How are foreign investors protected in Malaysia?

ZAKARIA: Well, when we talk about investors’ protection we have to look at the negative side, for instance, whether they have no access to court. Here, in Malaysia, we have free access to the court. There is no hindrance or impediment as far as access to courts is concerned. Everyone can come to court, the course of litigation is short, and when filing fees apply, only a small amount is needed. The court is always prepared to listen, no matter what the complaint and no matter from which of the parties it originated. The court gives protection not only to foreign investors, but also to local investors as well as our own citizens. This is our philosophy. We also have the intellectual property court, which is exclusively dedicated to intellectual property cases. This has meant that the intellectual property cases now move in a much faster way, both in the high court and in the subordinate courts. Intellectual property courts are very specialized, which helps if there is any complaint by, for example, American investors in case their intellectual property or research has been breached or abused by anybody. They can come to court and seek protection as far as the intellectual property in concerned.

We also have other specialized courts, such as the Muamalat Court and the New Commercial Court (NCC). These are commercial courts entirely dedicated to commercial cases. So, that provides protection to investors because, by having a specialized commercial court, we have a more efficient disposal of cases. Once the case is filed, we can guarantee that it will be disposed by the high court within 9 months, instead of 5 or 10 years as was the case in the past. In the last 3 years, things have moved rapidly and our speedier procedure can be verified by the statistics provided by the courts. We also have special tracks. From the High Court you can appeal to the Court of Appeals with a special track for commercial cases, intellectual cases, and so on. All these special cases get special treatment; this is the fast track and within 3 months these cases are disposed of by the Court of Appeal. Another 6 months are needed for the Federal Court, meaning that a case will be settled in no more than 2 years. That is our target and we have achieved it.

In what specific ways has the Malaysian judiciary system improved?

ZAKARIA: In the past, cases were piled up in court and it was not uncommon for cases to be on the shelf for 5 or 10 years. Now, there are the odd 1 or 2 old cases still on our shelf that have not yet been cleared. But the large majority of the cases have been cleared very rapidly. The Commercial Court, which was set up about 3 years ago, is extremely efficient. Even more developed jurisdictions cannot match us in terms of disposal, which we typically do within 9 months and we can assure that within 9 months everything is cleared. We keep track of all cases because we’ve implemented what we call the Active Case Management; the CMS, that is, Case Management System, which is entirely done electronically. Lastly, we have what we call the Electronic Court (e-Court) and Electronic Filing (e-filing), where all cases are filed electronically from law firms instead of lawyers coming to court with a bundle of hard copies. We are done with hard copies. These are the type of things that speed up the procedures in court. Our trials are conducted with assistance of the audio-video recording system. If you go to court in Malaysia you will notice that judges do not take any notes, because everything is audio-visually recorded. It would be interesting for you to go to a court in Kuala Lumpur. Due to all of this, things are moving rapidly, leaving behind the old ways when you had to write down every single word that was stated by the witness.

Why was the New Commercial Court established? What impact has it had on the judicial system?

ZAKARIA: The New Commercial Court (NCC) started through consultations. We do have consultations, not only with the government, but also with semi-governmental bodies. This consultative body is called “PEMUDAH”. “PEMUDAH” means “to simplify, to facilitate”. The Chairman of this Committee came and saw the then Chief Justice and said that the commercial cases were going very slowly and that the commercial sector was not happy because the business people were not prepared to file the cases, which were taking 5 or 6 years to clear. He then suggested “why don’t you start a new commercial court?” I said that could not happen. Then, I suddenly realized, “why not?” Let the old cases proceed in the original courts. That is when I initiated the NCC. If you have 10,000 cases, you cannot have 1 court. You need to have additional courts and because of that we ended up having 8 NCCs. We got lawyers from the private sector to come and join us and they are very experienced in commercial practice, they have commercial practice backgrounds. So we started the NCC. However, we still had 6,000 old cases standing from the old system, so I decided to assign these to 10 judges, exclusively for them to dispose of, whereas another 8 to 10 judges were in charge of the new cases only. That is when we started moving faster. After 3 years, the 6,000 odd cases had been cleared, which in the past could not have happened. The waiting time for the new cases is now no longer than 9 months for disposal. So that is a demonstration of how efficiently we are moving forward. Because of the success with the NCC, we also started the New Civil Court (NCvC). The original courts still continue disposing of the old cases. There is an active case management system, a strict timeline for lawyers, and a strict instruction against adjournment or postponement of cases. Now things are moving very fast.

In what ways does the Federal Court interact with ministries and the other branches of the government to improve the business climate?

ZAKARIA: The way I look at this is that the judiciary is supposed to be the 3rd branch of the government, so we are still part of the government. We have to work within that system. We have to acknowledge it and cannot be isolated from the government. Being independent does not necessarily mean being isolated. You can be independent and be part of the government and work together with the government to achieve whatever policy the government is trying to implement for the benefit of the people. This is how we work together with the government. We also invite all the agencies, for example, CIDB, which is the Construction Industries Development Board for the promotion of the construction industry, not only locally, but also internationally. CIDB came to us and asked whether we could set up a construction court as in the UK. We said, “yes, put up the proposal and we will put up a specialized court just for the construction industry”. This is how we work in collaboration with the agencies. We call the agencies, the government, and the ministries as well, for meetings from time to time or they call us and then we send our representatives. So, there is always this communication and consultation with the government. This does not mean that we compromise on the independence of the judiciary system. No, no, no! I always believe that the independence of the judiciary is a two level thing; one is the individual level of the judges and the second is the institutional independence. We are independent individually as well as an institution and I can assure you that we have very strong institution, born out of English tradition. We are supposed to be independent and we are independent from the executives and from the other branches of the government.

How would you describe the level of educational attainment from Malaysian Higher Education institutions with regard to incoming lawyers and legal professionals?

ZAKARIA: When I went to law school, we didn’t have any law schools in Malaysia at that time. I went to the UK for my law degree and then went to the bar for the Bar Qualification as a Barrister and came back to join the legal and judicial service. Now, we have a number of law schools in the country, not less than 10 or 15 law faculties in the country. With such number, I think that we have a sufficient number of lawyers in the country at the moment, unlike in the past. With this number of lawyers available we can provide a lot of services to the public in terms of legal service, advisory service, and so on. Lawyers, as you know, do not only work in the court, and not only as lawyers, they can also go into banking and other fields. They are highly flexible. I think they are in high demand. The lawyers produced locally are still in high demand, in business, in banking, even in public service, which is wonderful. There is still a lot of room and prospect for the legal profession in this country.