A Critical Analysis of Legal Gaps in Malaysia's Judicial Management Regime

Malaysia has introduced a primary corporate rescue mechanism to rehabilitate financially distressed companies by virtue of Companies Act 2016, i.e Judicial Management (JM). While its legislative objectives are clear which is to provide a ‘second chance’ to the companies and to promote a rescue-oriented insolvency framework, the mechanism however has remained relatively underutilized despite the recent amendment of legislation in 2024 and persistently face several structural and procedural challenges.
This article critically explores the legal gaps in Malaysia’s judicial management regime in serving their objectives to rehabilitate companies and also in protecting the stakeholder interest through a doctrinal and comparative legal analysis, with particular reference to United Kingdom’s administrative regime under Insolvency Act 1986. The comparative analysis demonstrates that the United Kingdom has adopted a more flexible and rescue-oriented approach that better balances the interests of debtors and creditors.

Judicial Management, Malaysia, United Kingdom, Loopholes, Stakeholder interest

1. Balan, S. (2024). Adjusting the imbalance caused by the secured creditor’s veto in Malaysian judicial management: lessons from Singapore. Journal of Corporate Law Studies, 24(2), 567–586. https://doi.org/10.1080/14735970.2024.2440946 [Google Scholar] [Crossref]

2. Chen, T. W., Azmi, R., & Abdul-Rahman, R. (2024). The path to judicial management in Malaysia is paved with obstacles: Lessons from Singapore and the United Kingdom. Asian Journal of Comparative Law, 19(1), 1–30. [Google Scholar] [Crossref]

3. Chen, T. W., Azmi, R., & Abdul Rahman, R. (2021). A philosophical analysis of the corporate rescue mechanism under the Companies Act 2016. UUM Journal of Legal Studies, 12(2), 167–192. [Google Scholar] [Crossref]

4. Companies Act 2016 (Act 777) (Malaysia). [Google Scholar] [Crossref]

5. Companies (Amendment) Act 2024 (Malaysia). [Google Scholar] [Crossref]

6. Corporate Insolvency and Governance Act 2020 (United Kingdom). [Google Scholar] [Crossref]

7. Cimb Islamic Bank Bhd V. Wellcom Communications (NS) Sdn Bhd & Anor[2019] 4 CLJ 1 Desa Tiasa Sdn Bhd v CME Group Bhd & Anor [2025] MLJU 4345 (CA) Enterprise Act 2002 (United Kingdom). [Google Scholar] [Crossref]

8. Finch, V., & Milman, D. (2017). Corporate Insolvency Law: Perspectives and Principles (3rd ed.). Cambridge University Press. [Google Scholar] [Crossref]

9. Goode, R. (2022). Principles of Corporate Insolvency Law (6th ed.). Sweet & Maxwell. [Google Scholar] [Crossref]

10. Insolvency Act 1986, c. 45, Schedule B1 (United Kingdom) [Google Scholar] [Crossref]

11. KH Lim & Yap. (2023, February 10). Abuse of the judicial management mechanism [Google Scholar] [Crossref]

12. Kumaraendran, L. (2019, March 9). Judicial Management in Malaysia | Thomas Philip [Google Scholar] [Crossref]

13. a. Advocates and Solicitors, Kuala Lumpur, Malaysia. Thomas Philip Advocates and [Google Scholar] [Crossref]

14. b. Solicitor. https://www.thomasphilip.com.my/articles/judicial-management-in-malaysia/ Leadmont Development Sdn Bhd v Infra Segi Sdn Bhd & Another Case [2019]. [Google Scholar] [Crossref]

15. Lee Shih. (2019, February 14). Case update: Court of Appeal on staying the dismissal of judicial management. The Malaysian Lawyer. [Google Scholar] [Crossref]

16. https://themalaysianlawyer.com/2019/02/14/case-update-stay-dismissal-judicial-manage ment/ [Google Scholar] [Crossref]

17. Lokman, N., Mohamed Khudzairi, J., & Othman, S. (2020). Rehabilitating ailing Malaysia companies using the new corporate rescue mechanism. Journal of Administrative Science, 17(1), 96–104. [Google Scholar] [Crossref]

18. Lui & Bhullar. (2021, January 20). Latest development for judicial management in Malaysia. [Google Scholar] [Crossref]

19. https://www.luibhullar.com/post/latest-development-for-judicial-management-in-malaysi a [Google Scholar] [Crossref]

20. Nathan, S. (2020). Judicial Management in Malaysia: Is the Regime Working as Intended? Malayan Law Journal, 5 [Google Scholar] [Crossref]

21. Review Committee on Insolvency Law and Practice. (1982). The Cork Report (Cmnd 8558). Re Leadmont Development Sdn Bhd [2018] MLJU 1320; [2018] 1 LNS 1420 Re T&D Industries plc [2000] 1 WLR 646. [Google Scholar] [Crossref]

22. Re Transbus International Ltd [2004] EWHC 932 (Ch). [Google Scholar] [Crossref]

23. SKRINE. (2019, July 31). No second bite at the cherry. [Google Scholar] [Crossref]

24. https://www.skrine.com/insights/newsletter/july-2019/no-second-bite-at-the-cherry [Google Scholar] [Crossref]

25. S. Nathan, R. (2020). DOES JUDICIAL MANAGEMENT IN MALAYSIA SUFFICIENTLY [Google Scholar] [Crossref]

26. a. EMBODY a RESCUE CULTURE? DOES JUDICIAL MANAGEMENT IN MALAYSIA [Google Scholar] [Crossref]

27. b. SUFFICIENTLY EMBODY a RESCUE CULTURE? [Google Scholar] [Crossref]

28. https://journalsonline.academypublishing.org.sg/Journals/Singapore-Academy-of-Law-Jo urnal-Special-Issue/e-Archive/ctl/eFirstSALPDFJournalView/mid/513/ArticleId/1526/Cit ation/JournalsOnlinePDF [Google Scholar] [Crossref]

29. Shah, A. R. S. M. A. (n.d.). JUDICIAL MANAGEMENT IN MALAYSIA : A COMPARATIVE ANALYSIS AND REFORM AGENDA. Zenodo (CERN European Organization for [Google Scholar] [Crossref]

30. Nuclear Research). https://doi.org/10.5281/zenodo.18896782 [Google Scholar] [Crossref]

31. UK Government. (1986). Insolvency Act 1986, Schedule B1, paragraph 14. legislation.gov.uk. [Google Scholar] [Crossref]

32. https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/14 [Google Scholar] [Crossref]

• Methane Emissions from Municipal Solid Waste - Case Study in Cai Rang District, Can Tho City, Vietnam
• Youth Activism, Intentional Integration of Policies to Raise Awareness on Climate Change Action among the Youth
• Breathing Spaces: Environmental & User Experience in Dhanmondi and Zigatola Multistoried Apartments, Dhaka, Bangladesh
• Effects of Solid Waste Disposal on Soil Quality in Makurdi Metropolis, Benue State, Nigeria
• Environmental Impact of Artisanal and Small-Scale Gold Mining in Borgu Local Government Area