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BUSINESS LAW
(LAW101)
Chapter 2 –Malaysian Legal System 2
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LEARNING OUTCOMES
• What are the differences between civil and criminal law?
• What is arbitration and tribunals?
• What is statutory interpretation?
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Criminal & Civil Law

• Legal rules are generally divided into 2 categories:
• Criminal law
• Civil law
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Criminal Law Civil Law

Concerns Offences against the Disputes between

state private individuals

Purpose of the action To preserve order in the To remedy the wrong

community by punishing which has been
offenders & deterring suffered
others

The parties A prosecutor A plaintiff sues a

prosecutes a defendant defendant
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Criminal Law Civil Law

Standard of proof The prosecutor must prove The plaintiff must establish
his case beyond a his case on the balance of
reasonable doubt probabilities

Decision A defendant may be A defendant may be found

convicted if he is guilty & liable or not liable
acquitted if he is innocent

Sanctions Imprisonment, fine Damages, injunction,

specific performance ,
rescission

Examples Murder, theft, drunken Contract, tort, trusts,

driving, applying a false property law
trade description to goods
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Alternative Methods of Dispute Resolution

(ADR)
• If someone has a legal problem, he can always settle this
dispute by going to the normal courts
• However, there are some problems associated with this
option, namely:
 Expensive
 Delays
 No privacy
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Alternative Methods of Dispute

Resolution (ADR)
• Thus, going to the normal court should be the
last option
• It is better if the problem can be solved by any
of the following ways: -
 Negotiation (thương lượng)
 Mediation/ConcIliation (Hòa giài)
 Tribunal (Hội đồng xét xử)
 Arbitration (trọng tài)
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Negotiation

 Very informal (kh chính thống – k cần cuộc họp,

có thể chỉ cần cuộc gọi, gặp trực tiếp)
 No involvement or assistance of a 3rd party
 The parties resolve the dispute themselves with or

without the aid of a lawyer

 Negotiation is a process in which agreements are

sought by offering and seeking compromise

 Method of give-and-take
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Negotiation

 Cheapest
 Private and confidential
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Mediation/Conciliation
• Mediation/conciliation is a process in which a neutral party informally
brings together the parties to exchange their views in order to reach a
settlement
• Mediation
• The parties try to resolve a dispute with the assistance of a neutral third
party
• The purpose over here is to get the parties to reach a compromise
• The mediator will consult each party and look for common ground
• Conciliation
• Similar to mediation
• But the 3rd party plays a more active role by proposing solutions
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Mediation/Conciliation

 There are institutionalised mediation and

conciliation under various professional bodies
like PAM (Pertubuhan Akitek Malaysia),
Insurance Mediation Bureau and mandatory
conciliation under certain enactments like the
Law Reform (Marriage and Divorce) Act 1976
(s106)
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Mediation/Conciliation
 This neutral person acts as a facilitator
 Cheaper option
 Private
 It is extensively being used in settling industrial,
employment, family and consumer disputes
 In Malaysia, conciliation is used for employment and
trade disputes
 This provided in the Employment Act 1955 and the Trade
Unions Act 1959
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Tribunals
• The work of the ordinary courts is supplemented by a
large number of tribunals set up by Act of Parliament to
hear and decide upon disputes in specialised areas.
• They deal with a wide range of subjects, such as social
security, employment, mental health, agriculture, land,
rents and transport.
• Tribunals are more informal courts which exist outside the
hierarchy of the ordinary courts. They fall into 2 categories
- domestic & statutory.
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Tribunals
• Domestic tribunals are used by many private or
professional associations to resolve disputes and to
exercise control over or to discipline members, e.g. the
General Medical Council for doctors.
• Statutory tribunals are created by statute to deal with
particular types of dispute, e.g.
• Consumer Claim Tribunal
• Industrial Court
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Advantages of Tribunals
• They have specialised personnel - the members of the
tribunal are appointed for their special knowledge in that
particular area of law;
• They are cheaper than the ordinary courts (tòa án thông
thường) because they do not generally use judges from
the ordinary courts who are paid high salaries, the
procedure is less formal & consequently involves fewer
people, legal representation is not necessary (although it
may be desirable) and costs are not awarded;
• They are quicker at resolving disputes. Tribunals are set
up when & where they are needed;
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Advantages of Tribunals
• Because they are more informal, the litigants often feel less inhibited
than they would in an ordinary court;
• The strict rules of evidence can be relaxed, which encourages the
private litigant to present his own case or to be represented, by a
friend or trade union official;
• They reduce the workload of the ordinary courts which are already
overburdened;
• They are subject to the supervision of the ordinary courts & there may
be a right of appeal to such a court;
• They are more private as there is not a general right to access to the
public or press.
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Arbitration
 This is another mechanism for resolving legal disputes
 The parties agree to allow an independent person (arbitrator) to
make a binding decision
 In Malaysia, the Asian International Arbitration Centre (mang tầm
cao hơn xủ lý các vụ việc ở Asian) was established in 1978 to
provide for the arbitration process
 The governing law is Arbitration Act 2005. 
 The Rules for arbitration are based on UNCITRAL Arbitration Rules
of 1976 with certain modification and adaptation as set forth in the
rules for Arbitration of the Asian International Arbitration Centre
 The UNCITRAL Rules have been recommended by the United
Nations General Assembly by its resolution No.XXXI 98 adopted on
the 15 December 1976.
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Arbitration
 Resembles in certain of its characteristics with
litigation
 Differ from litigation in the following ways: -

