DPB3063 – BUSINESS LAW

Chapter 1: Introduction to Malaysian Legal Principles

By: Pn. Suhana Binti Mohd Jamil

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CLO 1 – recognize appropriately the sources, legal aspects
and conducts of business transactions under the Malaysian
law (C1)

At the end of this chapter, student should be able to:

Describe the nature of Malaysian legal principles

Describe the Malaysian judicial system

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INTRODUCTION TO THE MALAYSIAN LEGAL SYSTEM

1.1 Describe the nature of Malaysian legal principles

i. Define the ii. Function of

Law Law

iii.
iv. Sources of
Classification
Law
of Law
3
 DEFINE THE
1.1.1 Define the law
LAW

FUNCTION OF
LAW
WHAT IS LAW???

CLASSIFICATION
OF LAW

SOURCES OF
LAW IN
MALAYSIA

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 DEFINE THE
1.1.1 Define the law
LAW

FUNCTION OF WHAT IS LAW???

LAW

CLASSIFICATION
OF LAW

To the layman, law is understood

as being a general rule of conduct
SOURCES OF
LAW IN
MALAYSIA

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 DEFINE THE
1.1.1 Define the law
LAW

Enacted = written and gazette

FUNCTION OF Oxford Dictionary
LAW
Customary rules = the trace of
the rules of the community
enforcing the rules can be trace
CLASSIFICATION
from its origin
OF LAW

“the body of enacted or

SOURCES OF customary rules recognized by
LAW IN
MALAYSIA a community as binding”

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 DEFINE THE
1.1.1 Define the law
LAW

Law consists of the rules

FUNCTION OF Sir John Salmond recognized and acted on by
LAW courts of justice

A body of rules which are

CLASSIFICATION enforced by the state
OF LAW
“the body of principles
recognized and applied by the
SOURCES OF state in the administration of
LAW IN
MALAYSIA justice”

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 DEFINE THE
1.1.1 Define the law
LAW

The superior being is the

FUNCTION OF John Austin state and the inferior being
LAW is the individual

The sanctions are wide and

CLASSIFICATION include imprisonment, fines,
OF LAW
“a command set by a superior damages, injunctions and
decrees of specific
being to an inferior being and performance
SOURCES OF enforced by sanctions
LAW IN
MALAYSIA (punishments)”

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 DEFINE THE
1.1.1 Define the law
LAW

Article 160(2) of the Item 43C Sec.2(1) of the

FUNCTION OF
Federal Constitution Interpretation & General
LAW 1957 Clauses Ordinance 1948

CLASSIFICATION
OF LAW a. The written law;
b. Common law in so far as it is in
operation in the Federation or any part
SOURCES OF
LAW IN
thereof;
MALAYSIA
c. Any custom or usage having the force
law in the Federation

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 DEFINE THE
1.1.1 Define the law
LAW

FUNCTION OF
LAW Conclusion

CLASSIFICATION
OF LAW
Law may be defined as body of rules
which are enforced by the state
SOURCES OF
LAW IN
MALAYSIA

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 DEFINE THE
1.1.1 Define the law
LAW

FUNCTION OF
• Malaysia (Peninsular , Sabah & Sarawak) is one political unit
LAW but is not governed by the same set of law.
• There are two important links which unit the two parts of
Malaysia – the Parliament & the Federal Court
CLASSIFICATION
OF LAW
• Legal systems are administered almost entirely on the basis
of the political unit known as “State”
SOURCES OF • Each states has a government and has rules which lay down
LAW IN
MALAYSIA
who shall govern and how.
• Malaysia has a written constitution called the Federal
Constitution as the supreme law.
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 DEFINE THE
1.1.1 Define the law
LAW

FUNCTION OF
LAW
• The Federal Constitution provides that Parliament may make
laws with respect to any of the matters enumerated in in the
CLASSIFICATION Federal List.
OF LAW
• The matters may also be the subject-matter of laws made by
the state legislatures.
SOURCES OF
LAW IN • Article 75 provides that if any state law is inconsistent with a
MALAYSIA Federal Law, Federal Law shall prevail

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 1.1.2 Recognize the function of law
DEFINE THE
LAW
to encourage the doing of what is
Maintain justice in society right or just in a particular set of
FUNCTION OF
LAW
circumstance

CLASSIFICATION
OF LAW Govern the conduct of all
members of society
SOURCES OF
LAW IN Guides individuals in ascertaining
MALAYSIA the soundness of rules, and their
impact upon relationships

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 1.1.3 Distinguish the classification/types of law
DEFINE THE
LAW

Public
Law
FUNCTION OF
LAW

CLASSIFICATION
OF LAW Private
Law
SOURCES OF
LAW IN International
Law
MALAYSIA

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 1.1.3 Distinguish the classification/types of law
DEFINE THE
LAW
Law

