Arifin Zakaria should explain whether the Ayer Molek case is one reason why Justice Hishammuddin has been denied elevation to the Federal Court twice – a case of former CJ Eusoffe Chin exacting his final vengeance

Chief Justice Arifin Zakaria, who is also Chairman of the Judicial Appointments Commission (JAC), should explain whether the controversial Ayer Molek Rubber Company vs Insas Bhd case is one reason why Justice Mohd Hishamudin Mohd Yunus has been by-passed twice and denied elevation to the Federal Court, the first time in September 2013 and the second time in the latest batch of judicial elevations this year – a case of former Chief Justice Tun Eusoffe Chin exactly his final vengeance.

Arifin owes not only the local and international legal and jurist community, but the whole nation, a proper and satisfactory explanation as a series of recent cases and events have put the Malaysian judiciary in the dock as to its ability to uphold a truly independent judiciary with just rule of law.

The latest judicial shocker is the revelation by retired Court of Appeal judge Justice K.C. Vohrah who wrote in an in-house Malaysian judiciary publication last year to mark the Court of Appeal’s 20th anniversary that the former chief justice Eusoff Chin tried to influence a Court of Appeal judge who was about to hear the appeal of the controversial Ayer Molek case in 1995.

Vohrah had sat on the panel hearing of the Ayer Molek appeal with Court of Appeal Judge NH Chan and a co-opted High Court judge, Siti Norma Yaakob, who later rose to become the first female Chief Judge of Malaya.

The Ayer Molek case had been an infamous example in the catalogue of cases and events in the eighties and nineties which marked the downfall of Malaysia’s national and international reputation for true judicial independence and just rule of law – starting with the sacking of Tun Salleh Abas as Lord President of the Supreme Court and two Supreme Court Judges, Tan Sri Wan Suleiman Pawan Teh and Datuk George Seah by the then Prime Minister, Tun Dr. Mahathir Mohamad in 1988, a judicial devastation which Malaysia had not fully recovered after more than a quarter of a century and change of two Prime Ministers in 2015.

As explained by Vohrah, the Ayer Molek case involved the grant of an ex-parte order to compel Ayer Molek to effect the transfer of 540,000 ordinary shares of Ayer Molek to Insas in the share register of the company and to issue new certificates in Insas’ names within two working days of their receiving the share certificates.

On April 12, 1995, Ayer Molek filed an application to set aside the ex-parte mandatory order of April 10, 1995.

That application came up for hearing before the High Court on April 13, 1995 but the judge adjourned it to April 27, 1995 which was after the two days period he allowed for compliance of his ex-parte order.

The defendants immediately applied for a stay of the ex-parte mandatory order pending disposal of their application to discharge it. The High Court judge refused to grant a stay of his ex-parte order.

On April 14, 1995, the transfer of the shares was registered in the share register of Ayer Molek and new share certificates were issued to Insas under compliance of the ex-parte order.

On April 18, 1995, Ayer Molek filed a notice of appeal against the ex-parte order at the Court of Appeal. On the same day, they filed a motion for a stay of the ex-parte order pending their appeal.

As Vohrah wrote in his article, it was abundantly clear at the Court of Appeal that grave injustices had been perpetrated in the case at the High Court level.

Insas – through their legal advisers – have abused the process of the High Court by instigating the injustice through misuse of the court’s procedure by manipulating it in such a way that it becomes manifestly unfair to the defendants.

The Court of Appeal ruled: “By doing what they did, these unethical lawyers have brought the administration of justice into disrepute. While it does not render the proceedings to be in any way invalid, it may give the impression to right thinking people that litigants can choose the judge before whom they wish to appear.”

This was where Court of Apeal judge Justice N. H. Chan made his celebrated quote from Shakespeare’s “Hamlet” in saying that “Something is rotten in the state of Denmark” as the High Court case heard when the courtt was housed in Wisma Denmark or Denmark House in Kuala Lumpur.

The Court of Appeal granted the stay order on July 26, 1995 and written grounds were given five days later.

Vohrah wrote: “Swift as an arrow a stay application on appeal against that decision was filed on July 27, 1995. The application and appeal were heard at the Federal Court on August 1, 1995 before a three-member bench comprising Eusoff (above), a Court of Appeal judge and a High Court judge. The written grounds was provided 12 days later which set aside the Court of Appeal decision.”

The former judge noted that the Malaysian Bar was aghast at the decision made by the Federal Court and issued a strong statement against it while saying the panel headed by Eusoff had been illegally constituted.

I brought up the case in Parliament in October 1995, raising the constitutional issue in the Ayer Molek controversy where a High Court judge made a “double jump” to sit as a Federal Court judge, totally at variance with Article 122(2) of the Federal Constitution.

I argued that it was very clear that constitutionally as well as going by common sense, only a court of Appeal judge and not a high Court judge can be appointed in special circumstances to fill a vacancy in the federal Court panel as otherwise, we will have the extraordinary spectacle of a High court judge doing a “double-jump” leaping over the Court, of Appeal to sit as a federal Court judge.
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In the Ayer Molek case, a high Court judge was appointed as one of the three-member panel of judges of the federal Court, which would make its judgment a nullity and the judgment of the court of Appeal as the highest judgment on the issue in the land.

My position in Parliament was vindicated in the RM100 million defamation suit later brought by V.K. Lingam, the lawyer for Insas against Euro Money Publications over an article titled “Malaysian justice on trial” which was published in the International Commercial Litigation magazine.

The case came up before Justice Mohamad Hishamudin Mohd Yunus. While Lingam submitted that the Court of Appeal judgment in the Ayer Molek case had been expunged, Justice Hishamudin stood his ground saying the Federal Court panel by Eusoff was not legally constituted as it comprised only “two legally competent judges, namely, Eusoff and a Court of Appeal Judge. The third judge of the panel, Pajan Singh Gill, was not legally competent to sit on that bench as he was only a High Court judge then”.

Justice Hishamudin ruled that the judgment of the Court of Appeal by Chan, Siti Norma and Vohrah in the Ayer Molek case is still wholly intact and is still a valid and binding judgment and “I am entitled, indeed I am duty bound, to take cognisance of the judgment in deciding on Lingam’s claim in this action”.

Eventually, Lingam’s suit was dismissed by Justice Hishamudin.

Is the Ayer Molek case one reason why Justice Hishammuddin has been denied elevation to the Federal Court twice – a case of former CJ Eusoffe Chin exacting his final vengeance?