Federal Court to decide if MAB can be cited in MH370 suit

Can the new national carrier, Malaysia Airlines Bhd (MAB), be cited as a defendant in a suit filed by the next of kin of those on board the ill-fated MH370 flight to Beijing? This is to be decided by the Federal Court.

The Federal Court today granted leave (permission) for five plaintiffs, including two Malaysian teenagers whose parents were on board the March 8, 2014, flight to pose a question of law on the liability of the new national carrier for the tragedy, after it took over from the old one.

The two boys, aged 12 and 14, whose parents Tan Ah Meng, 46, and his wife Chuang Hsiu Ling @ Cindy Chuang, 45, and eldest brother Tan Wei Chew, 16, were among 239 passengers and crew on board when the aircraft disappeared during the Kuala Lumpur-Beijing flight.

They are challenging the Court of Appeal decision last October that allowed MAB's application to strike out from being made a defendant in the suit and retain the old airline company, Malaysia Airlines System Bhd (MAS), as the defendant.

The decision today by a three-member panel led by Chief Judge of Sabah and Sarawak Richard Malanjum was important as it will impact 26 other pending suits on the MH370 in Malaysia, where MAB was also named as a party, as well as to related suits filed in Australia, China and the United States.

The plaintiffs are worried that if they succeed in their claim, they would only obtain a paper judgment as all of MAS' assets have been transferred to MAB, with the exception of two liabilities - the MH370 and MH17 lawsuits.

Originally, six questions of law were posed but two were subsequently withdrawn.

However, the apex court only allowed one question to be decided on.

This is on whether the non-vesting of the contingent liability of the defendant, MAS, to MAB under the Malaysia Airlines System Bhd 2015 Act (MAS Act), to satisfy any judgment entered against MAS after all its assets are vested in MAB, would constitute “asset-stripping” of MAS, and carried out in order to defeat the satisfaction of such judgment against MAS; in consequence, whether it is an unlawful exercise of discretion under the act.

The other two judges who unanimously allowed the question were Justice Abu Samah Nordin and Justice Aziah Ali.

A decision on the question may equally impact the position of MAB in relation to suits by next of kin of those involved in the MH17 tragedy. Flight MH17 was shot down over eastern Ukraine on July 17, 2014.

The family members were represented by lawyers Tommy Thomas, Sangeet Kaur Deo, Ganesan Nethi and Tam Chee Kiang.

Thomas told the court that it would be a travesty of justice, and great tragedy, if the plaintiffs were only allowed to sue MAS which is now a shell company.

“Furthermore, we are bound by the Montreal convention and MAB was named as a party in the US, China and Australia. We do not want a situation in Malaysia where MAB cannot be sued.

Under the convention, the courts should adopt uniform interpretation on liability and should not cause confusion on matters coming out of the same incident.

Meanwhile, MAB lawyer Logan Sabapathy said under the MAS Act it was stated that MAS’ liabilities transferred to MAB did not include the MH370 and MH17 lawsuits.

He added that the insurance coverage of MH370 from MAS was not moved to MAB.

Logan said MAB did not exist at the time of the incident and claims of alleged stripping of assets are "lies and speculative".- Mkini