Ramly Ali J:

This is an application by the 1st defendant (encl. 11) to set aside the plaintiff's writ of summon under O. 12 r. 7 of the Rules of the High Court (RHC) 1980, on the ground that this court does not have the jurisdiction to try this action.

Alternatively, the 1st defendant applies that the action be stayed on the ground that Malaysia is forum non-conveniens and that the action ought to be heard in Japan.

The grounds of the application are, among others, as follows:

(a) the plaintiffs' cause of action is based on an alleged trust arrangement entered into between the plaintiffs and the 1st defendant in Tokyo, Japan;

(b) the plaintiffs and the 1st defendant are Japanese Citizen and reside in Japan;

(c) the breach of the alleged trust arrangement occurred in Japan;

(d) the Malaysian High Courts lack prerequisite jurisdiction to try the action; and

(e) in the alternative, the more suitable and appropriate forum to try the plaintiffs' alleged claim would be the High Courts of Japan.

Facts Of The Case

The facts of the case as appear in the statement of claim are as follows:

The 1st plaintiff is the registered owner of 24,499 shares in the 2nd defendant and has an address at 1-32-16-602, Adachi-ku, Tokyo, Japan.

The 2nd plaintiff is the registered owner of 24,499 shares in the 2nd defendant and has an address at 706, 2-16-5 Kameari Katsushika-ku, Tokyo 125-006, Japan.

The 1st defendant is the registered owner of 50,998 shares in the 2nd defendant and has an address at 1-12-19 Minami Mizumoto, Katsushika-ku, Tokyo, Japan. By letter dated 27 August 2003, Messrs Lee Hishamuddin of Level 16, Menara Asia Life, 189, Jalan Tun Razak, 50400 Kuala Lumpur, solicitors for the 1st defendant have confirmed to the plaintiffs' solicitors that they have instruction to accept service of process on behalf of the 1st defendant.

The 2nd defendant is a company incorporated in Malaysia having its registered address and a place of business at Suites 7.21 & 7.22, 7th Floor, Imbi Plaza, Jalan Imbi, 55100 Kuala Lumpur, Malaysia.

The 2nd defendant is part of the Nikko group of companies. The group as a whole is in the business of the manufacture and sale of toys, dies and plastic products. The principal company, Nikko Co Ltd, is based in Japan but the group has affiliates and subsidiaries in Europe, the United States and Asia. Nikko Co Ltd is owned by the Hattori and Yamashita families.

The principal asset of the 2nd defendant is its shareholding in Nikko Electronic Berhad (NEB). NEB is in the business of the manufacture for export and sale of toys.

Both the plaintiffs are the registered owners of 24,449 shares each in the 2nd defendant, with an aggregate of 48,998 shares.

The 1st defendant is the registered of 50,998 shares in the 2nd defendant.

The entire shareholding structure of the 2nd defendant is as follows:

SHAREHOLDER NO. OF SHARES PERCENTAGE

Minoru Yamashita 50,998 50.9%

(1st defendant)

Kenichi Hattori 24,499 24.45%

(1st plaintiff)

Yuji Hattori 24,499 24.45%

(2nd Plaintiff)

Isao Hattori 1 0.05%

Mieko Hattori 1 0.05%

Hiromi Nakagawa 1 0.05%

Yasuharu Yamashita 1 0.05%

Isao Hattori is the plaintiffs' uncle and Mieko Hattori is their mother. The plaintiffs, Isao Hattori and Mieko Hattori are collectively referred to as "the Hattori Family".

Hiromi Nakagawa is the daughter of the 1st defendant, Hiromi Nakagawa and Yasuharu Yamashita are collectively referred to as the "Yamashita Family".

As can be seen from the shareholding structure of the 2nd defendant, the Hattori Family owns 49,000 shares which is 49% of the equity in the 2nd defendant while the Yamashita Family owns 51,000 shares which is 51% of the equity in the 2nd defendant.

The 2nd defendant was the owner of 49,600,000 share in NEB, which is 50.1% of its equity. Accordingly, the Yamashita Family indirectly owned 51% of the 49,600,000 shares in NEB and the Hattori Family indirectly owned the balance 49% of the 49,600,000 shares in NEB.

On or about 28 August 2001, the 1st defend