BUSINESS LAW (LAW 416)

TOPIC 1:
MALAYSIAN LEGAL SYSTEM

PART 1. Sources of law in Malaysia

FOCUS MORE ON: Legislation and Subsidiary Legislation
PART 2. The administration of justice/
Courts System in Malaysia
PART 1 SOURCES OF LAW
IN MALAYSIA
What is legal system?
• There are various definitions of the term "legal
system"
• Definition: a system for interpreting and enforcing
the laws.
• Definition: the set of laws of a particular country
and the way that they are used
• The Malaysian legal system can be classified into
two categories which is the “Written” and
“Unwritten law”.
Malaysian Written Law
(Sources of Malaysian Law)
On the other hand, “Written law” refers to the laws
contained in the Federal and State Constitutions and in a
code or a statute. The written laws are much influenced
by English laws as the Malaysian legal system retains
many characteristics of the English legal system..

The “Written law” includes the :

•Federal Constitutions

•State Constitutions

•Legislation and

•Subsidiary Legislation.
Written law:
1. FEDERAL CONSTITUTIONS
• Federal Constitution is the supreme law of the
country.
• It protects the basic or fundamental rights of the
individual.
• These rights can only be changed by a two-thirds
majority of the total number of members of the
legislature.
• Any general law which is inconsistent with the
Federal Constitution is void.
Written Law:
2. STATE CONSTITUTIONS
 State Constitution regulates the government of that
State.
 Each state in Malaysia possesses its own
constitution.
 The State Constitution contains provisions which
are enumerated in the Eighth Schedule to the
Federal Constitution.
Written Law:
3. LEGISLATION
 Refers to law enacted by a body constituted for this
purpose.
 Laws are enacted by Parliament at the federal level
and by the various State Legislative Assemblies at
State level.
Continue…

An Act- refers to law enacted by Parliament at the Federal

Level of Malaysia. However laws enacted by Parliament between
1 April 1946 and 10 September 1959 are known as Ordinances.

An Enactment- refers to law enacted by State Legislative

Assemblies. However, laws enacted by the State Legislative
Assembly of Sarawak are known as Ordinances.

An Ordinance- refers to laws promulgated (diisytiharkan)by

the Yang di-Pertuan Agong during an emergency. (Darurat) A
proclamation of emergency is made by the Yang di-Pertuan
Agong when emergency exists whereby security, economic life,
public order in the Federation or any part thereof is threatened
and there is an imminent danger.
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS

6 Ways on how a bill becomes a law (An Act)

FIRST READING

SECOND READING

A COMMITTEE OF HOUSE

THIRD READING

OTHER HOUSE(SENATE)

ROYAL ASSENT
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS

 FIRST STAGE – First Reading

FIRST STAGE
First Reading
(House of Representative/Dewan Rakyat)

Bill is introduced in one of the two

houses either House of Representatives
or the Senat. Only its title is actually
read. After the bill is passed at this
stage, its text is printed and distributed.
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS

 SECOND STAGE- Second Reading

SECOND STAGE
Second Reading
(House of Representative/Dewan Rakyat)
Members debate the bill. If accepted, it is
passed on for consideration by a committee of
the house. A committee in the house considers
the bill in detail and may amend any part of it.
The committee then submits a report on the bill
to the house. If the report is approved, the bill
goes on to a third reading in the house.
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS
 A Committee of House
THIRD STAGE
A Committee of House
(Peringkat Jawatankuasa Dewan)
Considers the Bill in detail and may amend any part of it.
When discussion is completed in Committee, the Minister
move a motion to report the bill under consideration to
the House. If the motion is accepted, the House will
resume sitting and this brings the Committee Stage to an
end.
If the report is approved, the Bill goes on to a third
reading in the house.
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS

 THIRD STAGE- Third Reading

FOURTH STAGE
Third Reading
Debate takes place and amendments may
be put to a note. The house then either
passes or defeats the bill
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS

 FOURTH STAGE- Other House

FIFTH STAGE
Other House (Senate/Dewan
Negara)
When a Bill has passes one house, it is
sent to the other house where it follows a
similar pattern. If the second house
amends the bill, the bill must be returned
to the first house for its approval.
THE LEGISLATIVE PROCESS/
LAW MAKING PROCESS
 FIFTH STAGE/FINAL STAGE- Royal Assent

SIXTH STAGE/FINAL STAGE

Royal Assent
When the Bill has passed both houses in
accordance with Article 68, it is sent to
the Yang di-Pertuan Agong for the
Royal Assent. The bill becomes a law
upon publication.
Written Law:
4. SUBSIDIARY LEGISLATION
• Subsidiary legislation refers to rules and
regulations enacted by an authority which has been
conferred power by the statute.
• It deals with the detail that is being left behind by
the legislature.
• This is due to the fact that legislation is insufficient
to provide for everyday matters.
• Example of subsidiary legislation is parking laws
enacted by local councils.
CONTROL OF SUBSIDARY
LEGISLATION

