PETALING JAYA: The government is unlikely to recognise an arbitration award issued in favour of a group of former members of the armed forces who want their pensions revised according to current salary scales, sources said.
This is because the Malaysia Arbitral Tribunal Establishment which made the order is not an arbitration centre recognised by the government.
“The Attorney-General’s Chambers (AGC) which represents the government in legal disputes did not participate in the proceedings. It was an ex-parte award,” the source told FMT.
The award was made in line with a June 27 Federal Court ruling that amendments made in 2013 to the Pensions Adjustment Act 1980 infringed a constitutional provision which states that any new pension scheme cannot be less favourable than the previous one.
Lawyer Engku Aminuddin Ibrahim, who represented the group, said tribunal head Iszam Kamal Ismail had agreed that the amendments were ultra vires the Federal Constitution, and ordered the pensions to be revised.
He told FMT that the decision will now go to the High Court for endorsement and enforcement.
However, the source said: “The AGC will act accordingly when the matter comes up.”
Meanwhile, lawyer R Kengadharan said parties to a dispute can opt for arbitration if an agreement between them contains a clause which allows for it.
However, he said the dispute between the army veterans and the government was one of public law.
“I am puzzled why the aggrieved party did not go to court when the subject is about public law,” he said.
The arbitration action had been brought by 2,332 veterans from all three wings of the armed forces. They contended that the amendments to the Pensions Adjustment Act 1980 were unlawful and had deprived them of their right to revised rates each time the government adjusts the salaries of armed forces personnel.
The group had named the Armed Forces Council, defence ministry, finance ministry and the government as defendants.
The case arose after former Wisma Putra staff member Aminah Ahmad and 56 retired civil servants filed a lawsuit against the public services department claiming that the amended Sections 3 and 6 of the Pensions Adjustment Act 1980, introduced by Pensions Adjustment (Amended) Act 2013, violated Article 147.
The government has also gone to the Court of Appeal to reverse a High Court ruling that allowed retired judge Ian Chin to claim a shortfall in pension payments made to him between 2015 and 2022.
In another appeal, a group of 26 former senators want the Court of Appeal to overturn a High Court order in 2020 dismissing their application for a declaration that they were entitled to a re-computation of a revised pension that came into effect on Jan 1, 2015.