Alliance For Financial Inclusion v Nazira Binti Nasir (WA-16A-20-01/2024)

An appeal (L1) lodged by the appellant Alliance for Financial Inclusion (AFI) against my whole decision in dismissing their 30 challenge of the Interim Award of the Industrial Court Award No.2381 dated 19.12.2023 (IC Interim Award). 10/02/2025 09:32:44 Kand. 52

The IC Interim Award dismissed the appellant’s interlocutory application dated 13.09.2022 to strike out the Industrial Court Claim (IC Claim) under section 29(fa) Industrial Relations Act 35 1967 (IRA) filed by the respondent Nazira Binti Nasir against AFI grounded on wrongful employment dismissal. [2] On 07.01.2025:

After duly perusing the cause papers and the parties' respective submissions on the balance of probabilities, I determined no 40 merit in the appeal. I dismissed it with costs of RM5,000.00 awarded to the respondent.

Aggrieved, the appellant appealed, and my reasons are as follows: THE SALIENT FACTS 45 [3] The appellant:

An international organisation established under Article 1 of the appellant's Articles of Association, effective 01.07.2020, read together with the Host Country Agreement between the Government of Malaysia and the Appellant dated 15.03.2023 50 (the Host Agreement).

Employed the respondent as a Human Resource Manager (HRM) on a fixed-term contract that began on 08.01.2018 and expired on 31.05.2021 (AR, Encl.10, Part C-pg.645). 55 3.1 However, on 19.03.2021, the respondent was dismissed from her employment for alleged misconduct after a supposed domestic inquiry (AR, Encl.11, Part C-pg. 937):

She brought an official complaint about the alleged unfair dismissal to the Industrial Relations department under section 60 20(3) of the IRA.

The Director General of Industrial Relations (DGIR) saw fit to refer the matter to the Industrial Court by a reference dated 22.07.2022 (AR, Encl.10, Part C-pg. 643-644) and the matter was registered as Industrial Court Case No. 14/4-1215/22 (the 65 IC Case).

Before the matter could be canvassed and ventilated before the Industrial Court (IC), the appellant filed a Notice of Application dated 13.09.2022 (AR, Encl.7, Part A: pp. 25-27), seeking to strike out the impugned IC Case under Section 29(fa), 29(g) 70 read with Section 30(5) of the IRA:

Anchored on the alleged basis that the IC lacks the requisite jurisdiction because the appellant is an international organisation covered by immunities and privileges from suit or legal process under the International 75 Organizations (Privileges and Immunities) Act 1992 (Act 485).

After considering the party's arguments, the Chairman of the IC dismissed the striking-out application via an Interim IC Award no.2381 on 19.12.2023 and set the matter down 80 for trial.

3.2 Dissatisfied with the Interim IC Award on their interlocutory application to strike out the IC Case before the IC, the appellant appealed under section 33C of the IRA (complying with O.55, r.5 RC 85 2012). 90 THE PARTIES SUBMISSIONS I have considered the cause papers and parties' submissions, briefly as follows: The Appellant’s Arguments 95 [4] The learned Chairman:

Fell into error in dismissing the striking out of the respondent’s IC Case under Section 29 (fa) and (g) of the IRA that reads: "29. The Court may, in any proceedings before it: (fa) Order a case to be struck off or reinstated 100

Generally direct and do all such things as are necessary or expedient for the expeditious determination of the matter before it."

Fell into error in failing and/or neglecting to consider:

The appellant is an international organisation vested with privileges and immunities under Section 4(1) of Act 485, Regulation 5 of the AFI Regulations and Paragraph 1 of the First Schedule to Act 485.

Regulation 5 of the AFI Regulations provides that AFI shall 110 have all or any of the privileges and immunities specified in the First Schedule to Act 485. Paragraph 1, the First Schedule to Act 485, provides: "Immunity of the organisation, and the property and assets of, or in the custody of, or administered by, the organisation, from suit and 115 other legal process".

