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Malaysia.pptx
Global Legal Systems
Malaysia
Introduction
01
Overview of the Modern Legal System of Malaysia
With components of both Islamic and civil law, Malaysia is governed by two separate legal systems.
The Federal Constitution, which outlines the respective authorities of the federal and state governments, forms the cornerstone of Malaysian law.
The Federal Court is at the top of the legal system, followed by the High Court and the Court of Appeal.
Malaysia's dual legal system, encompassing civil and Sharia (Islamic) laws, is one of its unique features.
Based on the English legal system, civil law handles cases involving contracts, torts, and business transactions.
For Muslims, personal and family concerns are governed by the Sharia legal system.
The Basis of the Legal System
The law in Malaysia blends civil law principles with the common law. The legal system takes its cues from Roman-Dutch civil law, which has in turn been influenced by written laws and statutes.
Malaysia's unique legal framework achieved through integrating customary, secular and other different religious laws.
Many people in Malaysia do practice Islam as their religion and this is guided by robust Islamic principles.
Important pillars of Malaysian society such as family law, immigration and criminal offenses. Often, there is concurrence when it comes to implementing Malaysia’s dual legal system structure.
In this scenario, two court arrangements that is religious laws and secular cases are undertaken. It is important to note that these two have autonomous authority.
Importantly, religious laws are more superior and therefore it has jurisdiction over issues such as family cases that involve Muslims. A good example of this is that of child custody and divorce.
Integrated approach does allow for contract interpretation and enforcement through adaptability.
To guarantee that there is a balance between principles and customary ideals, then different opinions are involved.
History of the Development of the Legal System in Malaysia
18th - 20th century
Malaysia's legal system has been tremendously influenced by British colonial control, which began in the 18th century and continued into the 20th.
1807
1957
By confirming the authority of English law throughout the British colonies, especially the Straits Settlements, which included areas that are now part of Malaysia, the Charter of Justice 1807 cemented the acceptance of English common law.
The Federal Constitution of Malaysia, which was ratified in 1957 and subsequently modified to accommodate the accession of new states, emerged as the ultimate legal framework in the nation.
Court System & Cultural Impact
02
Malaysian Court Hierarchy – Subordinate Courts
Court of First Instance
Magistrates Court: Handles less severe offenses and civil matters, and small claims procedures
First Class Magistrate: Listen to claims amounting up to RM100,000
Second Class Magistrate: Listen to claims amounting up to RM10,000
Sessions Court: Handles serious offenses and higher monetary claims that do not exceed RM1,000,000
With unlimited jurisdiction for cases involving motor-vehicle accidents
Malaysian Court Hierarchy – Superior Courts
Court of First Instance / Appellate Court
High Court: Original jurisdiction over serious offenses and major civil cases, with no limit to the value of claims. The jurisdiction is split between:
High Court of Malaya: Peninsula Malaysia
High Court of Sabah and Sarawak: East Malaysia
Pure Appellate Court
Court of Appeal: Every case is heard and disposed of by at least threeJudges. Final jurisdiction for cases which began in any subordinate court.
Federal Court: Highest Court in Malaysia with final appellate jurisdiction.
Special Court: Hears cases of offences or wrongdoing made by a ruler (King, Head of States)
Key Court Procedure in Malaysia
Writ of Summons
Initiates civil lawsuit
Specifies plaintiff's claims
Service of Writ
Defendant served within specified time
Appearance and Defence
Defendant responds with appearance and defence
Statement of Claim and Defence
Plaintiff files statement of claim
Defendant responds with statement of defence
Amendment of Pleadings
Court permission to amend pleadings
Discovery of Documents
Exchange of relevant documents
Interrogatories
Written questions seeking specific information
Trial
Presentation of evidence and legal arguments
Judgment / Appeal
Court issues decision based on evidence
Dissatisfied parties may appeal
Cultural Influences in Malaysia Legal System
Islamic Law (Syariah Law):
Malaysia has a dual legal system, where Islamic law coexists with civil law.
