EXPORT-IMPORT BANK OF MALAYSIA BERHAD v 1. ) CHAN TOH PEW 2. ) AMY LAU SIU YIN 3. ) HO WAI LOONG

Case Significance

A useful application of the forum-conveniens factors under Order 57 Rule 1 of the Rules of Court 2012 and section 23 of the Courts of Judicature Act 1964, transferring a guarantee suit to the court where a substantially connected related action was pending to avoid inconsistent decisions.

This decision of the High Court of Malaya at Kuala Lumpur (Commercial Division) concerns an application to transfer proceedings from one High Court to another of coordinate jurisdiction, made under Order 57 Rule 1 of the Rules of Court 2012 and section 23 of the Courts of Judicature Act 1964. The plaintiff, Export-Import Bank of Malaysia Berhad (EXIM), had granted a term loan facility under an overseas project financing arrangement to a borrower company, and the defendants had executed a guarantee agreement jointly and severally guaranteeing the borrower's obligations. When EXIM sued the guarantors in the Kuala Lumpur High Court (Suit 787), the first and second defendants applied to transfer the suit to the Ipoh High Court, contending that it could more conveniently and fairly be tried there.

The court examined the principles governing transfer between courts of coordinate jurisdiction, including whether the proceedings could be more conveniently or fairly tried in another court, the weight to be given to a defendant's place of residence, and whether the pendency of related proceedings elsewhere and forum conveniens considerations justified a transfer. It concluded that transfer was warranted. There was a substantial nexus between Suit 787 and proceedings already pending in the Ipoh High Court (in particular a related Suit 1), the determination of which might directly affect the outcome of Suit 787; having all the related matters heard by the same court would serve the interests of justice by avoiding the risk of inconsistent judicial decisions; and any inconvenience to the plaintiff would be minimal compared with those benefits, the Ipoh High Court having the closest nexus to the dispute. Balancing these factors, the court was satisfied that Suit 787 could be more conveniently and fairly tried in Ipoh, and it allowed the application to transfer. The judgment is a useful application of the forum-conveniens factors to an inter-court transfer of related guarantee proceedings.