Malaysia Court of Appeal affirms application of double actionability rule in claim for a tort that occurred in foreign country

30 July 2024

Export-Import Bank of Malaysia Berhad v Sun Holding (Sun Park Hotel) Co Ltd & Ors (Civil Appeal No: N-02(W)-579-04/2022)

The Malaysia Court of Appeal has considered whether a counterclaim by a borrower against a financial institution for negligence under a facilities agreement governed by the law of the Lao People’s Democratic Republic (“Lao PDR”) attracted the application of the double actionability rule in determining if the claim was actionable.

The application of the double actionability rule would require the counterclaim to be actionable both under the law of Lao PDR as well as the law of Malaysia, being the jurisdiction where the action was brought. A plaintiff bringing an action for a tort occurring in a foreign country must show that the tort is (i) actionable as such by the laws of the forum, had the tort occurred within the forum court’s jurisdiction and (ii) also actionable by the laws of the foreign country where the tort is said to have occurred.

This article by our associate firm in Malaysia, Rahmat Lim & Partners, provides an overview of the court’s decision and is available on their website.