Islamic law is applied to Muslims in matters related to family law, religious offenses, and certain civil matters.
Customary and Indigenous Laws:
Indigenous communities in Malaysia often follow customary laws that are specific to their cultural traditions
Influence legal processes, especially in matters related to land and community affairs.
Constitution business law & Key pieces of legislation
03
Constitution and business law
The Constitution is the supreme law of Malaysia
Constitutional Equality and Non-Discrimination and the Judicial System are related to commercial activities.
In Article 8, except as expressly authorized by the Constitution, citizens shall not be discriminated against solely in the administration of any law relating to the acquisition, holding or disposition of property or the establishment or conduct of any trade, business, profession, occupation or employment.
Article 13. Rights to property. (1) No person shall be deprived of property save in accordance with law. (2) No law shall provide for the compulsory acquisition or use of property without adequate compensation.
Key pieces of legislation
Employment Act 1955,
Income Tax Act 1967,
Industrial Relations Act 1967, Customs Act 1967,
Personal Data Protection Act 2010
COMPETITION ACT 2010:
fair competition, confidentiality, litigation
Foreign Investment Committee:
FIC approves commercial operations
Companies Act 2016:
registration, regulation and dissolution
Contracts &
Intellectual property
04
Contract Laws in Malaysia
Common Law Influence
Malaysian contract law is influenced by Common Law, the foundation framework.
Contracts Act 1950
Primary legislation governing contracts in Malaysia
Valid Contract
An offer, Acceptance, Intention to create legal relations, and Consideration
Contract Laws in Malaysia
Consumer Protection
Consumer Protection Act 1999 for contractual dealings
Breach of Contract
Common remedies include damages, specific performance (carrying out the contract as agreed), and rescission
Influence of
Islamic Law
Influence business practices and contracts. e.g. Islamic banking and finance
Intellectual Property
Legal Framework: Copyright Act 1987, Patents Act 1983, Trademarks Act 2019, and Industrial Designs Act 1996
Copyright: Including literary, artistic, and musical compositions, as well as films
Trademark Registration and Protection: The Trademarks Act 2019 protect company with trademark registration, last for 10 years
Intellectual Property
Patent Protection: Protect innovators like high tech. 20-years protection
MyIPO: The national agency responsible for IP matters
Membership in International IP Treaties: Part of international IP treaties like WIPO, the Paris Convention, the Berne Convention, and TRIPS agreement
McDonald vs. McCurry
Issue: Trademark infringement (Mc!)
McDonald's argued McCurry's name violated its Intellectual Property rights
01
02
03
Time: 2001-2009.
The eight-year legal dispute
“The lawyer for McCurry, said the ruling means McDonald’s does not have a monopoly on the prefix “Mc”, and that other restaurants could also use it as long as they distinguish their food from McDonald’s”
McDonald’s loses McCurry battle
(Federal Court of Malaysia)
Employment Laws & Legal Risks
05
The legal aspects of employment in Malaysia are significantly different in comparison to the Canada
The aspect that is the most different is the termination practices and regulations
In comparison to the Canada the employment laws allow for employers to terminate their employees for any reason except illegal discrimination and other factors that may have a bad reputation on the firm.
The employment structure in Malaysia is more regulated, there must be certain types of justifiable reasons for termination.
Employers must adhere to notice periods or provide compensation in the case of termination to ensure protection of the employees (Doherty & Franca, 2020).
Legal system in Malaysia with respect to Employment laws
The legal framework in the Canada is the common law system, whereas the one in Malaysia is a combination of common law and Islamic law
With respect to Intellectual property laws Canada has strong enforcement and stringent laws, whereas in Malaysia its enforceability is variable and there are strengthened laws.
With respect to regulatory compliance Canada is decentralized and varies across states
This aspect differs from Malaysia as their regulatory compliance is complex and centralized with various regulations.