Paragraph 1, the First Schedule to Act 485, "Immunity of the organisation... from other legal process", would include proceedings before the Industrial Court. Therefore, the IC lacks the requisite jurisdiction to adjudicate the merits of 120 the respondent’s IC case. Arguing that the learned Chairman of the IC did not appropriately consider Islamic Financial Services Board v Marlin Fairol Mohd Faroque and Anor [2010] 8 CLJ 173, 125 which the Court of Appeal affirmed. In said case, the High Court considered:

The same issue and determined that the words " ... legal process" under Part 1 of the Schedule to the Islamic Financial Services Board Act 2002 (which are similar to that provided under Paragraph 1 of the 130 First Schedule to Act 485) are framed in very wide terms, to include proceedings in a proper court of law.

(ii) It does not exclude other forms of lawful process. Employment matters are cloaked with immunity. 135 4.1 It was also argued further that the Chairman fell into error:

In placing reliance on the IC Award No.1786 of 2023 (Rushaniza binti Ruslan v. AFI) where the learned Chairman of the IC in that case had determined:

International organisations lack jurisdictional immunities for 140 acts not related to the object and purpose of their establishment (i.e., by doing business), which would include employment disputes as they do not compromise the organisation's autonomy.

The jurisdictional or functional immunity of the Appellant 145 does not extend and/or cover employment disputes. In support, the appellant cited The United States of America v. Mahkamah Perusahaan, Malaysia & Subramaniam A/L Letchumanan (Application for Judicial Review No. WA-25-236- 150 08/2023), where the High Court ordered: “(i) A Declaration that under the common law doctrine of restrictive sovereign immunity that the dismissal of the Second Respondent from employment for misconduct was in the course of the embassy's internal disciplinary management and the United States of America is immune from the 155 jurisdiction of the Industrial Court in respect of the Second Respondent's claim pursuant Section 20 of the Industrial Relations Act 1967.

(ii) A Declaration that under the common law doctrine of restrictive sovereign immunity in the performance of the functions and duties of the Second Respondent as a security guard of the embassy, which is an integral 160 component of the Embassy's security system and arrangements, the Second Respondent was engaged in the implementation of a governmental of sovereign activity of the United States of America and the United States of America is immune from the jurisdiction of the Industrial Court in respect of employment claims pursuant Section 20 of the 165 Industrial Relations Act 1967.

(iii) A Certiorari order to quash the Industrial Court Award No. 1022 of 2023 dated 27.4.2023.”

4.2 The appellant further argued that:

In Islamic Financial Services Board v Marlin Fairol Mohd Faroque and Anor (supra) (IFSB), the main issue relates to the jurisdiction of the IC to hear the matter on the basis that the IFSB is an international organisation covered with privileges and immunities under:

Section 7 of the Islamic Financial Services Board Act 2002 (Act 623) (IFSB Act).

Regulation 2 of the IFSB Regulations.

Schedule to the IFSB Act. 180 Part 1 of the Schedule of the IFSB Act reads as follows: "Privileges and Immunities of the Board.

Immunity of the Board, and the property and assets of, or in the custody of, or administered by, the Board, from suit and other legal process."

It was argued that in the present appeal, the IC lacks the jurisdiction to hear the case because the appellant is an international organisation covered by immunities and privileges from suit or legal process under Act 485. 190 The First Schedule to Act 485 reads as follows: "Immunity of the organisation, and the property and assets of or in the custody of or administered by the organisation, from suit and from other legal process". 195

The appellant reiterated the earlier point that the decision in the IFSB case is clear and that the term legal process is constructed broadly to include proceedings in a proper court of law. (See Sundra Rajoo all Nadarajah v. Menteri Hal Ehwal Luar Negeri, Malaysia & Ors [2020] 10 MLJ 583, that the Federal 200 Court had affirmed the immunity of Sundra Rajoo.

4.3 Therefore, it is evident that the main issues and the provisions about immunity in the IFSB case and the present appeal are similar. Since the Court of Appeal had affirmed the decision in the IFSB case, the 205 learned Chairman of the IC was bound by this decision. Under the circumstances, the appellant prays that this appeal be allowed and that the IC Interim Award dismissing the appellant’s interlocutory application to strike out the IC Claim be set aside. 210 [5] THE RESPONDENT IN OPPOSING, ARGUED: The respondent appeared in person and was not represented by any counsel but argued extensively in opposing the present appeal: 215 The Employment Contract 5.1 She argued:

The parties had bound themselves to an employment contract that set up their legal rights and obligations. The Employment Contract provides: 220 “10.1 Governing Law. The employment relationship shall be governed by the laws of Malaysia and subject to the exclusive jurisdiction of the courts of Malaysia.”

