Dispute Resolution

  • April 14, 2026

    In Malaysia, a members’ meeting serves as the primary forum for decision-making by shareholders and the exercise of their rights.

    Generally, a member is entitled to request that a members’ meeting be held, subject to compliance with the requirements under the Companies Act 2016 (“CA 2016”) and the company’s constitution.

    These members’ meetings are vital because there are matters of utmost significance that often require sanction or approval from the members under, amongst others, the CA 2016. For example, under Section 223(1)(b) CA 2016, the disposal of a substantial portion of the company’s property is not to be carried into effect unless the disposal has been approved by the members.

    Quorum Requirements: The Potential Abuse

    Pursuant to S.328(1) – (2) CA 2016, the default requisite quorum for a members’ meeting is two members (save for a single-member company), unless otherwise provided in the company’s constitution.

    In a scenario where there are only two members, a deadlock may occur when one of the two members deliberately refuses to attend the meeting, thereby resulting in the lack of the requisite quorum for the meeting to convene.

    This will give rise to a decision-making deadlock.

    Pursuant to S.328(4) – (5) CA 2016, without the requisite quorum, no business shall be transacted, and the meeting shall be either dissolved or adjourned.

    What happens if a resolution is passed without the requisite quorum? 

    The Federal Court affirmed the Court of Appeal’s decision to validate the share issuances, but did so on a different basis – relying on the specific statutory provisions under S.63 and/or S.355 CA 1965.

    In Malaysia, it has been held by the Courts[1] that a meeting convened without the requisite quorum would be a nullity, rendering any resolution passed in the said meeting to be invalid.

    Without the requisite quorum to convene the meeting, this may jeopardise the company’s operation due to the inability to pass a resolution to, amongst others:

    • approve directors’ remuneration;
    • appoint the company’s auditor;
    • approve the company’s annual audited financial statements;
    • reappoint the directors who are retiring.

    What is designed as a procedural safeguard, if misused, may be deployed by a minority member as an instrument of obstruction capable of paralysing the company’s operations.

    Judicial Intervention: The “Impracticability” Test

    In such a scenario, an aggrieved shareholder cannot be left without recourse.

    Under S.314 CA 2016, the Court may order a meeting to be called in any manner that the Court thinks fit, including a direction that the presence of a single member shall be deemed to constitute a sufficient quorum. (See: S.314(2) & (4) CA 2016).

    That said, such a remedy is not available as of right. The Court generally expects the members to first exhaust the internal mechanisms under the CA 2016.

    Judicial intervention under S.314 CA 2016 will typically only be invoked where it is impracticable to convene or conduct a meeting in the usual manner (See: S.314(1) CA 2016).

    This raises the critical question: what amounts to “impracticable”?

    It has been held that impracticability is not narrowly confined. It will “cover a potentially wide range of factual situations, including but not limited to a case where the members have deliberately failed to attend a general meeting so that a proper quorum cannot be constituted…”[2]

    Quorum provisions, after all, are not intended to operate as a veto mechanism in the hands of a minority where a deadlock exists.

    In Tamabina Sdn Bhd & Anor v Nakamichi Corporation Berhad [2016] 10 CLJ 148, the Malaysian Court of Appeal held that:-

    “[22]… to show impracticability it is necessary to show evidence of attempts or efforts to call and hold a meeting and such attempts or effort have been futile. The reason for the futility in calling or holding a meeting must be attributed to some circumstances that make it almost impossible to hold the meeting. These circumstances could be due to a deadlock situation, an intentional un-cooperative attitude of the directors, a persistent effort to derail the meeting or deliberate non-attendance at meeting after a proper and valid notice had been issued so as to force the meeting to be called off for want of quorum. The categories of such reasons are never closed.”

    The Malaysian Courts have demonstrated a willingness to step in to exercise their power to order a meeting to be held as follows: –

    Lee Yee Wuen v Kien Yiap Trading [2020] 1 LNS 236

    • The Court affirmed that a minority cannot use the quorum provisions as a ‘veto’ to deny the majority’s rights.

    Abdul Halim bin Mutaref v ALM Autoserve Sdn Bhd & Anor [2023] MLJU 2358

    • The Court intervened where a shareholder’s acknowledged “deliberate refusal to attend the meeting” resulted in a lack of quorum, thereby creating an impasse.

