2010 MarsdenLR 3234
HIGH COURT, KUALA LUMPUR
SURUHANJAYA SYARIKAT MALAYSIA – Appellant
Versus
ISLES INTERNATIONALE UNIVERSITE (EUROPEAN UNION) LIMITED – Respondent
[Companies (Winding Up) No: D-28Ncc-90-2010]
The court held that a registered foreign company cannot be wound up under local law provisions due to lack of jurisdiction, classifying it as an unregistered company necessitating specific conditions for winding-up.
Headnote:(A) Companies Act - Sections 218(1)(m), 218(1)(n), 221(2)(e), 315, and 4 - Winding-up of a foreign company - The SSM lacks jurisdiction to file a winding-up petition against a registered foreign company under the provisions since it does not fall under the definition of 'company' - The term 'company' only applies to those incorporated under the Act - Respondent is deemed an 'unregistered company' under Section 314(1) - A foreign company could be wound up under Section 315 with specific amendments for jurisdiction - The statutory interpretation emphasizes a purposive approach to reading the Act - SSM's petition rejected due to jurisdictional limitations. (Paras 1-2, 16, 21-22)
Judgement Key Points
- The Respondent is a foreign company incorporated in Dublin, Republic of Ireland, and holds a Certificate of Registration of a Foreign Company (Form 83) under Section 332(1A) with Company No. 994097-M, confirming compliance with registration requirements. (!) (!)
- Section 332(1A) provides that the Registrar's certificate of registration for a foreign company is conclusive evidence of compliance with registration requirements. (!)
- Part XI, Division 2 of the Companies Act applies to foreign companies with a place of business or carrying on business in Malaysia, with penal provisions under Section 349 for non-compliance. (!)
- The issuance of a Certificate of Registration indicates the Respondent has a place of business in Malaysia. (!)
- The core issue is whether a registered foreign company can be wound up under Section 218(1) or other provisions of the Companies Act. (!)
- SSM conceded that Sections 218(1)(m) and (n) do not apply to the Respondent and sought amendment under Section 221(2)(e) and (f) or reliance on Section 315. (!) (!)
- Sections 218(1)(m) and (n) allow the Registrar (SSM) to petition for winding up a "company" used for unlawful purposes prejudicial to public order, morality, national security, or public interest. (!) (!) (!)
- "Company" is defined under Section 4 as a company incorporated under the Act or corresponding previous enactment, excluding the Respondent. (!)
- "Foreign company" is defined under Section 4 to include a body incorporated outside Malaysia, applicable to the Respondent. (!)
- Section 315 is in Part X, Division 5 on winding up of unregistered companies, while Section 218 is in Division 2 on court winding up. (!)
- Whether a foreign company qualifies as an "unregistered company" under Section 314 determines jurisdiction for winding up. (!)
- Respondent argued it is a registered foreign company outside Division 5, applicable only to unregistered foreign companies without a place of business in Malaysia. (!)
- Statutory interpretation requires a purposive approach per the Interpretation Act Section 17A, preferring constructions promoting the Act's purpose, considering the entire statute contextually. (!) (!) (!) (!)
- Section 314(1) defines "unregistered company" inclusively to include a foreign company, excluding companies incorporated under the Act. (!) (!) (!)
- Section 314(2) states Division 5 provisions are cumulative and additional to other winding-up provisions. (!)
- Section 315 applies Part X winding-up provisions to unregistered companies with adaptations: principal place of business as registered office, no voluntary winding up, and specific circumstances for court winding up (cessation of business in Malaysia, inability to pay debts, or just and equitable). (!) (!) (!) (!) (!) (!) (!)
- Section 315 does not specify petitioners, referring back to Section 217, but SSM's authority under Section 217 is limited to grounds in Sections 218(1)(m) and (n), which do not apply to foreign companies as they are not "companies," creating a jurisdictional gap for other grounds like just and equitable. (!)
- SSM lacks jurisdiction to present the winding-up petition against the registered foreign company under the relied provisions or any amendment. (!) (!)
| Table of Content |
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| 1. registered foreign company status under malaysian law. (Para 1 , 2) |
In this Winding-Up Petition, brought by the Suruhanjaya Syarikat Malaysia, under
Section 218 (1) (m) and (n) of the
Companies Act , the Respondent is a "foreign company" as defined under the Act. The Respondent has been issued a "Certificate of Registration of a Foreign Company" in Form 83 under
Section 332 (1 A) of the Act , with Company No. 994097-M. There is therefore no dispute that it is properly registered under Malaysia law, and the Certificate of Registration recognises that the Respondent is incorporated in Dublin, Republic of Ireland.
For completeness of analysis, Section 332 (1A) specifies:
"The Registrar shall issue a certificate in the prescribed form of every registration of a foreign company and the certificate shall be conclusive evidence that the requirements as to registration have been complied with."
This provision, it its to be noted, appears in Division 2 PART XI of the Act headed "Various Types of Companies." Division 2 is headed "Foreign Companies" and applies to a foreign company only where it "has a place of business" or "is carrying on business" within Malaysia. There are penal provisions imposed under Section 349 of Division 2 upon the foreign company, every officer of the company and every agent of the company for any default in complying with any provision of PART XI.
Since the Respondent has been issued with a Certificate of Registration, by virtue of Section 332 , it has to be acknowledged that it has a place of business in Malaysia, at the very least even though there could be some argument on whether it is in fact "carrying on business" in Malaysia.
The issue now raised before this Court, briefly stated, is whether a foreign company such as the Respondent, can be wound-up under Section 218 (1) or any other provision in the Act.
Counsel for SSM has conceded during these proceedings that Section 218 (1) (m) and (n) , the provision SSM had relied on at the outset, is not applicable to the Respondent, but SSM is presently relying on Section 221 (2) (e) and (f) which allows this Court, upon hearing the petition, and on the application of the Petitioner to allow the petition to be amended or "give such direction as to the proceedings as the Court thinks fit."
Section 218 (1) (m) and (n) , it is conceded, allows the Registrar (now the SSM) to petition the Court under Section 217 for "a company" to be wound up on the grounds in Section 218 (m) and (n) :
"(m) the company is being used for unlawful purposes or any purpose prejudicial to or incompatible with place, welfare, security, public order, good order or morality in Malaysia, or
(n) the company is being used any purpose prejudicial to national security or public interest."
Since Section 217 refers to "a company", it is then necessary to look at this term's statutory definition. "Company" is defined in Section 4 (the Interpretation Section) as meaning "a company incorporated pursuant to this Act or pursuant to any corresponding previous enactment." Obviously, the Respondent is not "a company" by statutory definition and therefore clearly falls outside the scope of Section 217 and 218 .
The Respondent is a "foreign company" as that term is defined in Section 4. "Foreign Company", according to this section means "(a) a company corporation society association or other body incorporated outside Malaysia" or "(b) an unincorporated society association or other body which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Malaysia." Definition (a) without doubt applies to the Respondent.
Counsel for SSM presently requests that this Court allows an amendment to the petition to substitute its reference to Section 218 (1) (m) and (n) for Section 315 (1) to confer the nece
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