As the HRM, the respondent claimed to be acquainted with the 225 terms and conditions outlined in the respective employment contracts. These employment contracts were linked to the provisions of the appellant's Host Country Agreement. Article II of the Host Country Agreement between the Appellant and the Government of Malaysia explicitly addresses and governs 230 these terms.

5.2 The respondent alluded the Court to:

The Code of Conduct (AFI) The respondent cited the appellant’s AFI Code of Conduct, 235 Annex 2, clause 47, which clearly provides that the laws of Malaysia govern the appellant: “4. Governing Law. This Agreement shall be governed in all aspects by the laws of Malaysia, as such laws apply to agreements entered into and to be 240 performed entirely within Malaysia.”

AFI (Privileges and Immunities) Regulations 2016, [The Federal Government Gazette] The Minister of Finance, in exercising his power conferred by 245 subsection 3(1), 4(1), and section 11 of the International Organizations ([Privileges and Immunities) Act 1992 [Act 485], make the regulations cited as the Alliance for Financial Inclusion (Privileges and Immunities) Regulations 2016 (Regulation 2016), gazetted as The Federal Government 250 Gazette.

Regulation 4 of the Regulations 2016 provides: “AFI shall have juridical personality, and such legal capacities as are necessary for the exercise of its powers and the performance of its 255 functions.” Regulation 4 clothed the appellant with Judicial Personality, which means the Appellant can enter into contracts, sue or be sued, own property, and perform other legal actions in its name 260 as listed in Article II of the Host Country Agreement and Article II of the Alliance for Financial Inclusion’s Articles of Association.

Regulation 5 of the Regulations 2016 provides: “AFI shall have all or any of the privileges and immunities specified in the First Schedule of the Act.” 265 It provides that the term “all or any” must be ascertained by examining the appellant's Host Country Agreement and Articles of Association. These governing documents provide the necessary framework for determining the scope of the 270 privileges and immunities conferred upon the appellant.

International Organizations (Privileges and Immunities) Act 485 Section 11(5) of Act 485 provides: 275 “Regulations made under sections 4,5,6A or 6B shall not confer on any person or organisation any privileges or immunities greater in extent than those which at the time of the making of the regulations are or are required to be conferred on that person or organisation to give effect to any international agreement in that behalf.” 280

Article 2, Alliance for Financial Inclusion Article of Association provides: Article 2: Judicial Personality. AFI shall have full judicial personality separate from its members and have 285 perpetual succession. AFI shall have full capacity to: - Contract. - Sue or be sued in its name or institute legal proceedings; and - Acquire, hold, and dispose of assets and property.” 290

This is consistent with the agreement in Article II of the Host Country Agreement between the appellant and the Government of Malaysia.

It clarifies the nature of the appellant’s legal standing, underscoring that the appellant does not enjoy absolute 295 immunity by reserving the capacity to be sued and subject to legal action.

It contradicts the claim of blanket immunity.

She argued that, in the circumstances, while the appellant may have privileges under the Host Country Agreement, 300 such privileges do not extend to absolute immunity from legal proceedings; a part of it is in the context of employment and contractual disputes.

Host Country Agreement between The Government of 305 Malaysia and The Alliance for Financial Inclusion

A Host Country Agreement is a formal agreement between an international organisation and the government of the country where the organisation is headquartered or 310 operates.

This agreement outlines the terms and conditions under which the international organisation may conduct its activities within the host country, including the rights, privileges, and immunities the host government grants to 315 the organisation and its staff.

In Sundra Rajoo Nadarajah v Menteri Luar Negeri, Malaysia & Ors [2021] MLJ 209, the Federal Court held: “[60] It is pertinent to state that we were guided by the general aim 320 of the purpose of the immunity, which was granted to wit, to protect and preserve the Inviolability of AIAC, its documents and its archives. Where the Malaysian former High Officer acted in his official capacity, the purpose of conferring that immunity remained the same whether the nature of the 325 proceedings against him was civil or criminal unless the Agreement or the Act provided otherwise.”

