MALAYSIA Law and Practice Contributed by: Shelina Razaly Wahi and Vincent Chan Siew Onn, Abdullah Chan & Co
2.6.4 Summary Judgment or Other Relief It is possible to obtain a summary judgment, equita - ble or other injunctive relief pending final resolution of judicial proceedings to enforce an aircraft lease. In relation to a monetary judgment, if matters are clear- cut, parties may opt for summary judgment to expedite proceedings and reduce costs. The court evaluates the claim based on the claimant’s affidavit(s) without the need for a trial or witness examinations, typically concluding within six to eight months. However, in complex cases and/or where the remedy sought is not merely restricted to a monetary judgment, the lessor must prepare for a full trial. The granting of summary judgment depends on various factors, including the presence of triable issues or a defence in the case. In the Malaysian context, seeking aircraft posses - sion through a mandatory injunction may significantly expedite the process, typically taking about six to eight weeks for an ex parte injunction compared to nine to 18 months for a full trial. 2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments Malaysian courts will uphold and give effect to the governing law chosen by the parties to a contract. The expressed intention of the parties as to the laws governing the contract will be regarded as the proper law of the contract. A lease agreement governed by a foreign law will therefore be recognised and enforced by a Malaysian court, provided the application of the foreign law is not in opposition to (Malaysian) public policy and that the choice is bona fide and legal. Malaysian courts will uphold the submission to a foreign jurisdiction – the domestic court should not interfere with the foreign court’s determination save in exceptional circumstances where the foreign pro - ceedings are vexatious or oppressive. Companies are not generally entitled to immunity from suit. A party may waive its entitlement to sovereign or other immunity from suit by contractually agreeing to the same.
However, reinsurances up to 100% coverage cannot be placed outside Malaysia. 2.5.4 Enforceability of “Cut-Through” Clauses A “cut-through clause” is valid and enforceable in Malaysia, as having been agreed commercially between the parties. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurance/reinsurances are permitted. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities There are no restrictions on a lessor’s ability to: • terminate the leasing of an aircraft, • re-export the aircraft, and/or • sell the aircraft following such termination, subject always to these matters being provided for in the lease itself. It is recommended that a lessor/financier obtain a deregistration power of attorney as well as an IDERA upfront at the commencement of a lease. The aircraft does not need to be physically located in Malaysia at the time of any such action(s). 2.6.2 Lessor Taking Possession of the Aircraft A lessor can take physical possession of the aircraft without the lessee’s consent in accordance with the Cape Town Convention, which Malaysia has ratified. However, in Malaysia the practice is that lessors will usually seek a court order prior to obtaining physical possession of an aircraft. 2.6.3 Specific Courts for Aviation Disputes There are no courts in Malaysia that deal specifically with aviation matters/disputes. In general, aviation disputes have been adjudicated by the civil courts, in particular the Commercial High Court. A recent case is AirAsia X Berhad v BOC Aviation Limited and 14 Oth- ers [2021] LNS 188, which considered and determined the first ever legal dispute that involved issues pertain - ing to the applicability of the Cape Town Convention in Malaysia.
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