 There are four types of control:

1. Consultation
2. Publicity
3. Parliamentary Control
4. Judicial Review
CONTROL OF SUBSIDARY
LEGISLATION
 1. Consultation- Before regulations are made, the
authority (for example Minister) will consult other
organized interest groups or advisory bodies.
 2. Publicity- It will come in force on the date of
publication. If subsidiary legislation is not gazetted,
it is invalid.
CONTROL OF SUBSIDARY
LEGISLATION
 3. Parliamentary Control- The legislative body
exercise control over the subsidiary legislation.
 4. Judicial Review- The Court has a control over a
subsidiary legislation. The Court can declare a
subsidiary legislation as void if the subsidiary
legislation conflicts with the Federal Constitution.
Malaysian Unwritten Law
(Sources of Malaysian Law)
• The “Unwritten law” does not mean that the law is
literally unwritten. It refers to the laws which are not
enacted by the Legislature and which are not found in
the Federal and State constitutions. This category of
law comes from cases decided by the Courts and the
local customs, which is otherwise known as “common
law”.
The “unwritten law” mainly comprised of the :
• English law,

• Judicial decisions and

• Custom law.

• Islamic/Shariah law
Unwritten Law
1. ENGLISH LAW
• Due to colonialism, English law forms part of the
laws of Malaysia.
• English law can be found in the English common
law and rules of equity.
• According to Section 3 (1) Civil Law Act 1956, the
courts in peninsular Malaysia shall apply the
common law of England and rules of equity as
administered in England on 7TH day of April 1956.
Continue…
• In Sabah and Sarawak, the courts shall apply the
common law of England and the rules of equity,
together with the statutes of general application as
administered or in force in England on the 1 ST day
of December 1951 and the 12TH day of December
1949 respectively.
• According to Section 3(2) Civil Law Act 1956, in
the event of conflict between the common law and
the rules of equity with reference to the same
matter, the rules of equity prevail.
Unwritten Law
2. JUDICIAL DECISION (Dahuluan Kehakiman)
• Decision made by the judge is part of the Malaysian
law.
• When judge made decision, they follow certain
accepted principles commonly known as precedents.
• Precedents are decision made by judges previously in
similar situations.
• Judicial precedents are based on the hierarchy of
courts.
• It is based on the principles that the decision of the
higher courts binds the lower courts and some courts
are bound by their own decision.
Continue…
 It is a process whereby judges made decision.
 The decisions are later binding for the future.
 A decision of superior courts for example the
Supreme Court (Federal Court) binds the lower
courts for example the High Court, Sessions Court
and Magistrate’s Court.
 This process created law in Malaysia.
Continue…
 Judges can make law in two ways:
 1) By applying an established rule or principle to a
new situations or a set of facts.
 2) Interpreting statutes enacted by the legislature.
Unwritten Law
3. CUSTOM
 Customs relates to customs of different races.
 Eg: Adat applies to Malay. Hindu and Chinese
customary law applies to Hindu and Chinese
respectively.
 Example of customary law in Malaysia are adat
Pepatih and adat Temenggong.
Unwritten Law
4. ISLAMIC/SHARIAH LAW
• Applies to Muslims only and does not apply to non
Muslim.
• Federal Constitution provides that states have the
power to administer Islamic law.
• Head of the Muslim religion in a state is the Sultan.
However in Penang, Malacca, Sabah and Sarawak
and Federal Territories the head of the Muslim
religion is the Yang di-Pertuan Agong.
• The courts which enforce Islamic law in the
country are the Syariah Courts.
 SOURCES OF MALAYSIAN
LAW
WRITTEN LAW UNWRITTEN LAW
1.Federal Constitution 1.English Law
2.State Constitution 2.Judicial Decision
3.Legislation 3.Customs
4.Subsidiary 4.Islamic Law
Legislation
PART 2
THE ADMINISTRATION OF
JUSTICE
(Courts systems in Malaysia)
Administration of Justice/
Courts Systems in Malaysia

 In Malaysia, when there is dispute between parties,

it can be settled by bringing the case to the courts.
 Courts are divided into two categories:
1. Superior Courts
2. Subordinate Courts
 HIERARCHY OF THE COURTS

FEDERAL COURT
Superior Courts

COURT OF APPEAL

HIGH COURT HIGH COURT

(West Malaysia) (Sabah&Sarawak)