5.3 The respondent submits:

It is essential to refer to the Host Country Agreement and the 330 applicable legislation to fully understand the scope and limitations of the "legal process".

The immunity's primary source, namely the appellant's Host Country Agreement, expressly states that the Appellant’s capacity and authority to employ staff are subject to Malaysian 335 Laws, rules and regulations and national policies.

Article II (Legal Capacity) of the Host Country Agreement provides as follows: “Subject to the Malaysian laws, rules and regulations and national policies from time to time in force, AFI shall possess full legal personality and shall 340 have the capacities of a body corporate having the capacity and authorisation:

To contract

………

To institute and defend itself in legal proceedings 345

……….

To employ staff…….”

There is no provision in the Host Country Agreement that the employment of staff by the appellant is subject to Immunity, but 350 it is subject to Malaysian Laws, rules and regulations coupled with the fact that the employment relationship shall be governed by the laws of Malaysia as stated in the AFI Contract of Employment and the AFI Code of Conduct, Annexure 2 355 5.4 The respondent further submitted that:

The appellant’s application to strike out the case is an afterthought, as it was only filed after the receipt of the Respondent’s Case Statement.

The Appellant had over a year to seek approval for the assertion 360 of absolute immunity if such immunity exists and inform the Labour Office accordingly.

This delay raises serious questions about the bona fides of the appellant's claim. It suggests that the application to Strike off the case is a reactive measure rather than a legitimate assertion 365 of immunity under the Host Country Agreement.

The respondent contends that the appellant’s immunity claim is without merit and has been rightly dismissed by the IC Chairman. In the circumstances, the respondent prays that this appeal be dismissed 370 with costs and that the case be returned to the IC for full ventilation to ascertain the parties' rights appropriately. THE LAW [6] Section 29(a) of the IRA provides as follows: - 375

Power of the Court The Court may, in any proceedings before it –

…. (fa) order a case to be struck off or reinstated; and 380

generally direct and do all such things as are necessary or expedient for the expeditious determination of the matter before it… O.55 r.5 of Rules of Court 2012: 385 Notice of Appeal against any decision other than a decision made after a trial:

Any application made before the trial is an interlocutory application: Bozson v Altrincham Urban District Council 390 [1903] 1 KB 547, an application or order was held to be considered final if it finally disposes of the parties' rights. If it does not, then it is an interlocutory one.

The Bozson test is applicable in the Malaysian and Singaporean context: 395 Ruby Investment (Pte) Ltd v Candipark Pte Ltd [1989] 3 MLJ 396, HC, following Tee Than Song Construction Co Ltd v Kwong Kum Sun Glass Merchant [1967] 2 MLJ 205, FC. Haron bin Mohd Zaid v Central Securities (Holdings) Bhd [1982] 2 MLJ 94, PC. 400 Under this provision, a summary judgment application would be appealable: Kwong Yik Bank Bhd v Ansonia Management Associates Sdn Bhd [1999] 1 AMR 377; [1999] 1 MLJ 366, CA. 405 [7] The Supreme Court in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Sdn Bhd [1993] 4 CLJ 7 ruled that it is only in plain and obvious cases when it can be seen that a claim or answer is on the face of it "obviously unsustainable" that the court would strike out the matter. The SC laid down the following test:

It is only in plain and obvious cases that recourse should be had to the summary process under the rule.

This summary procedure can only be adopted when it can be seen that a claim or answer is, on the face of it, obviously unsustainable.

It cannot be exercised by a minute examination of the documents and facts of the case to see whether the party has a cause of action or a defence.

If a point of law requires serious discussion, an objection should be taken on the pleadings and the point set down for arguments.

The court must be satisfied that there is no reasonable cause of action that the claims are frivolous or vexatious or that the defences raised are not arguable.

If the pleadings disclose some cause of action or some question fit to be tried by the court, the mere fact that it is weak and not 425 likely to succeed is not grounds to strike out a pleading. [8] The Court of Appeal made it clear:

Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 MLJ 473, CA ruled that a striking-out order should not 430 be made summarily if there is an issue of law that requires proper ventilation by the Court and if there is an issue of fact that is only capable of determination after taking viva voce evidence during a trial.