    Golden Crescent v PDC Associates [2025] CLJU 915

    • Judicial intervention was warranted as the Court found strong evidence of a genuine deadlock arising from a member’s “systemic non-attendance at properly noticed meetings”.

    Key Takeaways

    Review the Company’s Constitution

    • Certain companies may have different provisions regarding the number of members required for a meeting to be convened. It is important to review the constitution before seeking to convene a meeting.

    Ensure that the documents to convene meetings are in order, and proper records of the same are kept

    • Parties who seek for a meeting to be convened must first ensure that they comply with the relevant requirements under the law and the company’s constitution. This includes, amongst others, ensuring that the notice of requisition is in order, properly issued and duly served.
    • Do keep a copy of the documents issued in relation to the proposed meeting, as they would be used as evidence for the purposes of an application under 314 CA 2016.

    Act Early

    • Prolonged governance paralysis may jeopardise the company’s operations.

    Alternative to Members’ Meeting: Written Resolutions

    Under the new CA 2016, members of a private company may pass resolutions by way of a written resolution, without the need to convene a members’ meeting. This is governed under, amongst others, S.297 to S.308 CA 2016.

    A key advantage to this mechanism is that it is not subject to the quorum requirement[3], unlike the resolutions sought to be passed in a members’ meeting.

    In the circumstances, where a company is unable to pass a resolution due to the inability to convene a valid meeting for want of quorum, it may consider utilising the written resolution procedure.

    This provides a practical alternative mechanism to effect members’ decisions without the need for a meeting.

    That said, this remains subject to the company’s constitution, which may modify or restrict the use of written resolutions and compliance with any applicable legal requirements.

    Looking Ahead: Other Possible Instances

    Quorum-related deadlock is only one of several challenges that may arise in convening meetings. Other scenarios where a meeting cannot be convened may include, amongst others, a director’s refusal to convene a meeting requested by the members – an issue we will explore in a future article.

    [1] Geointelligence Sdn Bhd v Azhar bin Hj Ismail & Anor [2022] MLJU 2881; Lee Nyuk Heng & Anor
 v Pembangunan Ladang Hassan Sdn Bhd & Ors [2002] MLJU 684
    [2] Tan Swee You v Sahiron bin Mohd Yunus & Anor [2021] MLJU 2244, para [28]

    [3] LGB Engineering Sdn Bhd & Ors v Rayston Resources Sdn Bhd [2023] 1 MLJ 649

    Prepared by: Nicholas Yap (Senior Associate)

    Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ litigation, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts and in domestic arbitration, providing strategic and commercially sensible solutions to complex legal challenges.

    If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

    Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

    If you found this article useful, please feel free to download the PDF document in the link here.

  • March 27, 2026

    A recent matter handled by our Dispute Resolution team was featured across several Malaysian news outlets.

    We represented the Prime Minister, YAB Dato’ Seri Anwar Ibrahim, in successfully striking out proceedings brought by P. Waytha Moorthy (“Plaintiff”) regarding the Prime Minister’s appointment and his position as the Member of Parliament for Tambun.

    In allowing our striking out application on 18.3.2026, the Kuala Lumpur High Court found, amongst others, that the Plaintiff’s suit was frivolous, vexatious, disclosed no reasonable cause of action, and constituted an abuse of the court process. While the High Court has delivered its decision, the matter remains subject to a potential appeal by the Plaintiff.

    The matter was handled by Ranjit Singh (Ranjit Singh & Yeoh), together with our Daniel Albert, and Nicholas Yap (Daniel & Wong).

    🔗 Media Coverage as below:

    Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ litigation, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts and in domestic arbitration, providing strategic and commercially sensible solutions to complex legal challenges.

    If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

  • October 9, 2025

    A recent matter handled by our Dispute Resolution team was featured across several Malaysian news outlets.

    We represented YB Syahredzan Johan, Member of Parliament for Bangi, in defamation proceedings successfully concluded before the Kuala Lumpur High Court on 22.9.2025.

    The matter was handled by our Daniel Albert, Nicholas Yap and Amanda Yap.

