EST 1918 SHOOK LIN BOK KUALA LUMPUR EST 1918 SHOOK Lin BOK KUALA LUMPUR LEGAL UPDATE Vol 3 No 2 PP13906/8/2007 Issue No 2 2007 Shook Lin & Bok sponsors 2007 In-house Counsel Summit in Hong Kong The firm was once again a co-sponsor of the 2007 Asia Law & Practice, Asia Pacific In-house Counsel Summit in Hong Kong on 14th and 15th March 2007. The full report follows inside. IN THIS ISSUE AMENDMENTS TO EXCHANGE ENFORCEMENT OF AWARDS UNDER CONTROL ACT .......................................... 5 THE ARBITRATION ACT 2005: AN OVERVIEW .......................................... 16 EXEMPTION FROM REAL PROPERTY GAINS TAX ACT ......................................... 5 CASE UPDATES PROTECTING INTELLECTUAL PROPERTY BANKING ................................................... 6 IN MALAYSIA ............................................ 12 LAND ......................................................... 7 ISLAMIC FINANCE: THE MALAYSIAN SUCCESS STORY ...................................... 15 INTELLECTUAL PROPERTY .......................... 9 CROSS BORDER M & As ........................... 15 Issue No 2 2007 1 EST 1918 SHOOK LIN BOK KUALA LUMPUR 2 Issue No 2 2007 EST 1918 SHOOK LIN BOK KUALA LUMPUR Shook Lin & Bok sponsors 2007 In-house Counsel Summit in Hong Kong As the economies in the Asia Pacific region continue to Regional M&As register sustained economic growth, investment in the region and the challenges of multi jurisdictional and cross A session entitled ‘M&As: Consolidation as a Key to border business in the region have assumed increasing Competitiveness?’ addressed some of the issues importance for businesses worldwide. related to cross-border and domestic mergers or acquisitions in various jurisdictions... The annual Asia Law & Practice, Asia Pacific In-house Counsel Summit provides an opportunity for discourse Ivan Ho of Shook Lin & Bok in Malaysia also on, and sharing of, the experience of doing business in emphasized the importance of due diligence, advising the region. delegates to keep a sharp eye out for the sometimes inaccurate assumptions that are often made about The firm is honoured to have been invited to be a co- companies involved in a merger or acquisition... sponsor of the conference for the second year running. The rise of Islamic finance This year’s topics ranged over the following topics: The M&A Boom: Consolidation as the Key to Competitiveness, Islamic finance has become a burgeoning area of Labour and Employment Law, Corporate Governance, practice in Asia as Malaysia, Indonesia and even Dispute Resolution, Private Equity Investment: China, India Singapore compete to become the region’s hub for or Elsewhere, Intellectual Property, Antitrust Law, Islamic Islamic transactions. The possibility of luring money Finance and Capital Markets. from the Middle East has proved an irresistible attraction, and those nations that have seen this This firm’s Michael Soo, Jal Othman and Ivan Ho delivered potential early have had a head start in developing papers in the Intellectual Property, Islamic Financing and shari’a-compliant products while financial centres like Regional M&A Sessions respectively, and the firm hosted Hong Kong continue to rely on their strengths in the the workshop on Malaysia. conventional markets… Here are excerpts from the Asia Law publication for April Jal Othman of Shook Lin & Bok in Malaysia pointed 2007 on the conference. out that because Islamic financing transactions must avoid trading in risk, they require a higher level of “ Asia Law & Practice hosted its largest annual certainty, which he said makes them more equitable. conference on March 14-15 2007, the Asia-Pacific And such financing should not be seen as something In-house Counsel Summit, at the Intercontinental exclusively for Muslims. “It’s for anyone who is Hotel in Hong Kong. A record number of delegates interested in a more equitable form of financing,” registered for the conference, which brought he said. together leading in-house practitioners from across Asia, Europe, the United States and the Middle East. Persistent IP challenges Participants attended a variety of sessions addressing The protection of intellectual property (IP) rights some of the main regulatory issues for those with remains a paramount issue in the region, as China business activities or investments in Asia. Individual and other manufacturing centres continue to churn country workshops provided additional insights into out pirated goods. Counterfeiters are becoming more the leading concerns for commercial enterprises in sophisticated and organized in their approach, while specific jurisdictions. rights owners struggle to not only protect their IP assets but to maximize the returns on them… Now in its fourth year, the summit once again provided a