CB Land Sdn Bhd v Perunding Hashim & Neh Sdn Bhd 435 [2016] 6 MLJ 320, CA, ruled that the case should not be struck out if there are triable issues.

Honan Plantations Sdn Bhd v Kerajaan Negeri Johor & Anor and Another Appeal [1998] 3 CLJ 253, CA ruled that the impugned pleading must be hopeless, baseless, or without 440 foundation in law or equity or otherwise an abuse of the court's process before it can be struck out. FINDINGS [9] This direct appeal under O.55 r.5 RC 2012 mechanism takes a 445 broader approach than previously under Judicial Review. It allows the Interim IC award to be examined on its merits rather than just procedurally. In the present case, the IC handed down the IC Interim Award on 19.12.2023, determining that the striking-out application by the appellant was without the required merits and disallowed it, 450 and instructed parties to canvass and ventilate the subject matter of the respondent’s claim at the trial.

9.1 The appellant's sole basis in asking to strike out the respondent’s IC Case summarily is the position AFI took in challenging the IC’s jurisdiction to hear and determine in asserting that:

AFI is an international organisation clothed with privileges and immunities from suit or legal process (i.e. claiming a right to a blanket immunity for any tribunal to adjudicate against them) under Section 4(1) of Act 485.

The immunity determination in Islamic Financial Services 460 Board v Marlin Fairol Mohd Faroque and Anor (supra) is binding.

9.3 I have duly considered the rationale behind the foregoing IFSB case involving a judicial review application (O.53 RC 2012) where IFSB seek certiorari to quash the entire award of the IC: 465

Clearly, in IFSB, it wasn’t a case of summary dismissal of the subject matter before the IC, which signifies that the case’s merits were duly canvassed and ventilated by the IC before rendering its determination.

It was only after the IC had rendered the Final Award that IFSB 470 elected to challenge it and seek an order for certiorari to quash it via a Judicial Review from the High Court, where the High Court had the opportunity to consider and determine the merits appropriately:

Whether proceedings before the IC can be deemed to be 475 either a "suit" or "other legal process" within the meaning of Part 1 of the Schedule to the IFSB Act. In coming to his decision, the learned High Court Judge:

Examined the preamble to Act 485 and noted that immunity was to be accorded.

(ii) the Court also observed that IFSB, as a reputable international organisation, should seriously consider “reasonable alternative means” to provide adequate protection to the rights of staff members of a global organisation” as a means of correcting the imbalance occasioned by the grant of immunity.

In such circumstances, and given the caution and reservation expressed by my learned brother judge, I believe that what it amounts to is that the term suits and legal process may be ventilated based on the facts of each particular case. It should not be taken as granting a carte 490 blanche in all situations. Suits and legal processes can be examined case by case so they do not afford unrestricted control, as unchecked authority can lead to abuse, emphasising the necessity of checks and balances in all legal matters. 495

Granted that International organisations often seek immunity for various reasons, all stemming from the need to operate effectively and independently across borders. It seeks protection on: Local laws and jurisdictions, operational independence, 500 impartiality, functional necessity, safeguarding assets and personnel, facilitating dialogue and international cooperation, upholding international law. However, it must not be assumed or overlooked that immunity in such circumstances is not absolute and 505 can be waived in certain circumstances, such as when an organisation or its personnel/staff engages in criminal activity. The scope and limitations of the claimed immunity are often set out or defined in the specific Host Country 510 Agreements or treaties. Therefore, the impugned Host Country Agreement concerning this case must be examined by documentary and viva voce evidence to ascertain the extent of that immunity and its exceptions. In the present age, it must never be 515 taken as absolute as that can’t be the parties' or the legislator's intent. Otherwise, it would lead to an absurd conclusion when adversely impacted parties are left with no recourse. Whether that is or is not, has not been legally ascertained since the Host 520 County Agreement or treaty, whichever is applicable, has not been produced and examined.

