Bridging the legal gap
The increasing demand for legal expertise to see to Malaysia-China dealings has brought about the Malaysia China Legal Co-operation Society. China’s Belt and Road Initiative has much to do with it.
SEALING a business deal with partners in China involves more than mere trust on the verbal promises made over a celebratory dinner and rounds of ganbei (bottoms up). This is where formal aspects of the agreement comes in.
Inking a legally-binding contract, which includes important content, like a dispute resolution clause, could prevent unnecessary headaches in the future.
“Mandarin-speaking Malaysian Chinese risk being too complacent. They don’t pay much attention to legal documents,” lawyer Loh Chang Woo says.
The consequences of this, he says, often include financial losses and legal tussles.
Fighting a case in China can be gruelling as Malaysians are not familiar with the socialist legal system and the language barrier for those who do not speak Mandarin.
Likewise, Chinese nationals in Malaysia also face similar obstacles.
China, Loh says, set up a global emergency hotline in 2014 to serve Chinese nationals travelling and working abroad.
“When I visited the call centre in Beijing last year, I discovered that Malaysia ranked third on the list of countries with the highest number of calls received. Most of the cases involved labour disputes and immigration issues,” Loh says.
Malaysia and China have seen tremendous growth in mutual trade and exchange of people. The two-way trade hovers around US$100bil (RM411.1bil); last year, tourist arrivals from China totalled 1.68 million. Slightly more than one million Malaysians visited China the same year.
No Malaysian law firms have a representative office in China, Loh points out.
The increasing demand for legal advice prompted him to pool together Malaysian and Chinese lawyers to form the Malaysia China Legal Cooperation Society (MCLCS).
Officially registered in July, the MCLCS currently has a network of 100 Malaysian and 30 Chinese lawyers who are committed to volunteering their legal knowledge for urgent cases and distress calls. Loh is the president.
Former Federal Court judge Tan Sri James Foong, retired Court of Appeal judges Datuk Wira Low Hop Bing and Datuk Mah Weng Kwai, former Matrade CEO Datuk Dr Wong Lai Sum are among its Malaysian advisers.
Low says the legal and business fraternities of both countries can provide legal resources and expertise with intensified business ties following China’s Belt and Road Initiative.
He adds that the MCLCS can play a positive role in coming up with solutions to legal impasse.
“One example is the recent reported dispute between a Malaysian woman married to a Chinese national in China over the custody of their child.
“Although the Malaysian was given custody rights, she could not exercise it because of territorial problems. In such circumstances, the lawyers of both countries can communicate and find a win-win situation through mediation,” he says.
An Advisory Centre for Chinese Living Abroad in Malaysia (Acclaim) is established under MCLCS with a hotline (016-9000 339) to respond to Chinese nationals in dire need of quick help in Malaysia.
Its director Thomas Chin says he has been receiving an average of five to 10 calls a day, mostly on employment-related and matrimonial matters.
Loh adds that MCLCS has also handled a cyber fraud case, where a hacker got into an email conversation between business partners from Canada and China, and sneakily provided his bank account number as the seller’s.
“Unaware that the email had been hacked, the Canadian buyer proceeded to bank in money to the account, which turned out to be a Malaysian bank account.
“When we were contacted by the Chinese seller, we alerted Bukit Aman’s anti-money laundering unit, which proceeded to freeze the account. The parties involved are now going through legal procedures to recover their money,” he says.
Loh stresses that the MCLCS’ voluntary service focuses on emergencies and does not cover business dealings, such as advice on contracts, etc.
In 2009, Loh was among a group of Asean lawyers participating in an intensive, onemonth training organised by the China Law Society in the southern Guangxi province.
One of the main differences between the Malaysian and Chinese systems is that Malaysia practises the adversarial system while China, the inquisitorial system.
In the Malaysian courts, the judge presides over a case and issues a decision based on the presentation of the lawyers from both sides while in China, the court plays an active role in discovering the facts of the case.
“When you file a case with the court in Malaysia, it will be heard. The Chinese court, meanwhile, will assess the evidence before it decides if it wants to accept a case.
“A time bar of six years for a complainant to seek redress in the court is enforced in Malaysia, but the time frame is only two years in China,” Loh says.
It is through volunteering their services at MCLCS, he adds, that the lawyers can learn about the different legal systems and get first-hand experience in dealing with nationals from the other country.
The extra legal knowledge will take them far in their careers and perhaps help expand their customer base – an indirect reward for the lawyers.
Loh says the legal system in China is catching up and is getting increasingly harmonised with international laws. With Chinese President Xi Jinping’s “Rule of Law” campaign, Loh foresees a more conducive business environment for foreign investors.
Presently, the operations of MCLCS are supported by membership fees and donation
from Chinese enterprises, one of which is Taetea (M) Sdn Bhd, the local branch of a tea merchant company from China.
Its experience speaks of the need to engage a local lawyer. When it wanted to enter the Malaysian market in 2013, it discovered that its trademark had been maliciously registered by someone else in 2006.
The negotiation with the trademark owner took over a year before Taetea paid to get the trademark back.
Loh says Chinese nationals are usually reluctant to go to courts and prefer out-of-court settlement.
“It is their culture to try to rely on ‘guan xi’ (ties) to pull strings and sort out their woes,” he says.
It is the MCLCS’ hope to steer away misunderstanding between people of the two countries and to protect the good name of Malaysia.
“We welcome more lawyers to join us,” Chin says.
MCLCS also has law students from Universiti Malaysia and Multimedia University who have pledged to volunteer their services, like acting as translators at police stations when the need arises.
Prior to the establishment of MCLCS, some of its current committee members have undertaken the initiatives to engage with their Chinese counterparts.
They have been hosting law students from Southwest University of Political Science & Law in Chongqing for industrial training in Malaysia and members from Guangxi Lawyers Association to observe the Malaysian legal practice.
Wei Yanting, a lawyer from Nanning, Guangxi, was one of the lawyers who visited Malaysia through the initiative and joined MCLCS later.
She finds the formation of MCLCS meaningful and practical.
“I first started to familiarise myself with the Malaysian law to better serve my Malaysian clients in China. Through the process, I have developed a deep interest in Malaysian law. It has been an interesting and enjoyable experience,” the 28-year-old says.
Based on her experience, most of the legal disputes faced by Malaysian companies in China involve contract, loan and equity. Malaysian individuals mostly seek legal assistance to settle matrimony, loan and personal investment matters.
“Since both countries have different legal systems, the lawyers also play the role of ‘legal translators’ to explain Chinese law to our Malaysian clients,” she says.
Among the future programmes Loh has in mind for MCLCS include talks by criminal lawyers for its volunteers, and seminar to brief Chinese expatriates and students on their legal rights in Malaysia.
The logo of MCLCS is a monochrome illustration that combines a hibiscus and a panda. It reflects the “black-andwhite” approach of law, an unambiguous, uncompromising attitude with clear-cut principles, Loh explains.
Meanwhile, Bar Council secretary Karen Cheah Yee Lynn, when contacted, says it has no objection to it using the name of “MCLCS”.
“We believe the name does not cause confusion among members of the public. By looking at the name, people will not jump into conclusion that it is a law firm providing legal services,” she says.