UNITED OVERSEAS BANK (CHINA) LIMITED, CHENGDU BRANCH SIOW KWANG JOON @ SIOW KWONG SHANG (NO. KP: ************)

JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… IN THE HIGH COURT OF MALAYA AT JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM, MALAYSIA CIVIL SUIT NO: JA-22NCC-22-04/2019 BETWEEN UNITED OVERSEAS BANK (CHINA) LIMITED, CHENGDU BRANCH ....PLAINTIFF AND SIOW KWANG JOON @ SIOW KWONG SHANG (NO. KP: ************) ...DEFENDANT GROUNDS OF JUDGMENT ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 1 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… Introduction [1] This is an application (“this Application”) in enclosure 95 by the Defendant for a stay of execution of the judgment obtained by the Plaintiff in June 2020. The background facts [2] The Plaintiff, a licensed Chinese financial institution, by way of two letters of offer dated 27 December 2012 and 9 May 2014, granted financing facilities to a Chinese company, Foh Chong (Guangxi) Chemical Co. Ltd. (“FCGC”), for an amount up to RMB 92.5 million (“FCGC Facilities”). [3] The Defendant is a director of FCGC, and has an interest in it through his company, Foh Chong & Sons Sdn Bhd, where he is a shareholder. The Defendant executed a personal guarantee dated 9 May 2014 (“the Guarantee”) to secure repayment of the FCGC Facilities. FCGC defaulted in the FCGC Facilities since 31 January 2015, and in February 2019, the Plaintiff called on the Defendant’s obligation under the Guarantee. [4] The Plaintiff filed the Writ and Statement of Claim on 30 April 2019, and subsequently applied for summary judgment. On 25 June 2020, an order for summary judgment was made against the Defendant for the amount owing pursuant to the FCGC Facilities. The Defendant filed an appeal against that decision (“the Appeal”). ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 2 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… [5] On 12 August 2020, the Defendant filed this Application, which was allowed for the following reasons. The Law [6] The starting point for any application for stay is section 73 of the Courts of Judicature Act 1964 and Order 55 rule 16 of the Rules of Court 2012. The provisions read: Section 73 – Appeal not to operate as stay of execution An appeal shall not operate as a stay of execution or of proceedings under the decision appealed from unless the court below or the Court of Appeal so orders and no intermediate act or proceeding shall be invalidated except so far as the Court of Appeal may direct. **** Order 55 – Appeals to high court from subordinate courts Rule 16 – Stay of execution (1) An appeal shall not operate as a stay of execution under the decision appealed against… (2) The Court appealed from or the High Court may grant an order of stay of execution on such terms as it thinks fit [Emphasis added.] ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 3 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… [7] This was restated in the landmark case of Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 (“Kosma Palm Oil”). [8] This is an important curtain raiser to any application for stay as it is not an automatic right, but rather is left to the discretion of the Court, which must have in mind the right of the successful party not to be deprived of its fruits of litigation. Reference on this point is made to Kosma Palm Oil, Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116, and Leong Poh Shee v Ng Kat Cheong [1966] 1 MLJ 86. [9] The Court, therefore, will not deprive a successful party of the fruits of his litigation until an appeal is determined, unless the unsuccessful party can show special circumstances to justify it. What may amount to special circumstances is a question of fact in each case. [10] In order for the Court to exercise its judicial discretion to grant a stay of execution, the Defendant has to demonstrate the existence of special circumstances. This was clarified by the Federal Court Case of Kosma Palm Oil, which held that: It is therefore clear beyond doubt that there are many factors that may constitute special circumstances and the fact that an appeal would be rendered nugatory if stay was refused is the most common one. It is an example of special circumstances. In other words special circumstances is the genus of which nugatoriness is a species. If it has been shown that an appeal would be rendered nugatory if stay was refused what it means is that a special circumstance has been established. Thus they cannot be treated as separate heads and one cannot be an alternative to the other. ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 4 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… Neither can one be accepted or rejected in favour of the other as they are inter-related. … The onus is on the applicants to demonstrate the existence of special circumstances to justify the grant of a stay of execution. The reasons must relate to the enforcement of the judgment. They must be deposed in the affidavit filed in support of the application. [11] It is trite law, therefore, that the circumstances must be special, and neither ordinary, nor common. Contentions, findings, and evaluation [12] The Defendant submitted that the basis for the stay is found in Kosma Palm Oil, where it was stated by Augustine Paul JCA (as he then was): In Rosengrens Ltd v. Safe Deposit Centres Ltd (unreported, 19 July 1984, CA, Lexis Nexis) Dillon LJ said: The most common special circumstance is, normally no doubt, that it would be doubtful whether, if the judgment was enforced, the defendant would get his money back if the appeal subsequently succeeded. But there are others as, for instance, if there is a likelihood that the money the subject of the judgment, if paid over, would go to a foreign jurisdiction where the defendant would have difficulty recovering it. [Emphasis added.] [13] In the present case, it was undisputed that the Plaintiff is a foreign company incorporated under the laws of the People’s Republic of China (“China”) without assets in Malaysia. There is no reciprocal ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 5 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… enforcement of judgment agreement between China and Malaysia and this was evident from a perusal of the First Schedule to the Reciprocal Enforcement of Judgments Act 1958 (“Reciprocal Enforcement of Judgments Act”). In my view, therefore, there was indeed a real risk that the Defendant would not be able to recover the judgment sum from the Plaintiff in China, in the event he is successful in the Appeal. [14] The Plaintiff in resisting this Application, relied on an article by Ronald A Brand, titled ‘Recognition of Foreign Judgments in China: The Liu Case and the “Belt and Road” Initiative’ (“the Article”), to contend that a Chinese Court will consider several factors in determining whether to enforce a judgment. The Plaintiff further submitted that the burden was on the Defendant to show that, in the event he is successful in the Appeal, it would be difficult for him to recover the judgment sum from the Plaintiff in China. [15] A perusal of the Article, in my view, is indicative that there will in fact be difficulty in recovering the judgment sum, in the absence of a reciprocal enforcement of judgment agreement between China and Malaysia. This, therefore, falls neatly within the passage in Rosengrens Ltd v. Safe Deposit Centres Ltd endorsed by Kosma Palm Oil, and adopted in several other cases. The word ‘difficulty’ found in the passage in Kosma Palm Oil, did not indicate what level of difficulty it refers to. In attaching the ordinary meaning to the word ‘difficulty’, the Defendant, in my view, had established special circumstances by virtue of the difficulty in having to ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 6 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… recover the judgment sum from the Plaintiff, in the event he is successful in the Appeal. [16] The Plaintiff, had also relied on the Singapore Court of Appeal case of BMI Building Material International GmbH v Roberto Building Material Pte Ltd [1999] 1 SLR (R) 609, to submit that the circumstances relied on by the Defendant were not special, and should, therefore, be disregarded by this Court. [17] First and foremost, I am of the view that in an application for stay, all roads lead to Kosma Palm Oil. In any event, both parties had confirmed that the hearing of the appeal against the decision of this Court in allowing the Plaintiff’s application for summary judgment, was scheduled for hearing at the Court of Appeal for March 2021. I was, therefore, of the view that the Plaintiff would not suffer any prejudice by the granting of a stay. Furthermore, since the granting of a stay lies within the discretion of the Court, taking into account the comparative effect on the parties, allowing this Application, in my view, would be in the interest of justice. Conclusion [18] In the upshot, based on the aforesaid reasons, and after careful scrutiny of all the evidence before this Court, both oral and documentary, and submissions of both parties, this Application was allowed with costs in the sum of MYR5,000 (subject to allocatur fees). ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 7 JA-22NCC-22-04/2019 20 January 2021 ……………………………………………………………………………………………… Dated: 20 January 2021 ……SIGNED……… (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru Counsel: For the Plaintiff – Andrew Chiew Ean Vooi and Nicola Tang Zhan Ying; Messrs Lee Hishammuddin Allen & Gledhill For the Defendant – Ranjit Singh and KC Tho; Messrs KC Tho Cases referred to:  BMI Building Material International GmbH v Roberto Building Material Pte Ltd [1999] 1 SLR (R) 609  Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257  Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116  Leong Poh Shee v Ng Kat Cheong [1966] 1 MLJ 86.  Rosengrens Ltd v. Safe Deposit Centres Ltd (unreported, 19 July 1984, CA, Lexis Nexis) Legislation referred to:  Courts of Judicature Act 1964, section 73 ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 8 JA-22NCC-22-04/2019 20 January 2021 ………………………………………………………………………………………………  Rules of Court 2012, Order 55 rule 16  Reciprocal Enforcement of Judgments Act 1958, First Schedule Other sources referred to:  Ronald A Brand, titled ‘Recognition of Foreign Judgments in China: The Liu Case and The “Belt and Road” Initiative’, Journal of Law & Commerce (Vol 37, No 1 of 2018) ……………………………………………………………………………………………… EVROL MARIETTE PETERS JC 9