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COMPETITION LAW & ANTITRUST
Conditional Block Exemption Order — Liner Shipping Agreements
In 2014, a three-year block exemption for liner shipping agreements was granted by the MyCC and that block exemption is due to expire on 6 July 2017. On 21 June 2017, the Malaysian Competition Commission announced its decision to grant a Block Exemption Order ("BEO") (scheduled to commence on 7 July 2017 for a period of two years) to Vessel Sharing Agreements and Voluntary Discussion Agreements made within Malaysia or which have an effect on liner shipping services in Malaysia. The BEO is subject to the condition that there must be no element of price fixing, price recommendation or tariff imposition on transport users. It does not apply to a situation of abuse of a dominant position. It also does not cover inland carriage and warehousing of goods.
For further information regarding competiton law matters, please contact
Dato' Johari Razak
jorazak@shearndelamore.com
K Shanti Mogan
shanti@shearndelamore.com
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DISPUTE RESOLUTION
Malaysia Airlines Bhd v Tan Wei Hong & Ors [2017] 6 CLJ 34
Family members of three passengers on board flight MH 370 filed a suit against Malaysia Airlines Berhad ("MAB"). MAB filed an application to strike out the claim on the basis that it is not a successor of Malaysian Airline System Berhad ("MAS") under the Malaysian Airline System Berhad (Administration) Act 2015 ("MAS Act") and does not take up the liabilities of MAS with regard to MH 370. MAB's application to strike out the suit was disallowed by the High Court. The Court of Appeal in reversing the High Court decision, held that the vesting order dated 1 September 2015 did not vest liabilities in connection with MH 370 on MAB and that the vesting order is consonant with the agreement between MAS and MAB where it was expressly agreed that MAB should not assume any liabilities including any claims arising from the loss of MH 370. The claim against MAB was struck out.
Amendments to the Arbitration Rules of the Kuala Lumpur Regional Centre for Arbitration (Revised KLRCA Arbitration Rules)
The Revised KLRCA Arbitration Rules came into force on 1 June 2017. Some salient amendments made in the Revised KLRCA Arbitration Rules are in respect of joinder of parties, technical review of awards and power of the KLRCA’s director to consolidate arbitration proceedings.
For further information regarding dispute resolution matters, please contact
Datin Jeyanthini Kannperan
jeyanthini@shearndelamore.com
Robert Lazar
rlazar@shearndelamore.com
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INTELLECTUAL PROPERTY
Case note
There were recently two High Court decisions concerning performers’ rights under the Copyright Act 1987 ("Act"), which are
- Sheikh Abdullah bin Ahmad v Universal Music (M) Sdn Bhd [2017] MLJU 421 ("Sheikh Abdullah"); and
- Prism Berhad v Measat Broadcast Network System Sdn Bhd [2017] MLJU 511 ("Prism Berhad").
In Sheikh Abdullah, the plaintiff, who is a singer, claimed from the defendant, a recording company, payment of royalty from the reproduction and sale of his album entitled "Kau Bungaku". The plaintiff’s claim against the defendant was premised upon his statutory rights as a performer under section 16A of the Act. Pursuant to that section, a performer has the exclusive right to control in Malaysia the doing of certain acts in relation to his "performance", including the first distribution to the public of a fixation of a "performance", or copies thereof, through sale and other transfer of ownership. As "performance" is defined in section 3 of the Act as one that "… includes a performance of a musical work … which is given live by one or more persons in Malaysia, whether in the presence of an audience or otherwise", one of the issues for determination is whether section 16A of the Act only refers to a performer’s exclusive rights in the control of acts in relation to live performances, which would in turn have a bearing on the plaintiff’s rights over his sound recordings.
In paragraph [37] of the judgment, the High Court held that performers’ rights under section 16A of the Act are not limited to "live performances" only and, accordingly, the plaintiff has the exclusive rights as a performer under section 16A(1)(d) of the Act to control the first (and subsequent) distribution of his sound recordings. In arriving at the decision, the Court found support in an excerpt from a textbook by Ida Madeiha binti Abdul Ghani Azmi:
"[39] … the Copyright (Amendment) Act 2012 substituted 'live performance' with 'performance'. This is because the term 'performance' is capable of implying an action that is performed live… It should be noted that the presence of an audience is not crucial to a performance. Thus, the act of singing by a singer in the course of recording his song in a studio can also be considered a performance under the Act."
However, the High Court in Prism Berhad held the contrary view in relation to the same issue. In this case, the plaintiff is a licensing body and the defendant is a user of musical works for its programme. The plaintiff claimed from the defendant an annual licence fee on behalf of performers based on an international standard tariff practice of 1.5% of the defendant’s annual advertising profit. In determining whether performers can claim licence fees from the defendant through the plaintiff for the use of their sound recordings in the defendant’s programme, the High Court held that "performance" shall refer to "live" performance only according to the definition of "performance" in section 3 of the Act and that the nature of performers’ rights under section 16A of the Act shall be limited to live performances only. In light of this, the plaintiff’s claim for licence fees from the defendant on behalf of the performers was rejected as the use of sound recordings in the defendant’s programme is not a live performance under section 16A of the Act.
Conclusion
Decisions of the High Court in Malaysia are binding on all subordinate courts, but one High Court judge is not bound to follow the decision of another. Where there are two conflicting decisions in the High Court such as the illustrated cases, the High Court in its later decisions may choose to follow either. Ultimately, it may take a decision of the Court of Appeal to resolve the position.
For further information regarding intellectual property law matters, please contact
Karen Abraham
karen@shearndelamore.com
Indran Shanmuganathan
indran@shearndelamore.com
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TAX & REVENUE
Income tax
The Inland Revenue Board of Malaysia has recently issued two new public rulings on:
- Income Tax Treatment Of Goods And Services Tax Part I — Expenses (Public Ruling No 1/2017) — issued on 8 June 2017; and
- Income Tax Treatment Of Goods And Services Tax Part II — Qualifying Expenditure For Purposes Of Claiming Allowances (Public Ruling No 2/2017)
Goods and Services Tax (GST)
The revised versions of the following Industry Guides have been published on the Royal Malaysian Customs Department’s GST website:
- Duty Free Shop (revised as at 15 June 2017);
- Insurance and Takaful (revised as at 6 June 2017);
- Tourist Refund Scheme (revised as at 6 June 2017); and
- Warehousing Scheme (revised as at 15 June 2017).
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Copyright © 2017 Shearn Delamore & Co. All rights reserved.
This Alert is issued for the information of the clients of the Firm and covers legal issues in a general way. The contents are not intended to constitute any advice on any specific matter and should not be relied upon as a substitute for detailed legal advice on specific matters or transactions.
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