Desa Tiasa Sdn Bhd v CME Group Berhad & Anor

Appellant(s): Desa Tiasa Sdn Bhd

Respondent(s):

• Bellajade Sdn Bhd
• Cme Group Berhad

• YAA Datuk Hajah Azizah binti Haji Nawawi
• YA Dato' Azizul Azmi Bin Adnan
• Dato' Dr. Choo Kah Sing

• The proposed intervener, an unsecured creditor, obtained a Federal Court judgment against the company under judicial management for rental arrears.
• The proposed intervener subsequently filed a winding-up petition against the company, which was stalled when the appellant applied for the company to be placed under judicial management.
• The proposed intervener sought to intervene in the judicial management proceedings, arguing that its judgment debt would be prejudiced, and the High Court allowed the intervention.

• Whether an unsecured creditor has the right to intervene in judicial management proceedings convened under the Companies Act 2016.
• Whether Rule 13 of the Companies (Corporate Rescue Mechanism) Rules 2018 (CRM Rules), which limits who may appear at a judicial management hearing, is ultra vires the Companies Act 2016.
• Whether an earlier unreported Court of Appeal decision, cited by the High Court, was binding on the present Court without issued grounds of judgment.

• The Court allowed the appeal, ruling that an unsecured creditor is precluded from intervening in judicial management proceedings.
• The Court held that Rule 13 of the CRM Rules clearly specifies that only secured creditors and persons entitled to appoint a receiver/manager may appear to oppose a judicial management application, thereby excluding unsecured creditors.
• The Court found that Rule 13 is not ultra vires the Companies Act 2016, as the Act does not prohibit unsecured creditors from appearing, and the Rule merely provides specific procedures that must be read harmoniously with the parent Act.
• The Court also held that an earlier Court of Appeal decision, without issued grounds of judgment, could not be considered a binding authority as its ratio decidendi could not be ascertained.