Facts and circumstances leading to a claim on immunity should and must be canvassed and ventilated before a proper determination is made. This is consistent with the 525 observation by the Court of Appeal in Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors (supra), that a striking-out order should not be made summarily if there is an issue of law that requires proper ventilation by the Court and if there is an issue of fact that is only capable of 530 determination after taking viva voce evidence during a trial.

Similarly, it was also echoed by the Court of Appeal in CB Land Sdn Bhd v Perunding Hashim & Neh Sdn Bhd [2016] 6 MLJ 320, CA, that the case should not be struck out if there are triable issues. Indeed, there are serious 535 triable issues in the present case that must be appropriately determined to do justice to the rights of all parties before the Court.

In the circumstances, justice cannot be achieved with a summary dismissal if pertinent facts and circumstances are 540 ignored. To reiterate what was observed by the Court of Appeal in Honan Plantations Sdn Bhd v Kerajaan Negeri Johor & Anor and Another Appeal [1998] 3 CLJ 253, CA that the impugned pleading must be hopeless, baseless, or without foundation in law or equity or 545 otherwise an abuse of the court's process before it can be struck out. [10] By and large:

I agree with the learned IC Chairman and find no reason to interfere in her determination to dismiss the appellant's 550 interlocutory application to strike out the respondent’s IC Case without ventilating the merits in the said case and it was a premature expectation at that juncture by the appellant (the test in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Sdn Bhd (supra)).

Guided by the binding foregoing legal principles, I have examined the evidence canvassed and ventilated at the IC by the parties, and I have also duly considered the respective arguments of the parties, and I find:

That there are triable issues that require parties to canvass and ventilate them before the IC appropriately.

The claimed issue of blanket immunity that covers the subject matter of the respondent’s claim must be ventilated by the parties.

This is a significant triable issue that would deny a summary dismissal application. Whether such an issue can defeat the respondent’s claim remains to be argued and adequately determined by the IC, but not summarily.

The law is trite that any triable issue merits a trial. The 570 Respondent's is entitled to her day in Court in such circumstances and should not be denied summarily.

I find no reason to disturb the determination of the IC to dismiss the striking-out application.

Amongst the issues raised by the Learned Chairman that, 575 in my considered view, require appropriate ventilation at the trial are:

The issue before is an employment relationship/dispute matter that does not compromise AFI's autonomy.

(ii) The main source of the immunity, namely the Host Agreement, 580 expressly stated that AFI’s capacity and authority to employ staff are subject to Malaysian laws, rules and regulations and national policies.

(iii) There is no provision in the Host Agreement that the employment of staff by the Company is subject to Immunity but 585 subject to Malaysian law, rules and regulations, coupled with the fact that the laws of Malaysia shall govern the employment relationship and subject to the exclusive jurisdiction of the courts of Malaysia as stated in the contract of employment.

(iv) The Protocol Manual Diplomatic Privileges and Immunities 590 does not provide for the immunity of international organisations in employment matters or disputes.

Section 52 of the Act is also irrelevant as there is no issue on the application of the said Section in this case.

(vi) If immunity applies as submitted by the Company, it should be 595 expressly stated in the employment contract.

(vii) There is no reasonable alternative means to protect the rights of international organisation staff members, which can be a material factor to consider in any decision to grant immunity. 600

The Court of Appeal in Institut Integriti Malaysia v Roziah Harun & Anor [2024] 10 CLJ 894, CA, observed that section 29(fa) of the IRA 1967 should only be used in straightforward cases where the evidence is sufficiently compelling, and the issue can be dealt with summarily. However, where the facts 605 are convoluted, or viva voce evidence is required, section 29 (fa) would not be suitable. CONCLUSION [11] In light of the foregoing and on the balance of probabilities, I found 610 no merits in this appeal and dismissed it with costs of RM5,000.00 (subject to allocator), payable within 30 days from the date of this order. Dated 07.02.2025. 615 HAYATUL AKMAL ABDUL AZIZ JUDGE 620 HIGH COURT OF MALAYA WILAYAH PERSEKUTUAN KUALA LUMPUR 625 Parties: P. Jayasingam, together with P. Thavasevi and Sophia Maryam Ismail Messrs Zul Rafique & Partners Counsels for the Appellant 630 Nazira Binti Nasir, Respondent is self-representing.