Malaysia Federal Court | Principle of separation of powers does not apply to invalidate legislative delegation of powers to SAC and the Courts for ascertaining Islamic law

Federal Court of Malaysia: A Full Bench of Richard Malanjum, Ahmad Maarop, Zaharah Ibrahim, David Wong Dak Wah, Ramly Ali, Azahar Mohamed, Alizatul Khair Osman Khairuddin, Mohd Zawawi Salleh and Idrus Harun, JJ. concluded that vesting of judicial powers in Shariah Advisory Council (‘SAC’) does not violate the doctrine of separation of powers.

The fundamental question put forward before the court was that whether Sections 56 and 57 of the Central Bank of Malaysia Act, 2009 were in breach of the Federal Constitution and unconstitutional by reason of contravening Part IX of the Federal Constitution for the said sections having the effect of vesting judicial power in the SAC. The main issue was whether the impugned provisions violated the doctrine of separation of powers.

The Court referring to Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat, (2017) 4 AMR 123 observed that the doctrine of separation of powers was sacrosanct in the constitutional framework and was a part of the basic structure of the Federal Constitution but at the same time the doctrine also recognized that, wherever necessary, one branch of the government should be allowed to exercise part of the powers of another branch and the delegation of power by one branch of the government to another. Reliance was also placed on Tan Sri Abdul Khalid Ibrahim v. Bank Islam Malaysia Berhad, (2010) 4 CLJ 388 wherein it was explained that it was necessary to designate the SAC to ascertain the acceptable Shariah position.

The 2009 Act which established the SAC of CBM as the authority and reference point for the ascertainment of Islamic law for the purposes of Islamic banking and financial business was held by the Court as a proper constitutional mechanism to assist the courts in applying the correct Islamic laws to resolve Islamic financial disputes and upholding Shariah complaint on such matters, as permitted by the Federal Constitution.

The Court referred to Lord Reed’s remarks at the 32nd Sultan Azlan Shah Law 28 Lecture, 2018, where he said, “Neither the separation of powers, nor the principle of judicial independence, means that the courts have to be isolated from the other branches of the State”.

In view of above, the Court concluded that the impugned provisions did not trespass or intrude onto the judicial power and hence did not violate the doctrine of separation of powers.[JRI Resources SDN BHD v. Kuwait Finance House (Malaysia) Berhad,  2019 SCC OnLine MYFC 1, decided on 19-04-2019]

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