forum for discussion and an excellent Shook Lin & Bok’s Michael Soo emphasized that local networking opportunity for those charged with lawyers and investigators should cooperate with law advising businesses on how to complete deals across enforcement and customs officials in combating the region. counterfeiting. Moreover, he said, infringers should receive help if and when they decide to “go legit”.” Issue No 2 2007 3 EST 1918 SHOOK LIN BOK KUALA LUMPUR Malaysian Investors Forum 2006 The session was moderated by Dr Nik Ramlah Nik Mahmood, Senior Executive Director for Strategy and Development, SC. The session touched upon the legal and regulatory issues facing the Islamic Finance industry. The firm shared its experience in the challenges facing Islamic Finance practitioners. Amongst the issues and observations raised by the firm and presented for discussion by the panel were as follows: - the pro-active approach adopted by the regulatory bodies as reflected in the facilitative nature of the rules, The firm’s Partner in the Islamic Finance regulations and guidelines issued by practice, Jal Othman, was one of the these bodies; speakers at the Malaysian Investors Forum held at the Mandarin Oriental Hotel from - the unique dual banking and 14th August, 2006 to 15th August, 2006. monetary system incorporating The conference was the first of its kind, both the conventional finance and being a joint collaboration by the main Islamic finance models; regulatory bodies in Malaysia including the Securities Commission (SC) , Bank Negara - the open door policy to foreign Malaysia, the Labuan Offshore Financial institutions to establish and carry on Services Authority (LOFSA) and the Islamic finance practices in Malaysia; Companies Commission of Malaysia. - the mono jurisdictional nature of The Conference was touted as one of the Islamic finance and how this has world’s largest Islamic Finance related been a catalyst to the rapid event for the year, with over 1,000 development of the industry; individuals attending and over 30 countries being represented. There were 65 of the - the need to develop the human industry’s leading practitioners in capital resources of the industry; attendance over the two days. The firm is honoured to have been The firm was one of only two law firms invited to such an international and high invited to present papers at the profile conference and is grateful to have Conference. The theme of the Conference been given the opportunity to advance was the future direction of Islamic Finance the views and outlook of the firm in the in Malaysia. The Governor of Bank Negara, vast developing industry of Islamic Tan Sri Dato’ Sri Dr Zeti Akhtar Aziz Finance. Islamic Finance is one of several officiated the opening of the two day primary areas of practice of the firm and Conference. the firm continues to be involved in both domestic and international forums to Jal Othman was one of five panellists in the contribute to the development of this session entitled “Successfully Meeting Local industry. and International Regulatory Requirements.” 4 Issue No 2 2007 EST 1918 SHOOK LIN BOK KUALA LUMPUR 1953, the Balance of Payments Department Amendments to at Bank Negara is still continuing with its Exchange Control Act practice of registering guarantees on-line. It is arguable as to whether it is correct to By Gazette Notification PU(B)339 dated continue with this practice and whether the 28th December, 2007, the date of 1st mere registration constitutes approval of the January, 2007 has been declared as the Controller of Foreign Exchange for the date of the coming into force of a new purpose of section 10A of the Exchange section 10A of the Act which was passed Control Act, 1953. There is no general as law since 2005 under Act A1241/05. directive or regulation issued by the Controller of Foreign Exchange whereby Giving a guarantee, indemnity or approval is given by the Controller of Foreign undertaking Exchange under section 10A of the Exchange Control Act, 1953 subject to such securities (1) With effect from 1st January, 2007, being registered and setting out the the prior approval of the Controller procedures or mechanisms for on-line of Foreign Exchange is required for a registration. Malaysian resident to guarantee, indemnify or to undertake or to do Pending clarification from the Controller of any act which involves, is in Foreign Exchange and any further directive association with or is preparatory to from the Controller of Foreign Exchange, the giving of a guarantee, indemnity parties should apply to the Controller of or similar undertaking in respect of Foreign Exchange under section 10A of the the debt, obligation or liability: Exchange Control Act, 1953 when the securities fall within the ambit of the (a)