The Statutory Derivative Action in Malaysia: Comparison with an Australian Judicial Approach

Abstract

This article examines the operation of the Malaysian statutory derivative action through an analysis of Malaysian judicial decisions from 2008 to 2015. It considers the extent to which the statutory derivative action has achieved its underlying objective of facilitating better shareholder access to redress. The analysis focuses on applications for leave to bring derivative actions for breaches of directors’ duties, considering the manner in which the courts have interpreted and applied the criteria for granting leave and the rate of success in obtaining leave. The findings are compared with an analysis of Australian statutory derivative actions and situated in a broader comparative context. The article considers the effectiveness of the Malaysian statutory derivative action in facilitating better shareholder access to redress and canvasses possible explanations for the Malaysian approach.

Keywords: Derivative action, shareholders, judicial decisions, company law, Malaysia