This article first appeared in The Edge Malaysia Weekly on November 3, 2025 - November 9, 2025

ON Thursday (Nov 6), a three-member Federal Court (FC) bench is set to make what could possibly be a landmark decision on property rights.

The matter before them is the long-running case between Semantan Estate (1952) Sdn Bhd and the government that dates back to pre-Merdeka, when what is today 263.27 acres of prime land in the Duta Enclave in Kuala Lumpur was forcibly acquired.

Although Semantan Estate has won its case — that the land was illegally acquired — it has not won the fight to have the land title transferred back to it. This is because the Court of Appeal (CoA) had on June 24, 2025, ruled that it was only entitled to compensation and not the right to have the land back.

The CoA’s decision overruled the Kuala Lumpur High Court’s order to the government to transfer the title back to Semantan Estate. On the land today sits government buildings such as the National Archives, Inland Revenue Board and Malaysia Examinations Syndicate, the National Hockey Stadium and other sporting facilities, and roads and interchanges.

The FC will decide whether to grant the company’s application for leave (permission) to review the CoA’s decision. If it grants the review, the merits of the case will be argued all over again. If it decides otherwise, this will effectively be the end of the matter.

Central to the appeal is Article 13 of the Federal Constitution on the rights to property since it has been determined that the government had indeed trespassed on the land.

The right to property is one of the fundamental rights that Malaysian citizens have. Lawyers for Semantan Estate had posed 26 questions around this fundamental right to the court in arguing that their client was entitled to have the land back.

The CoA, however, unanimously concluded that Semantan Estate was entitled only to compensation, citing several laws that had been in place before Merdeka when the acquisition took place, like the Government Proceedings Act 1956 (GPA) and Specific Relief Act 1950 (SRA).

Datuk Lee Swee Seng, now a Federal Court judge, in writing the bulk of the unanimous decision of the CoA, said that because of the GPA clause [Section 29 (1) (b)], Semantan Estate’s attempt to obtain the land title and to have the land and buildings returned may be restrained and restricted as stipulated under Section 8(3) of the SRA.

“The words mean what they say. There is a prohibition, and no order is to be made to the recovery of the land. This is to ensure a public authority can perform its duty and obligation,” he said. “Even if the government is supposed to pay, the acquisition is considered to be lawful.”

In the written judgment, Lee described it as a “horrendous” consequence if an order were issued to return the land to Semantan Estate after nearly 70 years. He said what were on the subject land before December 1956 when the government took possession of it were just old rubber trees.

“Now, it is part of a fully developed township where there are various government buildings housing various facilities that serve the public … there is also a system of roads, highways and flyovers serving the public and connecting it with the surrounding areas, all developed and continue to be developed,” Lee noted.

The judge, who sat with Datuk Azimah Omar and Datuk Wan Farid Wan Salleh (now Chief Justice), said a sensible approach borne out of realities on the ground is that at the end of the day, the challenge would revolve around the issue of the adequacy of the compensation sum unless there is mala fide in the land acquisition for a purpose other than a public purpose.

On compensation, the CoA ruled that it should be based on the market value at the time the land was illegally acquired and 6% annual interest.

The legal firm Chooi & Co is representing Semantan Estate, which also has senior lawyer Datuk Cyrus Das to argue its case.

Among the 26 questions they have posed are:

•    As the court had ruled that the government had taken the land unlawfully and the landowner is entitled to possession of the land, does Article 13 permit the government to keep the land by the payment of compensation?

•    Does Article 13 permit the court to order compensation for the compulsory taking of land from a landowner where it has been determined that there was non-compliance with the applicable law for compulsory acquisition?

•    Does Section 29(1) (b) of the GPA apply to proceedings seeking prerogative relief such as a mandamus to an order under Section 417 of the National Land Code to give effect to a judgment against the government?

•    Is Section 29(1) (b) unconstitutional and violate Article 13, if used to prohibit and bar the court from granting a mandamus order (to compel) an order under Section 417 of the National Land Code to cause the registration of and transfer of the legal title, and return possession of land to the lawful landowner when the court declared the land has been unlawfully taken by the government?

•    Is an order of “adequate compensation” based on the market value prevailing as at December 1956 inherently unjust and oppressive? and

•    Where it has been declared by a court that a landowner retained its beneficial interests in land, does this mean the landowner is only entitled to the benefits and profits from the land to the exclusion of return of the legal title and possession of the land?

This case has been closely followed by the legal fraternity and the business world as a whole, given its far-reaching consequences.

Law firm Skrine & Co wrote about the case in an article titled “The Semantan Estate Saga: Tale As Old As Time”, touching on Article 13 and rights to property constitutional safeguards and the limits of property rights enforcement.

The firm wrote it was not difficult to see how it would be impractical for the government to return the Duta Enclave with the numerous significant government buildings and public infrastructures on it.

“However, the fact remains that if the land acquisition process is not validly completed, legal ownership of the Duta Enclave cannot pass, and the government should incur the financial consequences as a result thereof. Instead, it seems to be that even if there are a series of errors made by the Collector of Land Revenue in the land acquisition proceedings, landowners like Semantan Estate are limited (only) to monetary compensation.

“It would be interesting to see the questions to be answered by the Federal Court for this matter as there evidently seems to be a gap between legal rights and enforceable remedies arising from this matter,” observed Skrine. 

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