The national Davis Cup team finished fourth in the Asia/Oceania Group III after going down 2-1 to Vietnam in Colombo on Sunday.
Their successive defeat to Vietnam since the 2009 Laos Sea Games does not augur well ahead of the upcoming 2011 edition in Indonesia.
Sri Lanka defeated Lebanon 3-0 to lift the title.
Result - Vietnam 2 Malaysia 1 (Le Quoc-Khanh lost to Si Yew Ming 3-6, 3-6; Tran Thanh-Hoang bt Ariez Elyaas Deen Heshaam 2-6, 6-3, 6-0; Do Minh Quan-Ngo Quang Huy bt Ahmad Deedat Abdul Razak-Nazim Khan 6-0, 7-6 (7-4).