Lastly, the contractual agreements in the Canadian emphasize the freedom of a contract whereas in Malaysia there must be an alignment with local practices.
Significant differences in the Canadian Legal System and the Malaysian legal system
Specifics of Malaysian Employment Laws
The key components of Malaysian employment law is the employment act 1955, which regulates the terms and conditions of employment for workers who have been found to earn below a specified wage
The industrial relations act helps in outlining resolution mechanisms and collective bargaining rights
It is imperative to understand these regulations
In understanding these regulations would be able to understand the employment landscape in Malaysia
Broad legal risks of doing business in Malaysia
There are many factors to consider when doing business in Malaysia
The Malaysian legal system is inclusive of common law, statutory law and Islamic laws
This range of diversified legal framework contains both the types of opportunities and challenges for foreign companies like ABC Manufacturing
These type of complexities require a comprehensive and detailed understanding of the legal environment in Malaysia and compliance requirements with various regulations (Franck & Anderson, 2019).
Legal risks in Malaysia
There are many legal risks to consider when starting a business in Malaysia
There is the risk of enforcement variability and risk of infringement when it comes to IP protection
Coming to the aspect of regulatory compliance there are complex laws and penalties for failure of compliance
With respect to contractual agreements the risk is the alignment with local practices
Lastly, the political stability keeps changing which has an impact on the business environment.
Looking at the legal risks when expanding to Malaysia and how to tackle them briefly
For ABC manufacturing hiring a local legal counsel is beneficial as they are well versed with the laws of the country
Another aspect that ABC manufacturing must do is to carry out proper due diligence and must properly look into legal, regulatory, and compliance landscapes.
They must be able to create robust contracts that align with local practices
They must develop and implement compliance plans align with Malaysian laws
Lastly, there must an understanding of the countries legal system.
Binte Abdullah Sani, H. (2019). Elite Politics, Jurisdictional Conflicts and the Legacy of Colonial State Building in Malaysia. https://muse.jhu.edu/pub/126/article/777340/summary
Hale, C. (2023). A Brief History of Singapore and Malaysia: Multiculturalism and Prosperity: the Shared History of Two Southeast Asian Tigers. Tuttle Publishing.
Hamayotsu, K. (2018). the political origins of islamic courts in divided societies: the case of malaysia. Journal of Law and Religion, 33(2), 248-270.
Ismail, F., Chan, S. W., Bahrol, K. M., & Abdullah, M. F. (2019). Employment contract in Malaysia.
Kamarudin, M. K., NOR MUHAMAD, N. H., ALMA'AMUN, S., Abdullah, A. H., Saat, S., & Samurah, N. O. (2020). Inter vivos transfers based on affection for wealth distribution planning in Malaysia. The Journal of Asian Finance, Economics and Business, 7(4), 299-307. https://koreascience.kr/article/JAKO202014862061289.page
Powell, R. (2020). English in Asian Legal Systems. The Handbook of Asian Englishes, 863-886. https://doi.org/10.1002/9781118791882.ch38
Tew, Y. (2018). Malaysia's Invisible Constitution.
Zuliyah, S. (2021). Comparison of Indonesian and Malaysian Legal Systems in Rules, Traditions, and Community Behavior. Journal of Transcendental Law, 3(1), 15-29. https://doi.org/10.23917/jtl.v3i1.15169
Doherty, M., & Franca, V. (2020). Solving the ‘gig-saw’? Collective rights and platform work. Industrial Law Journal, 49(3), 352-376. https://doi.org/10.1093/indlaw/dwz026
Franck, A. K., & Anderson, J. T. (2019). The cost of legality: Navigating labour mobility and exploitation in Malaysia. International Quarterly for Asian Studies, 50(1-2), 19-38. https://doi.org/10.11588/iqas.2019.1-2.10288
References
Thanks
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