    Media coverage included major news outlets such as 𝘍𝘳𝘦𝘦 𝘔𝘢𝘭𝘢𝘺𝘴𝘪𝘢 𝘛𝘰𝘥𝘢𝘺, 𝘔𝘢𝘭𝘢𝘺 𝘔𝘢𝘪𝘭, 𝘉𝘦𝘳𝘯𝘢𝘮𝘢, 𝘕𝘚𝘛, 𝘔𝘢𝘭𝘢𝘺𝘴𝘪𝘢𝘬𝘪𝘯𝘪, 𝘉𝘦𝘳𝘪𝘵𝘢 𝘏𝘢𝘳𝘪𝘢𝘯 𝘢𝘯𝘥 𝘖𝘳𝘪𝘦𝘯𝘵𝘢𝘭 𝘋𝘢𝘪𝘭𝘺.

    🔗 Media Coverage as below:

    Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ litigation, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts and in domestic arbitration, providing strategic and commercially sensible solutions to complex legal challenges.

    If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

  • August 20, 2025

    Specific Statutory Provisions Prevail over the Common Law “Duomatic Principle”

    In family-run companies, corporate formalities are sometimes not strictly observed – for example, the issuance of shares to family members within the company.

    Recently, in 𝙒𝙏𝙆 𝙍𝙚𝙖𝙡𝙩𝙮 𝙎𝙙𝙣 𝘽𝙝𝙙 𝙫 𝙆𝙖𝙩𝙝𝙧𝙮𝙣 𝙈𝙖 𝙒𝙖𝙞 𝙁𝙤𝙣𝙜 & 𝘼𝙣𝙤𝙧, the Federal Court considered the Court’s power to validate share issuance made without the shareholders’ prior approval, in breach of S.132D of the Companies Act 1965 (CA 1965).

    While affirming the Court of Appeal’s decision to validate the share issuances, the Federal Court held that the validation should have been premised on the specific statutory provisions available – S.63 and/or S.355 CA 1965, not the common law “𝘋𝘶𝘰𝘮𝘢𝘵𝘪𝘤 𝘗𝘳𝘪𝘯𝘤𝘪𝘱𝘭𝘦”.

    This differed from the Court of Appeal’s reasoning, which ordered the validation based on the common law “𝘋𝘶𝘰𝘮𝘢𝘵𝘪𝘤 𝘗𝘳𝘪𝘯𝘤𝘪𝘱𝘭𝘦” (see: 𝘐𝘯 𝘳𝘦 𝘋𝘶𝘰𝘮𝘢𝘵𝘪𝘤 𝘓𝘵𝘥 [1969] 2 𝘊𝘩 365), which laid down the proposition that matters which were to be done formally may be done informally, provided that it was assented to by the members of the company.

    Brief Facts

    Three siblings (WKN, WKY and WKC) held equal shares in three family-owned companies. In 2005 and 2007, new shares were issued solely to WKN without the company’s approval in a general meeting. No objections were raised until after WKN’s passing in 2013.

    WKN’s widow then requested that the shares issued to WKN be registered in her name as the executrix of WKN’s estate. This was rejected. Legal proceedings were then initiated by WKY and WKC to nullify the share issuances due to non-compliance with S.132D CA 1965. WKN’s widow also initiated proceedings to validate the share issuances.

    Decision

    The Federal Court affirmed the Court of Appeal’s decision to validate the share issuances, but did so on a different basis – relying on the specific statutory provisions under S.63 and/or S.355 CA 1965.

    Key Factors Considered by the Court:

    • Admission that past issuances did not strictly comply with S.132D CA 1965;
    • Years of acquiescence via approval of directors’ reports and audited accounts;
    • 6–7-year delay before challenging the share issuances; and
    • No refund offered for the funds paid by WKN to subscribe for the shares.

    Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

    Please refer to the Grounds for the complete decision and reasoning. 

    https://danielwong.com.my/wp-content/uploads/2026/03/FC-WTK-v-Kathryn-GOJ-Validation-of-Shares.pdf

    Prepared by: Nicholas Yap and Amanda Yap

    Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ litigation, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts and in domestic arbitration, providing strategic and commercially sensible solutions to complex legal challenges.

    If you require advice or representation in a legal dispute, please reach out to our team via our contact page.