Recognition and/or enforcement of foreign money judgments

The Reciprocal Enforcement of Judgments Act 1958 [Act 99] (“REJA”) is an Act for the reciprocal enforcement of judgments of superior courts. The REJA came into effect on — 

(a) 1 January 1959 in Peninsular Malaysia; and

(b) 1 December 1972 in Sabah and Sarawak. 

Scope of REJA

• The REJA applies based on reciprocity in respect of certain countries specified in the First Schedule to the Act. The Yang di-Pertuan Agong (“YdPA”) may, by order —  

(a) Pursuant to section 3(2) of the REJA, extend the application of Part II of the REJA to include more countries and specify what courts of that country shall be deemed to be superior courts for Part II of the REJA if the YdPA is satisfied that there will be a significant reciprocal treatment for enforcing High Court judgments in that country; or 

(b) Under section 9 of the REJA, the respective superior courts in each of the countries from the First Schedule may be removed if the YdPA perceives that the recognition and enforcement treatment granted by the courts of any reciprocating country to High Court judgments are considerably less favourable compared to the treatment given by the Malaysian courts to judgments from the superior courts of that country.

• Currently, Part II of the REJA extended to the superior courts of the respective countries: 

(1) United Kingdom (UK); 

(2) Hong Kong Special Administrative Region of the People’s Republic of China; 

(3) Singapore; 

(4) New Zealand;

(5) Republic of Sri Lanka (Ceylon); 

(6) India (excluding the State of Jammu and Kashmir, State of Manipur, Tribal areas of State of Assam, Scheduled areas of the States of Madras and Andhra); 

(7) Brunei Darussalam.  

Pre-requisite requirements for registering foreign judgments under the REJA

The pre-requisite requirements for registering foreign judgments under the REJA can be found in s.3(3) of the REJA. They are: 

(a) The judgment is final and conclusive as between the parties; 

(b) There is payable thereunder a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty; and 

(c) The judgment is from a country or territory added to the First Schedule and it is given after that country or territory is added to the Schedule.

Enforcement of foreign judgments under the REJA 

Enforcement of foreign judgments under REJA is by way of registration in the High Court. Section 4(2) of REJA provides as follows: 

(a) A registered judgment shall, for the purposes of execution, be of the same force and effect. 

(b) Proceedings may be taken on a registered judgment. 

(c ) The sum for which a judgment is registered shall carry interest. 

(d) The registering court shall have the same control over the execution of a registered judgment; as if the judgment had been a judgment originally given in the registering court and entered on the date of registration.

The exceptions to the registration of foreign judgments under the REJA are set out in s.4(1) of REJA. The exceptions are: 

(a) The judgment has been wholly satisfied; or 

(b) The judgment could not be enforced by execution in the country of the original court. 

If, at the date of the application for registration, the foreign judgment has been partly satisfied, the judgment shall not be registered in respect of the whole judgment sum but only in respect of the balance remaining payable at that date (see s 4(4) of REJA). 

The judgment sum must be registered as if it were a judgment for Malaysian currency. Therefore, the judgment sum shall be converted to its Malaysian Ringgit equivalent on the basis of the exchange rate prevailing at the date of the judgment of the original court (see section 4(3) of REJA). 

Civil Procedures to enforce foreign judgments in Malaysia 

The procedures to enforce foreign judgments in Malaysia can be found in Order 67 of the Rules of Court 2012 (‘ROC 2012’). The application shall be made by way of filing an original summons at the High Court. (Order 67 rule 2 ROC 2012). The application must be supported by an affidavit, and the formalities for the affidavit are further provided in Order 67 rule 3 of the ROC 2012. 

(https://lom.agc.gov.my/act-view.php?type=pua&no=P.U.%20(A)%20205/2012) 

In practice, the hearing is conducted ex parte and the court will grant leave to register the foreign judgment if the application for registration complies with REJA. The order for leave will state the period within which an application may be made by the judgment debtor to set aside the registration. Execution will not be carried out until this period expires. (See Order 67 rule 5(2) ROC 2012). 

Limitation period 

The limitation period for the enforcement of foreign judgments is provided in the Limitation Act 1953 [Act 254], specifically, s.6(3) of Act 254 provides that an action upon any judgment shall not be brought after the expiration of twelve years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due. 

(https://lom.agc.gov.my/act-detail.php?act=254&lang=BI&date=01-09-2019#timeline) 

Setting aside foreign judgments

There are mandatory and discretionary grounds to set aside foreign judgments  (s.5 REJA). The mandatory grounds to set aside foreign judgments can be found in s.5(1)(a) REJA. They are: 

(a) the judgment is not a judgment to which REJA applies;

(b) the original court had no jurisdiction in the circumstances of the case;

(c) the judgment debtor in the proceedings in the original court did not receive sufficient notice of the proceeding to appear; 

(d) the judgment was obtained by fraud; 

(e) the enforcement of the judgment would be contrary to Malaysia public policy;  

(f) the rights under the judgment are not vested in the applicant.

Foreign judgments may be set aside if the matter has been subject to a final and conclusive judgment by a court having jurisdiction in the matter. (s.5(1)(b) REJA)

Methods of enforcement 

(a) Seizure and sale. 

(b) Examination of the judgment debtor; 

(c) Garnishee proceedings. 

(d) Charging order in respect of shares held by the judgment debtor. 

(e ) Bankruptcy or winding up proceedings.

Common law 

In See Hua Daily News Bhd v Tan Thien Chin & Ors [1986] 2 MLJ 107, the Supreme Court (now the Federal Court) explained that the main advantage of the REJA was to provide for ‘direct execution of foreign judgments. It ‘obviates the necessity of first obtaining a local judgment with the attendant requirement of establishing jurisdiction over the defendant as a pre-condition’. Defences that may be raised to an action on the judgment at common law include:  

(a) that the foreign court had no jurisdiction; 

(b) that the judgment was obtained by fraud;  

(c) that the judgment would be contrary to public policy; and 

(d) that the proceedings in which the judgment was obtained were opposed to natural justice. 

The Federal Court in the recent case of Pembinaan SPK Sdn Bhd v Conaire Engineering Sdn Bhd LLC & Anor and another appeal [2023] 2 MLJ 324 outlined the relevant principles of a common law action on a foreign judgment: 

(a) While REJA serves to facilitate direct execution of foreign judgments, it is only in respect of those reciprocating countries listed in the First Schedule to the Act. The right to sue in common law upon a judgment obtained in another jurisdiction nevertheless, remains. Of course, a claimant can always opt to sue upon the underlying cause, be it in tort, contract or for any other complaint without relying on the foreign judgment; 

(b) At common law, a foreign judgment creates a debt between the parties and provides a cause of action on which the debtor can be sued.

(c) In order to be enforceable, the foreign in personam judgment must be final and conclusive between the same parties and it must be rendered by a court of competent jurisdiction.

Common law method of enforcement 

For common law enforcement of a foreign judgment, as stated above, a fresh action has to be brought. This will either be by filing of a writ of summons and statement of claim, or by filing an originating summons with a supporting affidavit. An application for summary judgment, supported by affidavit, may also be filed to expedite matters where the defendant has no defence.