A stay of execution of a judgment is only granted where special circumstances are shown. As Justice Augustine Paul noted in the oft-quoted case of Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257, “there are many factors that may constitute special circumstances”, but is the fact that a successful litigant, being a foreign entity, one of them?
In a key ruling for cross-border litigants, the Court of Appeal in United Overseas Bank (China) Limited, Chengdu Branch v Siow Kwang Joon @ Siow Kwong Shang [Civil Appeal No.: J-02(IM)(NCC)-1055-06/2024] held that the mere fact that a successful litigant is in a foreign jurisdiction does not justify a stay of execution of a monetary judgment.
Case Snapshot
The Plaintiff is a licensed commercial bank in China. It sued the Defendant under a personal guarantee given to secure a RMB 92.5 million facility granted to a Chinese company.
On 10.10.2023, the High Court allowed the Bank’s claim after a full trial and entered judgment against the Defendant.
On 12.6.2024, the High Court granted a stay of execution of the judgment pending the disposal of the Defendant’s appeal. In arriving at its decision, the High Court held that there was no assurance the judgment sum could be recovered by the Defendant if he succeeds on appeal because the Bank is a foreign entity.
Court of Appeal’s Decision
On 16.4.2025, the Court of Appeal unanimously allowed the Bank’s appeal and set aside the stay granted by the High Court. The Court of Appeal held that the High Court erred in principle in granting the stay, as the Defendant must show, by affidavit evidence, real difficulty in recovering the judgment sum. The mere fact that the successful litigant is a foreign plaintiff is not sufficient – particularly where it is an established financial institution.
In its oral grounds, the Court of Appeal clarified the test as follows –
“In our view, merely because a successful litigant is overseas does not constitute special circumstances. It must be shown the difficulty of recovering money on affidavit. In the instant case, the successful litigant, from the affidavit evidence, is a very established financial institution which operates throughout Asia. It has not been shown that this is an impecunious litigant who resides overseas. We cannot say that merely being outside the jurisdiction will give rise to a special circumstance on this ground.”
The Bank was represented by Lee Hishammuddin Allen & Gledhill. The appeal was successfully argued by Chia Oh Sheng, Nicola Tang Zhan Ying, and Chris Lim Yen Hao.
If you have any queries, please contact Associate Chris Lim Yen Hao (chs@lh-ag.com), or Partners Chia Oh Sheng (cos@lh-ag.com) and Nicola Tang Zhan Ying (tzy@lh-ag.com).
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