◦ Not wield judicial authority of the state

◦ Conducted according to rules chosen by the parties:
 Select arbitrator of their choice
 The language to be used
 The place of arbitration
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Arbitration
 An arbitration clause needs to be inserted in the
contract
 If not done, may be done at any time and choose

an existing arbitral forum like the Asian

International Arbitration Centre and its rules
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Arbitration
 Decisions are called awards
 Parties agree that these shall have a binding

effect
 A court can enforce an arbitration award if a

further dispute arises

 Less expensive than going to court – pay only for

the services of an arbitrator

 May have legal representation unless the

agreement says otherwise

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Arbitration
 Less time to settle a dispute compared to a court
hearing
 Dealt with confidentiality
 Formality depends on the choice of the parties

framing their agreement

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Advantages
 Choose arbitrator
 Informal
 Rarely any publicity
 Award may be enforced by court
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Disadvantages
• Public funding is not available
• Appeals are restricted
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Statutory Interpretation
• Acts of Parliament need to be interpreted for 2 main
reasons - ambiguity and uncertainty.
• Ambiguity occurs where various meanings can be
attached to a particular word or phrase, and uncertainty
rises where the words themselves are clear but it is
unclear as to what factual situations they are intended to
apply.
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RULES ON INTERPRETATION
OF STATUTES

LITERAL Ejusdem Generis Rule

GOLDEN
MISCHIEF
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Statutory Interpretation
 The literal rule
 If this approach is applied the judge takes the

ordinary everyday meaning of a word or

phrase which is ambiguous.
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APPROACH TO INTERPRETATION
DEPENDS ON INTENTION

IF LITERAL MEANING IS
CLEAR - NARROW APPROACH

LITERAL APPROACH -
WORDS ARE GIVEN THEIR
EXACT MEANING
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LITERAL RULE: HIGGIN v O'DEA

FACTS: WA POLICE ACT PROVIDED: ANY PERSON WHO KEEPS ANY
ALCOHOL IN THE HOUSE, SHOP, OR ROOM, OR ANY PLACE OF PUBLIC
RESORT SHALL NOT KNOWINGLY PERMIT OR SUFFER PERSONS UNDER
THE AGE OF 16 TO ENTER AND REMAIN THEREIN...

DEFENDANT WAS PROSECUTED AND FOUND GUILTY

COURT RECOGNISED THAT THE LITERAL APPROACH LED TO AN

ABSURD RESULT (NAMELY THAT ANY SHOPKEEPER WHO PERMITTED A
CHILD UNDER 16 TO ENTER THEIR PREMISES WOULD BE LIABLE TO
PROSECUTION) BUT APPLIED THE RULE ANYWAY
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APPROACH TO INTERPRETATION
DEPENDS ON INTENTION

