KUALA LUMPUR – The High Court was told today that findings made in an earlier case concerning former Nautilus Tug & Towage Sdn Bhd (NTT) director Datuk Seri Timor Shah Rafiq’s alleged conflict of interest that led to his position as a director being vacated in the company did not mean the judge had prejudged the issues in a separate derivative action and that the earlier findings in a separate action cannot be a basis to seek the recusal of a judge.
Senior advocate Datuk Seri Rajan Navaratnam, representing NTT, said the earlier findings must be viewed in their proper context and based on the differing facts , amid an application by Timor seeking the judge’s recusal from hearing the current derivative suit.
Rajan’s submissions were made during the company’s application for leave to intervene and to be allowed to participate to oppose the recusal application, which Rajan argued was frivolous and an abuse of process.
Rajan submitted that the company had an interest in the said recusal application as the interest of the company could be prejudiced and also be subjected to costs in the event the Court dismisses the recusal application. The recusal bid centres on whether findings made by the judge in an earlier proceeding, OS559, could amount to a real danger of bias in Suit 403.
Counsel for Timor argued that the earlier judgment contained strong findings which overlapped with issues that would now have to be decided in Suit 403.
Among the findings relied on were references to a “complete and irreversible collapse of directorial loyalty”, an “acute and irreconcilable structural conflict of interest” and the conclusion that Timor’s loyalty to NTT had “wholly transferred” to its minority shareholder Nautical Supreme Sdn Bhd (NSSB).
The court was also told that the earlier judgment found Timor had acted as NSSB’s agent within NTT and had used his directorship to advance NSSB’s commercial and litigation agenda.
The recusal applicant’s counsel argued that these findings were relevant to several live issues in Suit 403, including whether there was a conflict of interest, whether Timor had acted against NTT’s interests and whether the derivative action was brought in bad faith.
Rajan’s side, however, argued that the earlier findings in OS 559 concerned the circumstances and conduct of Timor that led to him losing his position as a director and that the findings and decision in OS 559 should not be treated as though they had already determined the substantive issues in Suit 403.
Counsels acting for the other Defendants in Suit 403 in opposing the recusal application also urged the court to read the earlier judgment as a whole rather than isolating individual findings to support the allegation of real danger of bias.
The court heard that the applicable test was whether the circumstances could cause a “fair-minded and informed bystander to entertain a fear of real danger of bias”.
Counsels acting for the Defendants in the derivative suit opposing the recusal application further argued that the threshold was a high one and that the mere fact that a judge had previously made adverse findings concerning a party did not, by itself, establish a real danger of bias.
They also argued that the earlier judgment dealt with Timor’s conduct as a director and did not determine the allegations against the defendants in Suit 403.
The court was further told that the parties’ long-running corporate dispute had generated numerous legal proceedings, and that the acrimony between them should not be confused with judicial bias.
Earlier, the court dismissed Enclosure 184, NTT’s application by the independent board of directors for leave to intervene separately in the proceedings.
Rajan had argued that NTT needed to protect its own financial, reputational and legal interests because the derivative action was being pursued in its name and that NTT would be exposed to any costs orders if made by the Court.
The opposing side objected, arguing that NTT was already the plaintiff and could not appear twice in the same proceedings — once as plaintiff and again as an intervener.
The judge agreed, ruling that NTT had failed to demonstrate a distinct legal interest that would justify intervention although stating that NTT’s interest may be affected by any costs should it be awarded. The Court then said that the issues of costs will be dealt after the determination of the recusal application.
“For want of a distinct individual interest, Enclosure 184 is dismissed,” the judge said, with costs reserved.
The ruling came in the context of Suit 403, a statutory derivative action being pursued in NTT’s name after Timor obtained leave under the Companies Act 2016.
NTT was established as a joint venture to build, own and operate seven harbour tugs for Vale’s operations in Lumut, Perak.
The company was ultimately owned 80% by Azimuth Marine Sdn Bhd and 20% by NSSB, with the shareholder relationship later deteriorating into a series of disputes involving corporate governance, directors’ duties, the company’s operations and financial matters.
The current derivative action is linked to allegations concerning payment of management fees.
The dispute has also involved earlier litigation over an NTT tug which sank in Lumut, as well as disagreements over the management and ownership of the company.
Today’s hearing, however, focused principally on whether NTT could intervene separately and whether the judge should recuse himself from Suit 403.
The judge had fixed tomorrow, September 22, 2026 at 9.00 am for decision on the recusal application after proceedings concluded today. – September 22, 2026