RHB Islamic Bank Berhad

On the court record

An Islamic bank litigating summary judgment on financing defaults — engaging riba, ta'widh and Commodity Murabahah compliance — the setting aside of default judgments, and employee fiduciary-duty questions.

RHB Islamic Bank Berhad is an Islamic banking institution, and it appears in the corpus in the recovery litigation typical of a financier — summary judgment on Islamic financing facilities, the setting aside of default judgments, and questions of employee duties — mostly as plaintiff. The matters are in the High Court.

Summary judgment on financing defaults is the dominant theme, and it repeatedly engages the Shariah character of the facilities. In more than one suit the bank sought summary judgment on a default in the repayment of a Commodity Murabahah facility — in one instance together with a Multi Trade Line facility — the borrower disputing whether the arrangement involved riba or interest, the validity of ta'widh (compensation) charges, and whether the agreement complied with the Shariah concept of Commodity Murabahah, including a question over the production of the e-certificate issued by the commodity trading platform. A Malay-language matter concerned summary judgment under Order 14 on an Islamic facility under a working-capital guarantee scheme backed by the government-linked financing guarantee company.

The bank also litigated the setting aside of a judgment in default, where the application was filed a year and a half out of time and the court considered whether the delay was inordinate and unexplained, the test for a bona fide defence disclosing a triable issue, and the standard to be applied where a default was said to be tactical and deliberate. In a separate matter touching employment, the questions were whether an employee had engaged in a competing business during employment and whether fiduciary duties of loyalty and fidelity arose notwithstanding the absence of a written contract, together with the protection of confidential information and a customer ecosystem. Across these matters the bank's litigation combines the mechanics of Islamic-finance recovery with the doctrinal questions that distinguish it from conventional lending.