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Ms Idza Hajar Ahmad Idzam together with Bailey Leong Pui Yee and Lee Sheen Yee, from ZUL RAFIQUE & partners’ Litigation team, has successfully resisted a reference of dispute to the Tribunal (‘Tribunal Proceedings’) established under the Co-Operative Societies Act 1993 made by a member of Koperasi Maju Ekonomi Pekerja Berhad (‘Koperasi’) against its client, Koperasi in the case of Ahmad Badli Bin Mohemad (‘the Applicant’) v Koperasi Maju Ekonomi Pekerja Berhad (‘the Respondent’).

In year 2009, the Applicant applied for personal financing from the Respondent via submitting the KOSEPADIK Personal Financing-i Application Form. The Respondent approved the Applicant’s application. The KOSEPADIK Personal Financing-i Application Form and the Terms and Conditions for Facility under the Shariah Principle of Bai’ Inah (‘the Facility Agreement’). In accordance with the Facility Agreement read with a letter of consent executed by the Applicant, monthly salary deductions were made for the Applicant for a period of around 8 years prior to the Applicant filing a suit in the High Court of Malaya at Kuala Terengganu bearing the suit number TA-24NCvC-104-06/2017 (‘the High Court Suit’).

In the High Court Suit, the Applicant sought for inter alia a declaration that the Facility Agreement entered with the Respondent is invalid and void for non-compliance of provisions of the Central Bank of Malaysia Act 2009 and the rulings and/or resolutions enacted thereunder. The High Court found in favour of the Applicant leading to an appeal filed by the Respondent to the Court of Appeal.

In the Court of Appeal, the Respondent contended inter alia that the Appellant is a duly incorporated co-operative society wholly governed by the provisions of the Co-operative Societies Act 1993 and as such, the Facility Agreement ought not to be subjected to the provisions of the Central Bank of Malaysia Act 2009 or any rulings and/or resolutions enacted thereunder. Ultimately, the Court of Appeal agreed with the submissions submitted by the Respondent and allowed the appeal with costs.

Being dissatisfied with the said Court of Appeal’s decision, the Applicant then commenced the Tribunal Proceedings where the same relief was sought i.e. the Facility Agreement is void for failure to comply with the Central Bank of Malaysia Act 2009 or any guidelines and/or rulings and/or resolutions enacted thereunder.

The Respondent raised a preliminary objection in that the Applicant ought to have commenced this Tribunal Proceedings prior to even filing the High Court Suit and subsequently led to an appeal to the Court of Appeal. The Respondent’s solicitors submitted that the Applicant had willfully waived his rights to commence this Tribunal Proceedings and opted to initiate a suit in Court, the Applicant is estopped and/or barred by the doctrine of res judicata from denying the Court of Appeal’s decision and to now refer this dispute before the Tribunal.

Having heard both parties represented by their respective solicitors, the Tribunal agreed with the Respondent’s submission in that the doctrine of res judicata applies and dismissed/rejected the Applicant’s claim with costs to be paid to the Respondent. The Tribunal further agreed that the Applicant ought to have referred the dispute to the Tribunal rather than commencing the High Court Suit.


For more insight into this area of law, please contact our Partners in Litigation Practice Group:
P Jayasingam
Natalia Izra Nasaruddin
Idza Hajar Ahmad Idzam
Farah Shuhadah Razali