In Samsuri Baharuddin v Mohamed Azahari Matiasin the claimants entered into a joint venture agreement with Borneo Samudera Sdn Bhd.(1) A dispute arose and the parties decided to settle the dispute by arbitration in Sabah.
An issue arose during the course of the arbitration about legal representation by a West Malaysian lawyer at the arbitration hearing in Kota Kinabalu, Sabah. An application was made by the respondent for, among other things, a declaration that foreign lawyers who are not advocates within the meaning of the Advocates Ordinance 1953 are not prohibited from representing parties to arbitration proceedings in Sabah and the Advocates Ordinance has no application to arbitration proceedings in Sabah.
The phrase "to practise in Sabah" is defined in Section 2 of the Advocates Ordinance as to perform in Sabah:
"(a) any of the functions which in England may be performed by a member of the Bar as such; or
(b) any of the functions which in England may be performed by a Solicitor of the Supreme Court of Judicature as such."
Section 8(1) of the Advocates Ordinance, which confers exclusive right to practise in Sabah, provides that:
"Subject to subsection (2) and to section 9, advocates shall have the exclusive right to practise in Sabah and to appear and plead in the Federal Court in Sabah and in the High Court and in all courts in Sabah subordinate thereto in which advocates may appear, and as between themselves shall have the same rights and privileges without differentiation."
The High Court held that foreign lawyers who are not advocates within the meaning of the Advocates Ordinance are prohibited from representing parties in arbitration proceedings in Sabah. This decision was overturned by the Court of Appeal, which held that the Advocates Ordinance did not provide that advocates admitted in Sabah have the exclusive right to represent parties at arbitration proceedings in the state of Sabah. The Court of Appeal recorded the following observation in its judgment:
"We agree with the submission of the appellant that by reason of the definition of the words 'to practise in Sabah' in section 2(1) of the Advocates Ordinance in Sabah, the exclusivity of right to practise for advocates in Sabah is tied up to the exclusive right of practise of barristers and solicitors in England; and since barristers and solicitors in England have no exclusive right of representation before arbitration proceedings in England, it follows, therefore, that advocates of Sabah also have no exclusive right of representation at arbitration proceedings in the State of Sabah."
The matter went on appeal to the Federal Court, which overturned the Court of Appeal decision.
The Federal Court held that Sections 2(1)(a) and (b) of the Advocates Ordinance must be read with Section 8. The statutory right given to advocates admitted in Sabah to practise in Sabah by virtue of Section 8(1) of the Advocates Ordinance cannot be taken away by tying the non-exclusive right of barristers and solicitors in England to appear for parties in arbitration proceedings with the practice in Sabah.
With this decision, foreign lawyers who are not advocates within the meaning of the Advocates Ordinance are prohibited from representing parties in arbitration proceedings held in Sabah.
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