MALAYSIA Trends and Developments Contributed by: Dato’ Brian Law, Suaran Singh Sidhu, Chen Yun Jin and Ashwinathan Selvanathan, LAW Partnership
cant chooses to neglect such duties, the Malaysian courts are not shy in setting aside such an order dur - ing the inter partes stage. One of the safeguards in place would be the appoint - ment of a supervising solicitor to provide supervision over the execution of the APO. This safeguard was introduced in the High Court case of Makonka Elec- tronic Sdn Bhd v Electrical Industry Workers’ Union & Ors [1997] MLJU 93 and cited with approval by the Court of Appeal in the case of Arthur Anderson & Co. v Interfood Sdn Bhd [2005] 6 MLJ 239. A supervising solicitor is an independent and neutral party appoint - ed to observe the execution of the APO, explain the terms of the order (usually in a simple manner in order for the litigant to understand the terms), ensure pro - portional execution of the order and manage privi - leged protocols, if necessary (for example, in the event any potentially privileged material is obtained as a result of the execution of the APO, the supervis - ing solicitor can seal the material pending its further review by the court). The additional safeguard in place, including the appointment of a supervising solicitor as a neutral party, helps to ensure that there isn’t any conflating of civil compulsion with criminal power. Any failure to allow entry to the premises by the defendant leads to a possible contempt of court and even adverse infer - ence being drawn against the defendant. Reality of modern litigation Digital evidence is fragile, portable and erasable It cannot be denied that the primary rationale behind the granting of an APO in Malaysia to-date has only intensified in the digital era – especially now more so than ever when evidence tendered in court relates more towards digital evidence rather than physical evidence. As such, in modern times, digital evidence can be deleted in seconds or transferred across bor - ders at the click of a button, as was seen in the High Court case of N2N Connect Bhd & Ors v Chua Tiong Hoong & Ors [2023] MLJU 751 (although this decision was initially set aside by the Court of Appeal in Chua Tiong Hoong & Ors v N2N Connect Bhd & Ors and another appeal [2023] 6 MLJ 156, the Federal Court subsequently set aside the decision of the Court of
Appeal and reinstated the decision of the High Court in its entirety). Disk-wiping utilities, ephemeral messaging, end- to-end encryption, auto-deletion policies and cloud synchronisation create an environment where conven - tional discovery or preservation notices may be too slow or toothless. As such, the reliance on electronic data in the context of modern litigation, especially in matters involving intellectual property, makes orders such as an APO indispensable and we would argue that the legal practice in Malaysia aligns with this real - ity. Trade secrets and ex-employee scenarios demand speed Case law in Malaysia shows that the Malaysian courts are willing to aid an applicant by granting an APO not just in intellectual property matters but also disputes involving a breach of confidence. Often, such disputes involve an ex-employee or employees who were sus - pected of downloading client/customer lists, pricing models, logistics data and even source codes. The ex-employee(s) then proceed to incorporate a com - peting business based on the use of such confiden - tial information. The commercial reality is that when a competitor is already using such misappropriated material, serious damage is both imminent and can be difficult to quantify. In such scenarios, preserva - tion, be it by the seizing of devices or even physical documents, may be the only way to capture the data before any spoliation. Conventional relief can, at times, be inadequate Unfortunately, litigation operates on the belief or pre - sumption that parties will always act in good faith and provide their co-operation in any dispute. As such, some would argue that other interlocutory reliefs such as a discovery order, inspection orders or even provid - ing undertakings, render an APO redundant. However, we would argue otherwise. Where the risk of destruction is acute and where evi - dence sits solely in the defendant’s possession, wait - ing for an inter partes hearing can defeat the ends of justice. The very design of an APO is to preserve the status quo long enough for adversarial proceedings to occur meaningfully and for the court to have all the
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