Legislation cannot delegate judicial powers to another body without clear constitutional provision; rights to due process must be upheld, and retrospective laws must be explicitly stated.

Introduction

[1] This application concerns fundamental questions about the constitutional validity of ss 56 and 57 of the Central Bank of Malaysia Act 2009 (Act 701) ("Impugned Provisions"). By way of notice of motion (encl 14) pursuant to O 33 r 2 of the Rules of the High 1980, the plaintiff posed three questions for the Court's determination. The three questions posed were as follows:

Question 1

Pursuant to art 4(1) of the Federal Constitution , whether ss 56 and 57 of the Central Bank of Malaysia Act 2009 are inconsistent with art 121(1) of the and therefore, to the extent of such inconsistency, are void, on the following grounds:

a) by making the ruling of the Shariah Advisory Council binding upon the Court, whether the Shariah Advisory Council is usurping the jurisdiction of the Court in determining issues of law which are properly within the jurisdiction of the Court as provided by the art 121(1) of the Federal Constitution and the Courts of Judicature Act 1964 ;

b) whether in the absence of an express provision allowing the judiciary to delegate its judicial powers to any other person or body, whether ss 56 and 57 of the Central Bank of Malaysia Act 2009 are inconsistent with art 121(1) of the Federal Constitution in that ss 56 and 57, in effect, delegates the decision making power of the Court relating to matters of Islamic financial business to the Syariah Advisory Council, or in the alternative, whether the Court can abdicate its jurisdiction to make a decision to the Syariah Advisory Council.

Question 2

Whether by making the ruling of the Shariah Advisory Council binding upon the Court pursuant to s 56 and 57 of the Central Bank of Malaysia Act 2009 , and therefore, binding upon the parties in such litigation, whether such parties are being deprived of their right to be heard, as there are no provisions to enable parties to address the Shariah Advisory Council. In the circumstances, whether:

a) the right of litigants to be heard in Court is a constitutional right as the courts are constituted in a manner to provide for litigants to be heard, and therefore, whether the deprivation of such right is in breach of the Constitution;

b) there is a breach of natural justice and procedural fairness.

Question 3

Whether s 56 and 57 of the Central Bank of Malaysia Act 2009 can have retrospective effect on transactions which occurred prior to the date the said legislation came into effect, namely before 25 November 2009? Whether a party who entered into Islamic banking transactions prior to the said date can be forced to be bound by the Syariah Advisory Council's decision when at the time they entered into such Islamic banking transaction, decisions of Syariah Advisory Council were not binding in Court and therefore, the party had never submitted to the jurisdiction of the Syariah Advisory Council

[2] Realizing that these questions have serious implication on orderly development of the Islamic banking industry in Malaysia and with the consent of the parties, the Court decided to invite the Attorney General's Chambers and Bank Negara Malaysia as amicus curiae to proffer their views on the matter. The Attorney General Chambers and Bank Negara Malaysia kindly responded to the invitation and Datin Azizah Nawawi (assisted by Arik Sanusi Yeop Johari) appeared on behalf of the Attorney General Chambers whilst Tan Sri Cecil Abraham (assisted by Rishwant Singh) appeared on behalf of Bank Negara Malaysia. The Court wishes to place on record it's gratitude for the assistance rendered.

[3] The Court heard the rival submissions on 28 February 2011. Thereafter,