FUNCTION OF
LAW
International
Public Law Private Law
Law

CLASSIFICATION
OF LAW
Constitutional Law Contract Law Public Law

SOURCES OF
Criminal Law Tort Law Private Law
LAW IN
MALAYSIA

Trust Law

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 1.1.3 Distinguish the classification/types of law
DEFINE THE
LAW
Public Law

Governs the relationship between individuals and the state

FUNCTION OF
LAW
Constitutional Law Criminal Law
 Lays down the rights of  Codifies the various offences
CLASSIFICATION
OF LAW individuals in state. committed by individuals as
against the state
 It deals with questions such
SOURCES OF as supremacy of Parliament  A crime is a wrong against
LAW IN and rights of citizens the state which punishment is
MALAYSIA
inflicted by the state
 The proceedings being
brought by the Public
Prosecutor 16
 1.1.3 Distinguish the classification/types of law
DEFINE THE
LAW
Private Law (Civil Law)
Concerned with matters that affect the rights & duties of individuals
FUNCTION OF
LAW
amongst themselves

Contract Law Tort Law Trust Law

CLASSIFICATION  Based on  Based on  A trust is an
OF LAW
agreement. obligation imposed equitable binding a
by law person (trustee) for
 Determines when a the deal with
SOURCES OF
LAW IN
promise or set of  A tort is the breach property over which
MALAYSIA promises is legally of a general duty he has control
enforceable which is imposed (trust property) for
by the law, & not the benefit of
agreed between persons
the parties (beneficiaries17)
 1.1.3 Distinguish the classification/types of law
DEFINE THE
LAW
International Law
Body of law which is composed for its greater part of the principles &
FUNCTION OF
LAW
rules of conduct which states feel themselves bound to observe

Public Law Private Law

CLASSIFICATION  Deals with  Concerned with the
OF LAW
relationship application of various
between states national laws of the facts of
SOURCES OF  E.g. border, a particular case involving 2
LAW IN territorial waters or more countries.
MALAYSIA
etc.  Applicable to a marriage
between 2 different
nationals in a 3rd country

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 1.1.4 Indicate sources of law
DEFINE THE
LAW
Source of Malaysian Law
The legal sources, i.e. the legal rules that make up the law in
FUNCTION OF
LAW
Malaysia

Written Law Unwritten Law Islamic Law

1. Federal 1. English 1. Al-Quran
CLASSIFICATION
OF LAW
Constitution common law & 2. Hadiths
2. State equity
Constitution 2. Judicial
3. Legislation decision
SOURCES OF
LAW IN
4. Subsidiary 3. Customary law
MALAYSIA Legislation

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 1.1.4 Indicate sources of law
DEFINE THE
LAW
Written Law
Also referred to as statute law. The courts are guided by:
FUNCTION OF
LAW
Interpretation Acts, Extrinsic material, Common law, & Precedent

Federal Legislation / State Subsidiary

Constitution Parliamentary Constitutions • Order,
CLASSIFICATION
• Highest law in • Laws enacted • State law regulation,
OF LAW
Malaysia by governing notification,
• Lays down Parliament laws in the by-law,
power of • These laws particular proclamation
SOURCES OF Federal & State are subjected state that have
LAW IN Government, to the • E.g: state legislative
MALAYSIA
rights of Federal employees, effect
Malaysian Constitution financial
citizens etc. provisions 20
 1.1.4 Indicate sources of law
DEFINE THE
LAW
Unwritten Law
Unwritten rules, principles, and norms that have the effect and force of
FUNCTION OF law though they have not been formally enacted by the government.
LAW

English Common Law Judicial Decisions Customs

• Do not originate • Doctrine of Binding • Also known as Adat
CLASSIFICATION
OF LAW
from Malaysian Law Precedent. Law, example Adat
• Application of • Decisions of Perpatih & Adat
English Law is superior courts Temenggung
specified in the binding on inferior • Relates to family
SOURCES OF
LAW IN
statutes & only courts. law, native
MALAYSIA apply when there is • Inferior courts must customary laws
no specific law follow the law made (land)
applicable to it by higher court.
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 1.1.4 Indicate sources of law
DEFINE THE
LAW
Islamic/Syariah Law

FUNCTION OF • Federal constitution provides that states have the power to

LAW
administer Islamic Law.
• The courts which enforce Islamic law in the country are the Syariah
Courts.
CLASSIFICATION • Islamic law applies to Muslims only and does not apply to non-
OF LAW
Muslims.
• In business, particularly in the areas of banking and finance, Islamic
principles are increasingly relevant in lending and investments.
SOURCES OF • The head of the Muslim religion in a state is the Sultan.
LAW IN
MALAYSIA • But for Penang, Malacca, Sabah, Sarawak & Federal Territories is
the Yang di-Pertuan Negeri.

