MALAYSIA Law and Practice Contributed by: Shelina Razaly Wahi and Vincent Chan Siew Onn, Abdullah Chan & Co
3.4.8 Judgments in Foreign Currencies Malaysian courts generally do not issue judgments in foreign currencies. Any judgment or order sought in a foreign currency will be converted to an equivalent amount in Malaysian currency. 3.4.9 Taxes/Fees Payable A secured party is not required to pay taxes or fees in a non-nominal amount in connection with the enforce - ment of a security agreement/aircraft mortgage. 3.4.10 Other Relevant Issues There are no other relevant issues that a lender should be aware of in relation to the enforcement of its rights. 4. Other Issues of Note 4.1 Issues Relevant to Domestic Purchase, Sale, Lease or Debt Finance of Aircraft Please refer to 2.10.4 Enforcement of Conventions . Specifically, in the case of AirAsia X Berhad v BOC Aviation Limited and 14 Others [2021], the High Court declared, inter alia, that lessors are unsecured credi - tors notwithstanding that the lease documents pro - vided for security deposits and maintenance reserves to be held by the lessors. Security deposits and main - tenance reserves paid pursuant to lease agreements are regarded, subject to the specific language used in the lease documents, as the absolute property of the lessors and not securities over the assets of AirAsia X. As such, the security deposits are considered as being the property of the lessors. 4.2 Current Legislative Proposals The Malaysian Aviation Commission (Dissolution) Act 2024 and the Civil Aviation Authority of Malaysia (Amendment) Act came into force on 1 August 2025. With the merger between CAAM and MAVCOM, CAAM has taken over MAVCOM’s economic regula - tory functions and is now solely responsible for the technical, safety and economic oversight of the avia - tion industry in Malaysia.
sion. The lessee might resist the repossession, and CAAM will likely require evidence of the default, espe - cially if there are changes to be made in the Aircraft Register. Without a court order, the lessor or lender might struggle to obtain the necessary documents and clearances from CAAM to continue operating the aircraft after a default. Notably, there has been no precedent in Malaysia where a lessor, owner or lender was barred from deregistering and removing an aircraft from the coun - try. Nonetheless, taking possession without a court order carries litigation risks, such as potential lawsuits from aggrieved passengers if the repossession is later deemed wrongful. 3.4.6 Domestic Courts Competent to Decide on Enforcement Actions There are no courts dealing specifically with aviation matters/disputes. Aviation matters/disputes are typi - cally adjudicated by the Commercial Division of the Civil Courts and will usually, due to the quantum of the claims and/or the nature of the remedies sought, be heard in the High Courts. 3.4.7 Summary Judgments or Other Relief In court proceedings, it is generally possible to seek and obtain monetary damages through a summary judgment process; and an injunction pending the court’s final decision. Obtaining possession of an air - craft through a mandatory injunction process can also be much quicker, taking about six to eight weeks for an ex parte injunction compared to nine to 18 months for a full trial. A summary judgment may be applied for, in straight - forward and clear-cut disputes. The court will decide the claim based on the claimant’s affidavits with - out a trial or witness examinations. The decision to grant summary judgment depends on factors such as whether there are triable issues or a defence in the case. In the event of an application for an equitable or other injunctive relief, there is no automatic requirement for bond or guarantee to be provided, subject to the relief applied for.
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