Nautilus Tug & Towage Sdn Bhd v Dato' Seri Suresh Emmanuel Abishegam (WA-22NCC-151-03/2023)

DATO’ SERI SURESH EMMANUEL ABISHEGAM (No. K/P: 601022-10-6345)

DATO’ AHMAD JOHARI BIN TUN ABDUL RAZAK (No. KP: 541129-06-5107)

AJAIB HARI DASS

DATO’ ABD LATIFF BIN AHMAD (No. KP: 580709-01-5925)

JAYA SUDHIR A/L JAYARAM (No. KP: 670204-71-5781) S/N ba3arIiI7EKOesu1pd1uWg

AZIAN BINTI ABDUL AZIZ (No. KP: 770720-03-6804)

NAUTICAL SUPREME SDN BHD [No. Syarikat: 201201019240 (989385-H)]

AZIMUTH MARINE SDN BHD [No. Syarikat: 201101033690 (961825-A)] …DEFENDAN-DEFENDAN DAN DATO’ WAN MOHAMED YAACOB BIN DATO’ WAN SAILADIN (No. K/P: 550627-05-5221) … PIHAK KETIGA GROUNDS OF JUDGMENT (Enclosure 418)

This is a derivative action commenced by Dato’ Seri Timor Shah Rafiq (“Timor”) in his capacity as a director of the Plaintiff, Nautilus Tug & Towage Sdn Bhd (“NTT”). The writ was filed on 24-3-2023

Trial of this action started on 18-6-2024 and had proceeded for 18 trial days as at 6-5-2025. It was scheduled to resume on 18-3-2026 for a further 18 days, with half of those dates being scheduled throughout March 2026, when the 1st and 8th Defendants S/N ba3arIiI7EKOesu1pd1uWg (hereafter, “D1” and “D8” respectively) took out an application to strike out this action or stay all further proceedings on 27-2-2026 (“Enclosure 418”).

D1 is one of the majority on the Board of Directors of NTT (“Majority Directors”), and D8 is the majority shareholder of NTT. The grounds for Enclosure 418 are that the Majority Directors had declared Timor’s office as a director of NTT vacant on 19-9-2025, and therefore, they took the position that Timor had lost his standing under section 345 of the CA to carry on this action.

This is not the only derivative action that Timor is pursuing. In particular, Timor is seeking leave to commence another action against the Majority Directors before this Court in Originating Summons No: WA-24NCC-677-12/2023 (“OS 677”). On 26-2- 2026, this Court had dismissed an application filed on behalf of NTT by the Majority Directors to strike out OS 677 on the same grounds.

The reasons for the decision in OS 677 are set out in the Grounds of Judgment dated 11-3-2026 (“Striking Out GOJ”). Essentially, this Court is of the view that locus standi to bring an application under section 347 of the CA is not lost due to a change of capacity, so long as the complainant possessed the requisite capacity at the date of the application.

The relevant background of NTT as a joint venture between Nautilus Supreme Sdn Bhd (“D7”) as a minority shareholder of NTT and D8 as the majority shareholder, the control structure of NTT, S/N ba3arIiI7EKOesu1pd1uWg the long running disputes between the shareholders and the several challenges to Timor’s position as the nominee director of D7 on the Board of Directors of NTT, are a matter of record.

The only material difference in arguments for the striking out here, compared to arguments made in OS 677, is that counsel for D1 and D8 made extensive references to a Corporate Law Reform Committee’s Consultative Document (“CLRC Paper”) to make the point that former directors as a class, have been deliberately omitted as a “complainant” in section 345 of the CA.

As this Court has noted, it is not a point of contention that a former director does not have locus standi to initiate a leave application to commence a derivative action. However, a distinction was drawn between the complainant’s initial qualification (initiation locus standi) and his standing to continue the proceedings (continuation locus standi). The CLRC Paper did not address the latter, which is the matter in issue and arising for the first time in our jurisprudence on the statutory derivative action procedure.

The dismissal of the striking out application in OS 677 is pending appeal to the Court of Appeal.

Based on the common facts and issues in the striking out applications in OS 677 and here, this Court determined that Timor, as a former director of NTT, can maintain statutory derivative proceedings properly commenced, even if he has ceased to be a director. This conclusion applies with greater force here as the S/N ba3arIiI7EKOesu1pd1uWg derivative action has already commenced in the name of NTT as the Plaintiff.

In any case, as the hearing of Enclosure 418 progressed, the prayer to strike out this action was not ultimately pressed. The arguments by counsel in Enclosure 418 pivoted to the alternative prayer for a stay of these proceedings pending the application by D1 and D8 to set aside the Leave Order, filed on 9-2-2026 in the concluded Originating Summons No. WA-24NCC-392-08/2018 (“OS 392”).

As far as this Court could discern, the premise for the setting aside application in OS 392 was presented as the retrospective effect of the vacancy of Timor’s office at the hands of the Majority Directors on 19-9-2025, 4 years after the Leave Order on 21-9-2021. Therefore, D1 and D8 argued that they should not be subjected to substantial, irretrievable costs and prejudice of defending an action pursued or maintained while Timor has not established his standing to continue the prosecution of this action.

