseas Ltd v Procast Furniture Industry Sdn Bhd. We will briefly look into the case (TLDR, yes. The long version can be found below).

Brief facts of the case

Atico Overseas entered into two separate agreements with Procast Furniture Industry. The agreement is subject to the Hong Kong Sale of Goods Ordinance (this means that any dispute between the parties will have to be settled by relying on the laws of Hong Kong). In the agreements, Atico Overseas purchased certain goods from Procast Furniture Industry. Procast Furniture Industry will then deliver those purchased goods to an end purchaser in England. 

However, it was subsequently discovered that the goods were damaged and not usable. As a result, Atico Overseas has to pay compensation to the end purchaser as the goods have to be recalled. Atico Overseas also incurred additional costs to dispose of the damaged goods on behalf of Procast Furniture Industry. 

Atico Overseas then proceeded with suing Procast Furniture Industry for breaching the express/ implied terms of the agreement in the purchase orders.

The court allowed Atico Overseas application, as the agreements clearly spelled out Procast Furniture Industry obligation towards Atico Overseas in the situation above. 

The parties contention

Atico Overseas contended (amongst others) that the Malaysian courts have jurisdiction to deal with this dispute. Procast Furniture contended otherwise.

So what did the court say?

In coming to its decision, the court noted that:

1. The Malaysian courts can actually deal with disputes involving foreign law unless the foreign law does not observe any node of justice or decency. In fact, the court also noted that such idea:

“…is founded on the recognition that in proceedings having connections with more than one country an issue brought before a court in one country may be more appropriately decided by reference to the laws of another country even though those laws are different from the law of the forum court. The laws of the other country may have adopted solutions, or even basic principles, rejected by the law of the forum country. These differences do not in themselves furnish a reason why the forum court should decline to apply the foreign law.”

1. Foreign laws can be produced directly as ‘raw evidence’. In this regard, reference was made to:
   1. Section 38 of the Evidence Act, which states that Malaysian courts can form an opinion on the laws of other countries if such opinion is derived from any statement of that law contained in a book purporting to be printed or published under the authority of the Government of that country and any report of a ruling of the courts of that country contained in a book purporting to be a report of such rulings;
   2. Section 45 of the Act, which states that Malaysian courts can also form an opinion on the laws of other countries by relying on experts opinions; and
   3. Section 78(2) of the Act, which states that any copies of any form of laws (Acts, Statutes or Ordinance) passed by any Commonwealth countries and is purported to be printed by the Government Printer, shall be received in evidence by all courts in Malaysia without the need to prove how the copies were printed.

In terms of whether the books and copies of it purporting to record the law is a genuine copy, the court noted that:

1. 1. There is no need to prove the genuineness of books purporting to be printed by the Government Printer, shall be received in evidence by all courts in Malaysia/ the genuineness of reports of decisions of the courts of that country; and
   2. Section 86 of the Act states that The Malaysian court may presume that any certified copies of document of any judicial record not from any Commonwealth country are a genuine and accurate copy if such documents are certified by any representative of Yang di-Pertuan Agong in a manner that is commonly used in that country for certification purposes of such documents. 

And there you have it, hopefully, it helps!

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