This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

AFTER more than half a century of interminable legal proceedings, Semantan Estate (1952) Sdn Bhd won a major victory in August when the Kuala Lumpur High Court allowed its application requesting the Federal Territory Land Registrar to register the 263.272-acre “Duta enclave” land in its name.

The company will have to hold off on the champagne as the registrar and government have appealed the judgment in the long-standing land dispute which also involves a number of government buildings worth billions of ringgit.

The pre-Merdeka land case of 1956 is headed for another round of legal battle at the Court of Appeal (COA) in February should the company and the government not reach an amicable solution to the dispute as a three-member appellate bench has fixed two days to hear the appeal.

The government and registrar are appealing High Court judge Datuk Ahmad Shahrir Mohd Salleh’s order that the registrar transfer ownership of the Duta enclave land, free of any encumbrances, from the government to the company within three months.

However, on Sept 12, Ahmad Shahrir granted a stay of the execution of his order, pending an appeal by the government.

In its appeal, the government is arguing that the company is only entitled to monetary compensation based on the Government Proceedings Act 1956 (GPA) and the Specific Relief Act 1950 (SRA), and not physical ownership of the title.

However, Semantan Estate’s counsel Datuk Dr Cyrus Das, who appeared with Ira Biswas, maintains that his client is entitled to vacant possession of the land as per a 2009 High Court decision, whereby the court ruled that the government had trespassed on the land, and hence, Semantan Estate is entitled to possession of the land plus compensation.

On its part, Semantan Estate is appealing another High Court decision in 2021 by judge Datuk Ahmad Kamal Md Shahid (now Court of Appeal judge), in not granting it a mandamus order to compel the government to revert possession of the land back to the company, despite the High Court, Court of Appeal and Federal Court’s ruling that the government had trespassed on the land.

Cyrus submitted that the High Court’s ruling, in not abiding by the earlier decisions solely because government buildings have been erected on the land, was in breach of natural justice and that the court of appeal should allow Semantan Estate’s appeal.

At stake are the various government buildings worth billions of ringgit that now sit on the prime land that was originally designated for embassies — hence the name “Duta enclave” or diplomatic enclave.

The buildings include the government office complex that houses the Inland Revenue Board headquarters, as well as the National Examinations Syndicate, Syariah Court Complex, the Federal Territory Mosque, the National Archives and the Tun Razak hockey stadium.

Other structures are the National Tennis Complex, Integrity Institute of Malaysia (IIM), Malaysian Anti-Corruption Academy, Institute of Islamic Understanding Malaysia (IKIM), the Duta bus terminal and pockets of land that have yet to be developed.

There is also the main road and overhead bypass from Jalan Duta (now known as Jalan Tuanku Abdul Halim) leading to Segambut on the land.

The three-member Court of Appeal chaired by Judge Datuk Lee Swee Seng had asked parties to address three issues when they resume submissions on Feb 20 and 21.

•    Whether Section 29(1)(b) of the GPA and Section 8(3) of the SRA prohibit the court from granting the mandamus order and Section 417 of the National Land Code (NLC) order to give possession pursuant to the Aug 7, 2024 High Court order; whether these two provisions are unconstitutional for being ultra vires (beyond the powers of) Article 13 (Rights to Property) of the Federal Constitution;

•    Whether in lieu of an order for transfer of the title to Semantan Estate and delivery of possession, this COA may order compensation with the directive that the evaluation that the compensation be based on is at the current market value of the land, or whether the compensation ordered should be at the date of the possession taken by the commissioner of land; and

•    Whether the COA has the jurisdiction to remit this case to the High Court with directions to make a full assessment of damages for compensation under the Rules of Court or an appeal under Section 417 of the NLC.

The tussle over the registration of titles and possession aside, one issue that both parties agree on is that damages or compensation is due to Semantan Estate. However, they have yet to agree on the quantum.

Now under liquidation, Semantan Estate was only compensated to the tune of RM1.3 million when a portion of the land — 225 acres — was acquired in 1956. The then Selangor government also acquired other portions of the land but did not pay any further compensation.

Subsequently, the land collector agreed with Semantan Estate that the acquisition of the land — previously Ladang Batu — was invalid. This resulted in a legal tussle over the land spanning from 1960 to today, leading to numerous court battles referred to as Semantan I, Semantan II and Semantan III.

It was in Semantan III that the company succeeded at the High Court in 2009 as the court declared that the government had trespassed on the land and that it was entitled to damages owing to violation of its property rights under Article 13.

Since the 2009 decision, which was upheld by the Court of Appeal and then the Federal Court in 2012, and a failed review by the government at the apex court in 2017, the company had taken a two-prong action by filing for a judicial review that was heard by Ahmad Kamal and the recent decision by Ahmad Shahrir to compel the change in land titles.

This action since the Federal Court’s decision in 2017 dismissing the government’s review of the High Court’s 2009 decision can be referred to as Semantan IV.

Prior to the 15th General Election in November 2022, the then government under Tan Sri Muhyiddin Yassin and later Datuk Seri Ismail Sabri had offered Semantan Estate RM5 billion in compensation, it was revealed by Datuk Takiyuddin Hassan, the then former de-facto law minister.

However, the present administration under Datuk Seri Anwar Ibrahim declared in Parliament that Putrajaya was not prepared to hand over the amount, which is less than half the indicative value of the land estimated by the hired valuers of Semantan Estate liquidator Dr Jim Lai Chee Chuen at approximately RM12 billion — incidentally, the top range of its valuation, as in a separate hearing on mesne profit, Semantan Estate’s valuation ranged between RM3.1 billion and RM12 billion based on simple or compounding interest. Mesne profit is a sum expected to be paid by someone or the government for wrongfully occupying property of the rightful owner.

The government’s estimate is much lower at RM290 million as offered in proceedings at the High Court which are still pending.

A company search reveals Semantan Estate to be under the management of three individuals: Lai, who was appointed liquidator in 2015; Ng Beh Tong, 96; and Ng Tian Ming, 87. The Ngs are also designated as directors of the company.

Given that 2024 is nearly at a close, a further protracted legal battle — which may eventually span beyond 2025 with the appellate bench scheduled to hear the matter in February — appears only too likely.

Ongoing discussions and debates in Parliament on the matter aside, the present government seems to be standing firm in not budging.

Some lawyers have pointed out that should the land titles be handed back to Semantan Estate, the company may rent or lease out the government buildings on the land to Putrajaya.

In any event, given that gulf in position on compensation, the court may well be the final place to settle the dispute, which again may not end at the Court of Appeal but at the apex court in the coming years.

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