SESSIONS COURTS

Subordinate
MAGISTRATE’S COURTS Court

PENGHULU’S COURTS
(In West Malaysia Only)
SUPERIOR COURT
Federal Court
 Federal Court is the highest court in Malaysia.
 The Federal Court is established under Article
121(2) of the Federal Constitution.
 Federal Court consist of:
 1. Chief Justice (President of the court)
 2. President of the Court of Appeal
 3. Two Chief Judge of High Court
 4. Four other Federal Court Judges
Jurisdiction of Federal Court
 A)Original jurisdiction
 B) Appellate jurisdiction
 C) Reference jurisdiction
 D) Advisory jurisdiction
Jurisdiction of Federal Court
1. Original Jurisdiction – Provided under Article
128(1) Federal Constitution. Determine the
disputes on any other question between states or
between the Federation and any states
2. Appellate Jurisdiction- Provided under Article
128(3) Federal Constitution. Determine appeals
from the Court of Appeal.
Jurisdiction of Federal Court
3. Reference Jurisdiction- Provided under Article
128(2) Federal Constitution. As reference regarding
Constitutional matter.
4. Advisory Jurisdiction – Provided under Article
130 Federal Constitution. The Yang Di Pertuan
Agong may refer to the Federal Court for its opinion .
SUPERIOR COURT
Court of Appeal
 The Court of Appeal is established by Article
121(1B) of the Federal Constitution.
 Jurisdiction of Court of Appeal- The Court can
hear both Civil and Criminal appeal cases
Jurisdiction of Court of Appeal
CIVIL APPEAL CASES CRIMINAL APPEAL
CASES
Has jurisdiction to hear Has jurisdiction to hear
and determine civil and determine any
appeals for cases where appeal against the
the amount or value of decision of the High
the subject matter of Court
the claim is more than
RM 250 000
SUPERIOR COURT
High Courts
 Established under Article 121(1) of the Federal
Constitution.
 There are 2 high courts in Malaysia:
1. High Court for West Malaysia
2. High Court for Sabah & Sarawak
 High Court is presided by a Chief Judge.
 The jurisdiction of the High Court is original,
appellate and supervisory.
SUBORDINATE COURTS
Session Courts
 Sessions Court has the authority to try civil and
criminal cases.
CIVIL CASES CRIMINAL CASES

All suit where the All offences other

amount in dispute than offences
or the subject punishable with
matter does not death
exceed RM 250
000
And more if parties
mutually consent.
SUBORDINATE COURTS
Magistrate’s Courts

 Deals with minor civil and criminal cases.

 There are two classes of Magistrate Court
 A) First class Magistrate Court
 B) Second class Magistrate Court
Magistrate Court
FIRST CLASS SECOND CLASS
CRIMINAL CASES CRIMINAL CASES
To try all offences punishable Only to deal with cases where
with up to 10 years the maximum punishment
imprisonment or with fine only imposed is no more than 12
and offences related to months imprisonment or which
punishable for robbery and is punishable with a fine only.
house breaking.
CIVIL CASES No jurisdiction for civil cases
To try all litigations where the
matter in dispute or subject
matter does not exceed
RM 25 000
SUBORDINATE COURTS
Penghulu’s Courts
 The court ranks at the lowest level.
 It is presided by a Penghulu appointed by the State
Government.
 It exists only in the states of Peninsular Malaysia.
 Currently remains only in the statute book because it
is hardly ever used.
 Jurisdiction: Penghulu is empowered to try civil
disputes where the subject matter does not exceed
RM 50 in value and in criminal cases to imposed a
fine not exceeding RM 25.
SAMPLE FINAL QUESTION
 The sources of Malaysian Law refer to the legal
rules that make up the law in Malaysia. They
consist of written law as well as unwritten law.
Briefly discuss the sources of law in Malaysian
today. (25Marks)
SAMPLE FINAL QUESTION
 Explain the written sources of law under the
Malaysian Legal System (25 Marks)
SAMPLE FINAL QUESTION
 Parliament of Malaysia is vested with the powers to
legislate law. Explain the procedure of the law
making process before any law is passed by
Parliament. (25Marks)
SAMPLE FINAL QUESTION
 Describe the hierarchy of courts in Malaysia and
explain the jurisdiction of the subordinate courts.
(25Marks)
SAMPLE FINAL QUESTION
 English Common Law and the Rules of Equity
form part of the laws of Malaysia. Discuss the
extent of the application of English Law as applied
in Malaysia. (25 Marks)
SAMPLE FINAL QUESTION
 Sources of law can be divided into 2: Written and
Unwritten law. Discuss the sources of unwritten
law. (25Marks)
SAMPLE FINAL QUESTION
 Describe the hierarchy of courts and explain the
jurisdiction of the Superior Courts in Malaysia.
SAMPLE FINAL QUESTION
 Parliament of Malaysia is vested with the power to
make law. Explain the procedures of law making
before a bill is passed by Parliament.
SAMPLE FINAL QUESTION
 Judicial precedent form part of the sources of
Malaysian law. Explain how the system of judicial
precedent works in Malaysia. (15Marks)
 Describe the hierarchy of courts in Malaysia and
explain the jurisdiction of Federal Court.
(10Marks)
SAMPLE FINAL QUESTION
 Discuss what is meant by delegated legislation as
one of the sources of law and the types of control
that exist to prevent abuse of power by the
delegated bodies.