IF LITERAL MEANING IS
GOLDEN APPROACH
CLEAR - NARROW APPROACH

LITERAL APPROACH -
WORDS ARE GIVEN A
WORDS ARE GIVEN THEIR
MODIFIED MEANING
EXACT MEANING

JUSTIFICATION FOR NOT USING

LITERAL APPROACH IS THAT IT
LEADS TO ABSURDITIES
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Statutory Interpretation
• The golden rule
• This is applied where application of the ordinary
everyday meaning of the word would lead to an absurd
result
• The judge departs from the normal meaning of the word
to the extent that it is necessary to give a sensible result
• Alder v George
• The phrase 'in the vicinity' within the Official Secrets Act 1920
was interpreted to include 'in' even though vicinity normally
means only the area surrounding.
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GOLDEN RULE: LEE v KNAPP

FACTS: THE ROAD TRAFFIC ACT 1960 (UK) REQUIRED A DRIVER TO
“STOP” AFTER HAVING BEEN INVOLVED IN AN ACCIDENT.

DEFENDANT ARGUED THAT IT WAS SUFFICIENT THAT HE STOPPED

MOMENTARILY AFTER AN ACCIDENT

STOP

HELD: "STOP" MEANS STOPPING FOR AS LONG AS IS REASONABLE

IN THE CIRCUMSTANCES TO ENABLE THE OTHER DRIVER TO GET
INFORMATION S/HE IS ENTITLED TO UNDER THE ACT.
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APPROACH TO INTERPRETATION DEPENDS ON

INTENTION

IF LITERAL MEANING IS AMBIGUOUS - WIDE APPROACH -

INTENTION IS DETERMINED BY THE PURPOSE OF THE LAW

MISCHIEF: PURPOSE OF THE LAW

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Statutory Interpretation
• The mischief rule
• This is applied where the words of the Act are
ambiguous & uncertain
• The court under this principle ascertains the mischief
which existed before the Act and what interpretation
best gives effect to the cure intended by the Act
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MISCHIEF RULE: SMITH v HUGHES VL-3.47

FACTS: STREET OFFENCES ACT 1959 (UK) PROHIBITED

PROSTITUTES FROM SOLICITING FOR CLIENTS IN "THE
STREET".

ISSUE - WHETHER THE PROHIBITION EXTENDED TO PROSTITUTES

WHO WERE ABLE TO ATTRACT CUSTOMERS FROM BALCONIES OR
WINDOWS?

HELD: LEGISLATION AIMED TO PREVENT PEOPLE ON THE STREETS

FROM BEING SOLICITED BY PROSTITUTES. THEREFORE "THE
STREET" SHOULD BE TAKEN TO INCLUDE BALCONIES AND WINDOWS
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Statutory Interpretation
• The Ejusdem Generis Rule
• If general words follow particular words in a statute, the
judge must confine the meaning of the general word to
the particular class of things created by the particular
words
• Powell v Kempton Park Racecourse
• '….gambling (bài bạc) is prohibited in any room, office or other
place…’ => dấu hiệu sd Ejusdem Generis Rule

• Other place" here mean 'other indoor places'.

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OTHER TECHNIQUES OF INTERPRETATION [L-

1-550]

*EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS - WHERE THERE IS AN

EXPRESS REFERENCE TO ONE MATTER, ALL OTHER MATTERS ARE
EXCLUDED

*GENERALIA SPECIALIBUS NON DEROGANT - IN CASE OF A CONFLICT

BETWEEN GENERAL AND SPECIFIC PROVISIONS, THE SPECIFIC
PROVISIONS WILL PREVAIL

IN THE CASE OF INCONSISTENCY BETWEEN AN EARLIER AND LATER

STATUTE, THE LATTER SHALL BE PREFERRED
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OTHER TECHNIQUES OF INTERPRETATION

NOSCITUR A SOCIIS: WORDS WILL TAKE THEIR MEANING FROM THE

CONTEXT IN WHICH THEY APPEAR

WHERE A STATUTE IS CAPABLE OF AN INTERPRETATION WHICH IS

CONSISTENT WITH INTERNATIONAL TREATIES OR OBLIGATIONS,
THAT INTERPRETATION SHOULD BE PREFERRED
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OTHER TECHNIQUES OF INTERPRETATION

PRESUMPTIONS THAT A STATUTE:

IS NOT INTENDED TO HAVE A RETROSPECTIVE EFFECT

DOES NOT HAVE EXTRA-TERRITORIAL EFFECT

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QUESTIONS