MH370: Next-of-kin's appeal to retain MAB as defendants allowed

PUTRAJAYA: A ray of hope has emerged for the next-of-kin of three passengers of the missing Malaysia Airlines flight MH370 who are seeking to retain Malaysia Airlines Berhad (MAB) as a defendant in their lawsuit.

This follows a decision by a Federal Court three-man panel chaired by Chief Judge of Sabah and Sarawak Tan Sri Richard Malanjum to allow them to appeal against the High Court ruling removing MAB as a defendant.

Justice Malanjum, who presided with Federal Court judges Tan Sri Abu Samah Nordin and Datuk Aziah Ali, granted leave to the children and parents of engineers Tan Ah Meng, 46, and his wife Chuang Hsiu Ling alias Cindy Chuang, 45, to appeal the ruling.

The couple and their eldest son, Tan Wei Chew, 16, were among 239 passengers and crew on board the plane which disappeared during a flight from Kuala Lumpur to Beijing on March 8, 2014.

Justice Malanjum allowed the leave-to-appeal application on a single legal question to be considered by the Federal Court.

The question is whether the non-vesting of the contingent liability of the defendant, Malaysian Airline System Berhad (MAS), to MAB under the Malaysia Airlines System Bhd 2015 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.

MAB was incorporated on Nov 7, 2014, as part of a restructuring exercise that saw the national carrier changing hands from MAS to MAB.

The Court of Appeal on Oct 7 last year allowed MAB's appeal to be struck out as a defendant in the suit after the court agreed with the submission by MAB counsel that MAB should not be named as defendant in the lawsuit because there was a vesting order under the Act which stated that MAS liabilities transferred to MAB did not include the MH370 and MH17 lawsuits. Flight MH17 was shot down over eastern Ukraine on July 17, 2014.

The other defendants named in the lawsuit are MAS, the Malaysian Civil Aviation Department (DCA) director-general and the Malaysian Government.

The five family members, including the couple's teenage sons Tan Wei Hong and Tan Wei Jie; Tan Ah Meng's parents Tan Hun Khong, 85, and Lai Chew Lai, 83; and the mother of Hsiu Ling, Chuang Hung Chien, 76, sued for damages over the loss of the couple and their son.

In court, the family's lawyer Tommy Thomas submitted that they were concerned that it would be "a paper judgment" if the High Court ruled in favour of the family as MAS would be a shell company because all its assets had been transferred to MAB except the MH370 and MH17 lawsuits.

He said that according to the vesting order gazetted on Nov 6 last year, pursuant to the Malaysian Airline System Berhad (Administration) Act 2015, it appeared that MAS assets such as aircraft, buildings and properties were transferred to MAB and about 1,000 MAS liabilities relating to its trade and business creditors, such as suppliers of catering and maintenance services, were also transferred to MAB.

Thomas said none of the 500 MH370 and MH17 passengers' families' claims were transferred.

He said there were a total of 27 lawsuits filed by families of passengers on board the MH370 flight pending at the Kuala Lumpur High Court and litigation pending in the courts in the United States, China and Australia.

Lawyer Logan Sabapathy, acting for MAB, submitted that MAB did not exist at the time of the incidents and claims of alleged stripping of assets were speculative.

He said the insurance policy taken up by MAS for MH370 was not transferred to MAB and remained in MAS. – Bernama