Foreign Law – How and When to Raise?

Earlier this week, we appeared before the Federal Court and successfully obtained leave for 11 questions of law to address the rules and evidential requirements for raising foreign law.

This case concerned a counterclaim by a borrower against a local bank for breach of duty of care in selling secured property at an undervalue. The sale took place in Laos. The counterclaim was filed in Malaysia.

Despite the foreign element, the bank did not plead any reliance of Laotian law nor did it raise any argument or tender evidence of Laotian law. As a result, the High Court found liability in favour of the borrower based on Malaysian law; https://lnkd.in/g9zkM-is

On appeal, and after 12 years of litigation, the bank raised for the first time that Laotian law was applicable. The Court of Appeal (“CA”) accepted the bank’s argument and reversed the High Court judgment on the basis that it wrongly applied Malaysian law.

The CA judgment raised an interesting but unenviable conundrum as to whether a defendant was entitled to rely on foreign law without first pleading and proving the same at first instance. Following the leave granted by the Federal Court, the apex court will now be in a position to provide guidance on inter alia the following:

·     Whether reliance on foreign law has to be specifically pleaded?

·     If not pleaded, whether the court is entitled to apply Malaysian law

·     If foreign law is not proved, whether the court is entitled to presume that foreign law is the same as domestic law

·     Whether the double actionability rule, requiring the tort to be actionable both locally and in the jurisdiction it was committed, can be dispensed with if its rigid application is unjust and unfair.

The answer to these questions is important to the development of conflicts of law jurisprudence as it would likely shape the application and landscape of the rules of private international laws in Malaysia. Looking forward to the substantive appeal.

Our Alvin Tang, Ju-li Teo, Kang Zhen Leong acted for the applicants/borrower together with co-counsels Alex De Silva and Joshua Lawson Cowie from De Silva of Endeavour Group Law Practice.