PUTRAJAYA (Jan 14): The Federal Court will soon decide whether the government must explain how it calculates anti-dumping duties imposed on foreign companies importing goods into the country.

The ruling would be a landmark matter for foreign exporters, as there are several ongoing and pending cases on this issue. Anti-dumping duties are meant to protect local industries by preventing foreign goods from being sold at unfairly low prices.

A three-member Federal Court bench, led by Datuk Rhodzhariah Bujang, heard Singapore-based NatSteel Holdings' appeal on the matter on Wednesday. NatSteel is challenging a December 2024 Court of Appeal decision that allowed the Malaysian government not to reveal how it calculated import duties.

NatSteel’s lawyer, Manshan Singh, said that before 2019, in other investigations, the government had shared the details, breakdown and computation of anti-dumping duties imposed on exporters, and now not providing the crucial information violates World Trade Organization (WTO) transparency rules, of which Malaysia is a party.

NatSteel, which supplies steel bars for Malaysia’s construction industry, faced a case after the Malaysia Steel Association filed a petition, prompting an investigation by the Ministry of International Trade and Industry, now known as the Ministry of Investment, Trade and Industry (Miti).

According to Manshan, Miti officials visited NatSteel’s Singapore facility, reviewed its accounts, and imposed a 4.97% duty starting January 2020 for five years.

He said NatSteel asked Miti to explain how the duty was calculated, but the request was rejected. The company then filed a judicial review, naming the finance minister and the Finance Ministry, the minister of international trade and industry, Miti, the Royal Malaysian Customs Department, its director general and the Malaysian government as respondents.

In October 2021, the High Court ruled in NatSteel’s favour, ordering the government to explain the calculation. However, in December 2024, the Court of Appeal overturned this, saying the government did not have to provide the calculation.

Then Court of Appeal judge Datuk Seri Wan Ahmad Farid Wan Salleh (now the Chief Justice), who wrote the unanimous decision, said there was no breach of natural justice and ruled that the investigating authority’s actions (not to provide the calculation) were lawful.

“The alleged failure to provide the details, breakdown and computation of how the normal value and dumping margin were calculated, if at all, should not be legitimate grounds for a judicial review. The investigating authority had sufficiently explained the methodology used in determining normal value.

“The data that had been selected for the purposes of determining the percentage of sales below the cost of the like product in the domestic market throughout the period had also been sufficiently disclosed and the respondent had been given the opportunity to be heard. There was, therefore, no breach of the principles of natural justice,” Wan Ahmad Farid said in allowing the government’s appeal.

NatSteel obtained leave to appeal from the Federal Court on June 24 last year based on the question of whether the investigating authority, in exercising its investigative powers pursuant to the Countervailing and Anti Dumping Duties Act 1993 (CADDA 1993) and the Countervailing and Anti Dumping Duties Regulations 1994 (CADDR 1994) to conduct anti-dumping investigations in Malaysia, is under a duty to act in conformity with the WTO Anti Dumping Agreement by virtue of Malaysia’s membership in the WTO.

Manshan told the Federal Court, which also includes judges Datuk Seri Vazeer Alam Mydin Meera and Tan Sri Ahmad Terrirudin Mohd Salleh, that the Court of Appeal had previously made a conflicting decision in the Diler Iron and Steel case, where judge Datuk Lee Swee Seng (now a Federal Court judge) had ruled that the government must show its calculations.

In the Diler Iron case from Türkiye, a duty of 3.97% was imposed by the Malaysian government as enforced in 2020.

Manshan reiterated that the government had an obligation to explain how the 4.97% duty on NatSteel was calculated.

He said NatSteel is not disputing the 4.97% duty itself, and the company has the right to know how the figure was calculated.

Meanwhile, senior federal counsel Rahazlan Affandi Abdul Rahim for the respondents reiterated there was no duty for the government to provide or show how the 4.97% computation was derived.

Rahazlan further objected to suggestions made by NatSteel that the reason the method of calculation was not disclosed was for the government to avoid or shield from scrutiny on the imposition of the figure.

“There is no express provision in the WTO Anti-Dumping Agreement for the actual mathematical calculation to be provided. Everything has been put there; all the essential information has been furnished to the appellant.

“While the company claimed that it is entitled to know how we come up with the tax, all the essential information had been given and is more than sufficient for the imposition of the anti-dumping duty,” he said.

Following this, Rahazlan asked the apex court to dismiss NatSteel's appeal.

Rhodzhariah said the judges need more time to deliberate before giving their verdict.