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Sediabena Sdn Bhd v Qimonda Malaysia Sdn Bhd (Federal Court) |
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The decision has a significant impact on the legal status of retention sums in the construction industry and the Sediabena case now represents the state of the law in Malaysia. In summary, the decision holds that retention sums withheld by an employer under a construction contract are monies held in trust and do not form part of the employer’s general funds in the event of the employer’s liquidation, notwithstanding that the retention sums were not set aside in a designated account separate from the employer’s general funds. More details on the Federal Court decision will follow. To read more about the Court of Appeal decision, please enter our archives.
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