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 1.2 Describe the Malaysian Judicial System
SEPARATION
OF POWERS
Judicial System In
Malaysia
HIERARCHY OF
COURTS
 The roles of the courts is more concerned with administration of the
law.
 The courts have both criminal and civil jurisdiction.
ROLES OF
JUDGES
 The head of the judiciary is the Chief Justice.
 The federal constitution provides that power is exercised by the
legislative, executive and the judiciary.
JURISDICTION
OF EACH COURT

Jurisdiction = cases or matters

that a court can hear, and is
established by statute
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 1.2 Describe the Malaysian Judicial System
SEPARATION
OF POWERS
Judicial System In
Malaysia
HIERARCHY OF
COURTS

 The jurisdiction and powers of the courts, as well as the doctrine of

ROLES OF
separation of powers that exists between the legislative, the
JUDGES executive and the judiciary were well pronounced by the Federal
Court.

JURISDICTION
OF EACH COURT

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 1.2.1 Describe the Malaysian Judicial System
SEPARATION
OF POWERS
Doctrine Separation of Powers - Article 127 of the Federal Constitution

Legislative /
Executive Judiciary
Parliament
HIERARCHY OF
COURTS
Is the national legislature • To formulate national Judiciary of Malaysia is
of Malaysia, based on economic policies heavily influenced by the
the Westminster system. and development English common law and
ROLES OF The parliament consists programs. to a lesser extent Islamic
JUDGES of: • To set the budget and law.
• Dewan Rakyat (House finance of the The judicial power is
of Representatives) country. vested in
JURISDICTION
• Dewan • As an arena for • Federal Court
OF EACH COURT Negara (Senate). suggestions, debates, • Court of Appeal
• Yang di-Pertuan and criticisms. • High Courts
Agong (King) as the • To propose and • Subordinate Courts
Head of State amend the law.
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SEPARATION OF
1.2 Hierarchy of Courts
POWERS

Federal Court

Court of Appeal
HIERARCHY OF
COURTS
High Court High Court
(Malaya) (Sabah & Sarawak)

ROLES OF Syariah Court

JUDGES Syariah Court
Native Court

JURISDICTION Sessions Court Sessions Court

OF EACH COURT

Court for Magistrates’ Magistrates’ Court for

Children Court Court Children
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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

 The courts structure is divided into Superior Courts & Subordinate

Courts
HIERARCHY OF
COURTS

Superior Courts Subordinate Courts

1. Federal Court 1. Native Court
ROLES OF 2. Court of Appeal 2. Sessions Court
JUDGES
3. High Court 3. Magistrates’ Court
4. Syariah Court 4. Juvenile Court
JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Federal Court

HIERARCHY OF  Is the highest court in Malaysia.

COURTS  Consist of the Chief Justice, the President of the Court of Appeal,
the Chief Judge of Malaya and Chief Judge of Sabah & Sarawak,
and 7 Federal Courts judges
 Has jurisdiction in matters including the following:
ROLES OF
JUDGES
 To hear criminal appeals from the Court of Appeal
 To determine constitutional questions which have arisen in the
proceedings of the High Court but referred to the Federal Court
for decision
JURISDICTION
OF EACH COURT  It can hear disputes on any matter between any state or state
legislation as being excess of powers
 To give its opinion on any question referred to it by the YDPA
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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Court of Appeal

HIERARCHY OF
COURTS  Constitutes the President of the Court of Appeal and 15 Court of
Appeal Judges.
 Has jurisdiction to hear all civil and criminal appeal against decisions
of High Court.
ROLES OF
JUDGES  Has jurisdiction to hear and determine civil appeals generally for
cases where the amount or value of the subject-matter of the claim is
at least RM250,000.
JURISDICTION  Where an appeal has been heard & disposed of by the Court of
OF EACH COURT
Appeal, the Court of Appeal has no power to review the case.

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS
High Court
 Consists of 2 Chief Judges – 1 in Peninsular Malaysia & 1 in Sabah and
HIERARCHY OF Sarawak
COURTS
 The jurisdiction of the High Court is original, appellate & advisory.
 It has unlimited criminal & civil powers. Any civil matter which cannot be
determined in the subordinate courts is heard before the High Court.
ROLES OF  Also possesses the power to refer any points of law arising in the appeal for
JUDGES
the decision of the Court of Appeal.
 The High Court has the jurisdiction to try all proceedings where:
1. The cause of action arose within Malaysia, or
JURISDICTION
OF EACH COURT 2. The defendant(s) resides or has his place of business within Malaysia,
or
3. Bankruptcy, administrative of the estates of deceased person etc.
4. Any land the ownership of which is disputed is situated within Malaysia
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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Syariah Court

HIERARCHY OF  Deals with exclusively Islamic laws, having jurisdiction upon every
COURTS
Muslim in Malaysia.
 The Syariah Courts have jurisdiction only over Muslim in the matters
of family law and religious observances, and can generally only pass
ROLES OF sentences of not more than 3 years imprisonment, a fine of up to
JUDGES RM5,000, and/or up to 6 strokes of the cane.

JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Native Court

HIERARCHY OF
COURTS
 The Native Court is peculiar only to Sabah & Sarawak. It exercises
jurisdiction over matters affecting ‘native customs’ where the
parties are natives.
 Sarawak - Ibans, Bidayuhs, Penans, Kayans etc.
ROLES OF
JUDGES  Sabah - Kadazans, Dusuns
 Deals with matters:
 Cases arising from breach of native law or custom (religious,
JURISDICTION matrimonial etc.)
OF EACH COURT
 Cases involving land where there is no title
 Civil cases where the subject-matter does not exceed RM50
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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Sessions Court

HIERARCHY OF
COURTS  The highest of the subordinates courts. It is under the charge of the
Sessions Court Judge.
 Its criminal jurisdiction extends to all offences other than offences
punishable with death.
ROLES OF
JUDGES  Has jurisdiction of civil matters where the amount dispute or value of
the subject-matter does not exceed RM1,000,000
 Matters relating to land, specific performance or recession of
JURISDICTION
OF EACH COURT
contracts, injunction, probate and administration of estate, divorce,
bankruptcy, trusts, and accounts are excluded from its jurisdiction.

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Magistrates’ Court

HIERARCHY OF
COURTS  Deals with minor civil and criminal cases. The court is presided over
by a magistrate. Magistrates are divided – 1st class & 2nd class.

 A 1st class magistrate possesses jurisdiction to all which the maximum

ROLES OF term of punishment does not exceed 10 years imprisonment, or all
JUDGES
offences punishable with fine not exceeding RM100,000

 A 2nd class magistrate has jurisdiction to offences for which the

JURISDICTION maximum term of imprisonment does not exceed 12 months
OF EACH COURT
imprisonment or offences punishable with fine not exceeding
RM10,000

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Court for Children

 Previously known as the Juvenile Court.

HIERARCHY OF
COURTS  Hears cases involving minor except cases carrying the death
penalty, which are heard in High Court.
 A child is defined as any person below the age of 18
ROLES OF  Cases for children are governed by the Child Act 2001.
JUDGES

JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.2 Hierarchy of Courts
POWERS

Penghulu’s Court

 The lowest level of subordinate courts in Peninsular Malaysia. It is

HIERARCHY OF
COURTS
presided over by a Penghulu for a mukim.
 The Penghulu is empowered to hear and determine original
proceedings of a civil in which the plaintiff seeks to recover a debt
or liquidated demand in money not exceeding RM50.
ROLES OF
JUDGES  All parties to the proceedings are person of an Asian race speaking
& understanding the Malay language.

JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.3 Roles of judges
POWERS

 The Malaysian Judiciary is headed by the Chief Justice.

HIERARCHY OF
COURTS  The appointment of the Chief Justice is governed by Article 122B of
the Constitution of Malaysia whereby the Yang di-Pertuan Agong
(King) appoints the Chief Justice on the advice of the Prime
Minister of Malaysia after consulting the Conference of Rulers.
ROLES OF
JUDGES  As for the appointment of the President of the Court of Appeal, the
Chief Judge of Malaya, the Chief Judge of Sabah and Sarawak, and
other Federal Court judges, similar procedure is taken with the
additional requirement of consultation with the Chief Justice.
JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.3 Roles of judges
POWERS

HIERARCHY OF
 The appointment of Sessions Court judges is governed by Section
COURTS 59 of the Subordinate Court Act 1948. They are appointed by the
Yang di-Pertuan Agong upon the advice of the respective Chief
Judges.
ROLES OF  Section 78 of the Subordinate Courts Act 1948 provides that the
JUDGES appointment of magistrates are done by the respective state
government upon the advice of the respective Chief Judges, except
for magistrates in the Federal Territory, where thy are appointed by
the Yang di-Pertuan Agong upon the advice of the Chief Judge.
JURISDICTION
OF EACH COURT

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SEPARATION OF
1.2.3 Roles of judges
POWERS

HIERARCHY OF  Judges interpret the law, assess the evidence presented, and
COURTS control how hearings and trials unfold in their courtrooms.
 Most important of all, judges are impartial decision-makers in
the pursuit of justice. Legal cases are contests between
ROLES OF
JUDGES
opposing sides, which ensures that evidence and legal
arguments will be fully and forcefully presented.
 The judge, however, remains above the fray, providing an
independent and impartial assessment of the facts and how
JURISDICTION
OF EACH COURT
the law applies to those facts.

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Q & A SESSION

The end…

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