The Court’s power and discretion to order a stay of court proceedings, including a limited stay pending the determination of related proceedings before another Court must be exercised judiciously.

Counsel for the 5th Defendant (“D5”) who supported a stay of proceedings, cited Huang Min (in her personal capacity as the mother of the deceased, Zhang Meng and for the benefit of the deceased’s family as defined under the Carriage by Air Act S/N ba3arIiI7EKOesu1pd1uWg 1974) & Ors v Malaysian Airline System Bhd & Ors [2018] 2 MLJ 450 (“Huang Min”) for the proposition that the Court should weigh the balance of justice and convenience whether to stay proceedings when parallel proceedings are afoot.

Huang Min turned on its own facts, but if principles for stay of parallel proceedings are to be extracted from this decision of the Court of Appeal, the general rules propounded by the majority and its findings were as follows: a) No automatic stay A stay should not be granted merely because parallel proceedings exist in another jurisdiction. The Malaysian court is not subordinate to the US court, so uncertainty in the US jurisdictional ruling is not itself a reason to halt Malaysian proceedings. b) Special Circumstances Required A stay will only be granted in rare or exceptional circumstances. The mere fact that the Malaysian action was filed as a protective writ does not, by itself, amount to such circumstances. c) Balance of Justice and Convenience The court must weigh prejudice to the defendants against the benefits to the plaintiffs. Here, the fourth to seventh respondents were not parties to the US suits, yet would be left in limbo indefinitely if a stay were granted. S/N ba3arIiI7EKOesu1pd1uWg d) Expeditious Disposal as Priority Judicial discretion must favor the efficient and timely resolution of cases in Malaysia. Granting a stay would compromise this principle.

In light of this Court’s view on the issue of locus standi, the outcome of the pending challenge to the validity of Timor’s alleged vacancy of office in Originating Summons No. WA-24NCC-559-10/2025 (“OS 559”) would not affect these proceedings in any event. The Court does, however, accept that the outcome of the application to set aside the Leave Order may have a bearing on the validity of the present proceedings.

Nevertheless, in the exercise of its discretion, this Court did not consider the possibility of wasted costs to D1 and D8 in defending these proceedings to constitute special circumstances justifying a temporary stay, nor did it consider that factor sufficient to tilt the balance of justice in favour of subordinating this action to the setting-aside application in OS 392. The following factors were taken into account: a) This action was commenced earlier and has progressed to an advanced stage, with NTT having closed its case after 18 days of trial. The trial was scheduled to resume in March 2026. In these circumstances, it is neither appropriate nor justified for this action to be subordinated to the setting-aside application in OS 392, the outcome of which remains uncertain; S/N ba3arIiI7EKOesu1pd1uWg b) The setting-aside application in OS 392 will, in all likelihood, be informed by the appellate court’s final determination of the locus standi issue decided in the striking-out judgment in OS 677, which is presently under appeal at a preliminary stage, and a final determination is not imminent; and c) On 12-12-2024, an earlier attempt by D8 to stay these proceedings pending an oppression action commenced by AMSB, 9 days into the trial of NTT’s case, was rejected by Justice Atan Mustaffa Yussof Ahmad. Justice Atan held: “[37] … The Court of Appeal in International Construction established that the threshold to stay proceedings is “very high” as the trial court is required to dispose of cases expeditiously and fairly. The advanced stage of these proceedings weighs heavily against granting a stay. The trial commenced on 18.6.2024 and as at the date of the hearing of this application, has progressed through nine days, with a further nine days fixed. The proceedings themselves trace back to 7.8.2018 when DST first sought leave to commence the derivative action. Over this six-year period, parties have invested substantial resources in preparing 50 volumes of documents and 13 witness statements.”

In the final analysis, this Court considered that the complaints sought to be ventilated by these proceedings arose more than 10 years ago and the resolution of these complaints have been grossly delayed by already protracted litigation. At this juncture, the S/N ba3arIiI7EKOesu1pd1uWg status quo not only permits but compels this Court to proceed with the trial in order to secure the efficient and fair resolution of the action, in the overall interests of justice. Bertarikh: 30 Mac 2026 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA KUALA LUMPUR S/N ba3arIiI7EKOesu1pd1uWg Peguam Untuk Plaintif: Lim Chee Wee (Jasper Tan Li Jen, Wee Hee dan Aaron Mah Zhee Haang bersamanya) Tetuan Lim Chee Wee Partnership Untuk Defendan Pertama dan Kelapan: Kanarasan a/l Ghandinesen, Alex De Silva (G Ragumaren, S Ramesh, S Surendran dan Lorelle Nathan bersamanya) Tetuan Ghandi Untuk Defendan Kedua, Ketiga, Keempat dan Keenam Chetan Lachman Jethwani (Ivy Shu bersamanya) Tetuan Chetan Jethwani & Company Untuk Defendan Kelima DP Naban (Austen Emmanuel Pereira bersamanya) Tetuan Rosli Dahlan Saravana Partnership Untuk Defendan Ketujuh dan Pihak Ketiga Yow Pit Pin Jack (Lee Ji Kean bersamanya) Tetuan Rahmat Lim & Partners S/N ba3arIiI7EKOesu1pd1uWg