Federal Court to Decide Landmark Case on Constitutional Property Rights in Semantan Estate Appeal

PUTRAJAYA (Nov 6, 2025) — A 70-year legal dispute over the government’s acquisition of Semantan Estate land in Kuala Lumpur has reached the Federal Court, in a case that could redefine constitutional property rights and the extent of judicial power in Malaysia’s land laws.

Representing Semantan Estate (1052) Sdn Bhd, senior counsel Datuk Dr Cyrus Das argued that the Federal Court must determine whether courts have the authority to “regularise” an illegal land acquisition, previously declared unlawful by the High Court, Court of Appeal (COA), and the Federal Court itself.

“This case goes to the heart of Article 13 of the Federal Constitution — the right to property. It raises the question of whether an unlawful act by the government can later be validated by compensation,” said Dr Das during proceedings on Thursday.

70-Year Dispute over Semantan Land

The controversy dates back to 1956, when the government acquired 263 acres of land in Bukit Semantan, Kuala Lumpur, for RM1.325 million. The land was later developed into the Duta Enclave, which now hosts government buildings, roads, and public infrastructure.

In 2009, the High Court ruled that the acquisition was unlawful, declaring the government had trespassed and that Semantan Estate retained beneficial ownership. That decision was upheld by both the COA and the Federal Court in 2012.

However, after the High Court ordered the return of the land in August 2024, the government successfully overturned the decision at the COA in June 2025, replacing the physical restitution with monetary compensation instead. Semantan Estate is now seeking to appeal that reversal at the Federal Court.

Das contended that the COA’s ruling effectively “regularised an irregularity”, legitimising the government’s unlawful act by substituting the land return with payment.

“The judiciary cannot convert an illegal act into a legal one simply by ordering compensation,” Das argued.

Legal and Constitutional Implications

The case centres on whether Article 13 of the Federal Constitution permits the government to retain unlawfully acquired land by compensating the original owner — a precedent that could have sweeping implications for private landowners, developers, and industrial property investors nationwide.

Das submitted that two pre-Merdeka laws, namely the Government Proceedings Act 1956 and Specific Relief Act 1950, are being challenged for limiting the courts’ ability to order the recovery of land from the government.

Among the 26 questions posed to the apex court, two constitutional questions stand out:

1. Can Article 13 allow the government to keep land unlawfully acquired by paying compensation?

2. Can courts order compensation for compulsory land acquisition where legal procedures were not followed?

If the Federal Court grants leave to hear the case on its merits, it could set a historic precedent for land disputes involving compulsory acquisitions, particularly in commercial property zones in KL and industrial land developments in Selangor.

Government’s Position and Judicial Remarks

Representing the government, Senior Federal Counsel Shamsul Bolhassan argued that the case did not present new or novel legal questions and that compensation remains the rightful remedy under the existing statutory framework.

The three-judge bench — comprising Chief Judge of Malaya Tan Sri Hasnah Mohamed Hashim, Federal Court judge Datuk Hanipah Farikullah, and COA judge Datuk Che Mohd Ruzima Ghazali — heard submissions from both parties and reserved its decision until Nov 13.

In its earlier decision, the Court of Appeal, led by Datuk Lee Swee Seng, reasoned that ordering the return of land developed into public infrastructure after nearly seven decades would be “impractical and disruptive.” The COA held that, under existing law, Semantan Estate was only entitled to compensation, not restitution.

Wider Impact on Malaysia’s Property and Development Landscape

Legal analysts note that the Semantan Estate case could influence future rulings on land acquisition, urban redevelopment, and commercial property rights across the Klang Valley.

Should the Federal Court side with Semantan Estate, it could open the door for private owners and developers — especially those holding industrial properties in the Subang area or factories in Puchong — to challenge past government acquisitions deemed procedurally flawed.

Conversely, upholding the COA’s decision could reaffirm the government’s authority to compensate rather than restore land in cases involving public infrastructure or commercial redevelopment, such as office spaces in Bukit Jalil or major highway corridors in Kuala Lumpur.

The decision, expected on Nov 13, is anticipated to be one of Malaysia’s most consequential property law rulings in decades — testing the balance between public interest and private ownership rights in the country’s evolving legal and real estate landscape.