The High Court in Ipoh has dismissed a bankruptcy petition filed by Singapore-based Resorts World at Sentosa Pte Ltd against a Malaysian restaurant owner over an alleged RM26 million (US 6.6 million) debt, ruling that the claim could not be enforced because it arose from gambling.

Justice Moses Susayan said the debt linked to Lee Fook Kheun could not support bankruptcy proceedings in Malaysia because gambling-related liabilities are void and illegal under local law. The decision adds to recent judicial confirmation that Malaysian public policy does not recognize gambling debts as legally recoverable claims.

The case centered on an effort by the Singapore casino operator to rely on a judgment previously obtained in Singapore and later registered in Malaysia.

Court Says Gambling Debt Cannot Be Enforced

Resorts World based its petition on a 2018 Singapore High Court order that had been registered in Malaysia under the Reciprocal Enforcement of Judgments Act 1958.

According to court materials, the claimed judgment sum, including interest calculated as of Dec 22, 2022, stood at RM25,937,294.58.

The casino company filed the creditor’s petition in 2021 at the Ipoh High Court, where Lee resides.

Lee opposed the application, arguing that the debt was connected to gambling activity and that attempts to recover such liabilities through credit arrangements were not valid under Malaysian law.

He also argued that the alleged debt could not form the basis for bankruptcy proceedings because it was legally void.

Justice Susayan agreed, stating that the origin of the claim was decisive.

In his oral grounds, the judge said a gambling debt was a “debt of honour” which was not legally enforceable.

That phrase has often been used in common law jurisdictions to describe obligations that may carry moral expectations between parties but cannot be compelled through the courts.

Public Policy Overrides Foreign Judgment

A central issue in the dispute was whether a foreign judgment could be enforced when the underlying transaction conflicts with Malaysian law.

Justice Susayan said foreign judgments do not automatically override domestic legal principles. He stated that Malaysian courts must consider local statutes and public policy before recognizing or enforcing overseas rulings.

“This court is not a rubber stamp to enforce a foreign judgment which is contrary to Malaysian public policy,” he said, as reported by Free Malaysia Today.

The judge also referred to Section 26 of the Civil Law Act 1956 together with Sections 24 and 31 of the Contracts Act 1950, which he said render gambling debts null, void and illegal.

The ruling reflects a long-standing distinction in cross-border debt enforcement cases: even where a creditor holds a valid judgment elsewhere, local courts may refuse enforcement if the claim contradicts national law or public policy.

Earlier Federal Court Decision Cited

Justice Susayan said he was bound by a Federal Court ruling delivered earlier last year that held gambling debts are not legally enforceable in Malaysia.

A separate report described the precedent as a 2025 Federal Court decision reaffirming that gambling-related claims cannot be enforced on public policy grounds.

That higher court authority appears to have shaped the Ipoh High Court outcome and limited the room for a different interpretation.

The decision may also be relevant for future disputes involving casino credit extended abroad to Malaysian patrons and later pursued through domestic courts.

Although the petition was dismissed, the judge did not order costs against Resorts World Sentosa.

Lawyers Chan Kok Keong and Leong Cheok Keng acted for Lee Fook Kheun, while Natasha Yau represented the casino company.

The case highlights continuing legal friction between international casino credit systems and jurisdictions that prohibit enforcement of gambling debts. While casinos in gaming hubs may extend credit or obtain judgments abroad, recovery efforts can face major barriers once they reach courts that treat gambling contracts as void.

For Malaysian debtors and foreign gaming operators alike, the Ipoh ruling reinforces that local law remains the controlling factor when enforcement is sought inside Malaysia.