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2010 MarsdenLR 22
K ANANTHAM
SYARIKAT SYED KECHIK HOLDINGS SDN BHD – Appellant
Versus
SYED GAMAL SYED KECHIK AL-BUKHARY – Respondent
The Syariah Court lacks jurisdiction in matters concerning company law related to preference shares, which must be resolved in civil courts.
Headnote:(A) Syariah Court Civil Procedure (Federal Territories Act 1998) - Sections 199 and 200 - Jurisdiction of Syariah Court - Preference shareholder rights - Court ruled that the Syariah Court lacked jurisdiction to grant injunctions regarding company law matters relating to preference shares, which should be determined by civil courts. The court affirmed that the interest of the defendant in the first plaintiff does not extend to its equity as preference shares carry no voting rights or equity participation. (Paras 4, 5, 6)
(B) Jurisdiction - The core issue of jurisdiction was pivotal, emphasizing the distinction between matters of Syariah law and non-Syariah legal grounds in determining deceased estates. The court ruled that contradictions about a deceased's estate necessitate a civil court's determination when company law is involved. (Paras 6, 7)
Facts of the case:
The plaintiffs are children of the deceased, claiming he held only preference shares without equity rights. The defendant, recognized as a beneficiary by the Syariah Court, contested this and sought discovery orders.
Findings of Court:
The Syariah Court’s injunction regarding company matters was deemed unjustifiable as preference shares do not confer equity interest, requiring civil court jurisdiction. The plaintiffs’ petition was thus upheld.
Issues: Whether the defendant, as a preference shareholder, possesses any equity interest in the first plaintiff and the jurisdictional limits of the Syariah Court.
Ratio Decidendi: The court concluded that matters regarding preference shares are outside the Syariah Court's jurisdiction, necessitating resolution in civil court. Further determination of the rights attached to preference shares was advised to involve both court systems.
Result: The plaintiffs were granted the injunction they sought, and the defendant was ordered to pay costs.
| Table of Content |
|---|
| 1. details of beneficiaries and shares (Para 1 , 2) |
| 2. arguments on jurisdiction and share rights (Para 3) |
| 3. court’s analysis on jurisdictional issues (Para 4 , 5 , 6 , 7 , 8) |
| 4. conclusion on plaintiffs' injunction request (Para 9) |
K Anantham:
[1] The second and third plaintiffs are the children of the late Tan Sri Dato Syed Kechik @ Syed Bakar bin Syed Mohammad (the 'deceased'). The defendant is a child by a previous marriage. The 1st plaintiff is a company originally founded by the deceased and presently managed by the Second and third plaintiffs as its only directors. According to the second plaintiff, the deceased did not own any ordinary shares in the first plaintiff but owned 100,001 preference shares. The second plaintiff avers in para. 5(vii) of her affidavit filed in support of the application for an injunction (encl. 3), that the deceased as a preference share holder was only entitled to dividends at the fixed rate of 8pa, as and when, declared by the 1st plaintiff. The preference shares, according to her, carried no right to the equity of the first plaintiff or any voting rights. Apparently, the articles of association of the first plaintiff also absolved the first plaintiff from providing any notice of general meeting of the first plaintiff and its financial statements to preference share holders. These averments of the second plaintiff have not been disputed by the defendant.
[2] On 31 July 2009, the defendant applied and obtained the Sijil Fara'id from the Kuala Lumpur Syariah Court whereby he was recognised as a beneficiary of the estate of the deceased and accorded a 44% share as the only male heir of the estate. The second and third plaintiffs and the widow of the deceased are the only other beneficiaries under the Sijil Fara'id. The second and third plaintiffs, in turn, filed Petition No. S31-668-2009 in the High Court in Kuala Lumpur to obtain the letters of administration to administer the estate of the deceased. This application which was filed in September 2009 is still pending disposal. The defendant upon being confirmed as a beneficiary in the Sijil Fara'id caused letters to be written to the second and third plaintiffs seeking information concerning the 1st plaintiff including a request that he be allowed to inspect the documents of the first plaintiff. These demands were not met by the second and third plaintiffs to the satisfaction of the defendant. This prompted the defendant to file an ex parte application for an injunction and discovery orders with the Syariah Court. The Syariah Court duly restrained the second and third plaintiffs from selling or otherwise dealing with 44% of the first plaintiff and undertaking any action which could result in the devaluation of the current value of the 1st plaintiff. A further order issued by the Syariah Court entitled the defendant to enter into all the immovable properties owned by the 1st plaintiff for the purpose of enabling the defendant to inspect the assets and documents of the first plaintiff and thereby determine the value of the shares of the defendant in the first plaintiff. The orders being valid until the outcome of the second and third plaintiff application for the letters of administration of the estate of the deceased. The plaintiffs, not without justification, describes the 1st order granted by the Syariah Court as a Mareva Injunction and the second order as an Anton Pillar Order.
[3] On 6 November 2009, the plaintiffs filed an originating summons seeking inter alia a declaration that the defendant possessed no interest in the first plaintiff and/or, in any event, not until the completion of the administration and distribution of the estate of the deceased, in his capacity as a beneficiary. The Originating Summons was accompanied by an application for an injunction restraining the defendant and his servant, agent, from inter alia interfering with the affairs and administration of the first plaintiff. The application for th
