Techno Secure Print Sdn. Bhd. v Kementerian Kesihatan Malaysia (WA-25-439-12/2025)

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KERAJAAN MALAYSIA …RESPONDEN-RESPONDEN

On 30.4.2026 having heard the Applicant’s counsel and Federal Counsel on behalf of the Attorney General in respect of the application for leave to commence judicial review proceedings, I dismissed the application. I now provide the reasons for my decision.

The Applicant’s leave application arises from the following principal facts stated in its affidavit in support. They are as follows:

Since 2019, the Applicant had been supplying official hologram security labels to the Ministry of Health Malaysia under the Tender Contract for the Supply of Hologram

(ii) The supply of the official hologram security labels was for a period of four (4) years, commencing from 1.9.2019 until 31.8.2023;

(iii) The security hologram label serves to verify the authenticity of pharmaceutical products registered with MOH;

(iv) Upon the expiration of the contract, the Applicant’s contract with MOH was extended up to five (5) times from 1.9.2023 to 30.9.2025;

On or about 17.5.2023, the MOH issued an open tender for the Supply of Hologram Security Labels for Pharmaceutical Products Registered with MOH, Schedule No. T/P&P: 10/2023 (hereinafter referred to as “First Open Tender”);

(vi) At the First Open Tender, the Applicant was the sole qualifier from the technical aspect but the First Open Tender was subsequently cancelled by MOH;

(vii) Subsequent to the said cancellation, on 13.9.2023, MOH then issued another open tender for the Supply of Hologram Security Labels for Registered Pharmaceutical Products with MOH, Tender Schedule No.: TP&P 67/2023 (hereinafter referred to as “Second Open Tender”);

(viii) However, the Applicant failed to be selected in the Second Open Tender;

(ix) Instead the company Holographic Label Sdn. Bhd. qualified and short-listed from the technical aspect in the Second Open Tender and was crowned the winner. Holographic Label Sdn. Bhd. was a related company to the Applicant;

On the 30.11.2023 the representative of Holographic Label Sdn. Bhd. received a call from the Procurement and Privatization Division MOH to sign the Letter of Acceptance on the 1.12.2023;

(xi) However, whilst the representative of Holographic Label Sdn. Bhd. was on the way to sign the Letter of Acceptance, he received a call from MOH and was instructed not to attend at Putrajaya to sign the letter without any clear explanation provided to date;

(xii) Subsequent to the cancellation of the Second Open Tender, on 30.4.2025, another tender was issued with additional new scope for the Supply of Security Labels and the Management of the Pharmaceutical Track & Trace System (PTTS) for Registered Pharmaceutical Products with the Ministry of Health Malaysia, Tender Schedule No.: TP&P 92/2025 (hereinafter referred to as “Third Open Tender”);

(xiii) The bid for the Third Open Tender was won by a company called Netsmart Sdn.Bhd. notwithstanding the following unfavourable factors as contended by the Applicant. It had no prior experience in the manufacturing of hologram security labels, did not possess a printing security license issued by the Chief Government Security Office, no experience maintaining any manufacturing facilities in Malaysia, relied entirely on the importation of the hologram labels from China, submitted an exorbitant offer price for the labels and finally, had a weak financial standing based on a CTOS search on the said company; and

(xiv) The winner of the Third Open Tender was announced via a public letter dated 30.9.2025.

The Applicant was aggrieved by the decision to award the tender to Netsmart Sdn.Bhd. and files these judicial review proceedings. The reliefs sought are as follows:

A declaration that the process by which the award of contract as determined via the Third Open Tender was illegal;

(ii) An order of certiorari to quash the decision awarding the tender to Netsmart Sdn. Bhd.;

(iii) An order of mandamus against the 1st Respondent to direct the 1st Respondent to award the tender to the Applicant;

(iv) Alternatively, an order of mandamus to conduct a re-tender of the Third Open Tender; and

Special, general and exemplary damages.

Leave to commence judicial review proceedings must precede any application for the reliefs sought. The test to be applied was enunciated by Justice Suriyadi Halim Omar (FCJ) in WRP Asia Pacific Sdn Bhd v. Tenaga Nasional Bhd [2012] 4 CLJ 478 where his Lordship held as follows: [12] ... At the leave stage, on a quick perusal of the material available, if the court thinks that subsequently at the substantive hearing stage an arguable case may be disclosed, and the relief sought may be granted, leave should be granted (IRC v. National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617). In Malaysia, the Federal Court in Mohd Nordin Johan v. The Attorney-General, Malaysia [1983] 1 CLJ 130; [1983] CLJ (Rep) 271 when allowing the appeal, opined that ‘the point taken was not frivolous to merit refusal of leave in limine and justified argument on a substantive motion for certiorari’. Without the need to go into depth of the abundant authorities, suffice if we state that leave may be granted if the leave application is not thought of as frivolous, and if leave is granted, an arguable case in favour of granting the relief sought at the substantive hearing may be the resultant outcome. A rider must be attached to the application though ie, unless the matter for judicial review is amenable to judicial review absolutely no success may be envisaged.

The Applicant bears the onus of establishing that it has an arguable case for the reliefs sought to be granted at the substantive hearing. I am of the view that it has failed to demonstrate such an arguable case.

The Applicant is essentially aggrieved by the process of a tender exercise which resulted in an award of contract to a company which it considers not qualified. Ultimately, in mounting this challenge of judicial review, it is seeking to question the basis of 1st and 3rd Respondents’ award of contract. The cumulative effect of the reliefs sought by the Applicant is to have this court intervene in the decision of the Respondents.

To my mind, an award of contract pursuant to a tender exercise falls within the realm of policy. It is a decision which is solely and exclusively within the purview of the 1st and 3rd Respondents. In a tender exercise, there may be considerations which goes beyond the technical and financial evaluations. The court cannot presume to have knowledge of such matters. For that reason, I am of the view that the award of a contract is essentially a policy decision.

In R Rama Chandran v The Industrial Court of Malaysia & Anor [1997] 1 MLJ 145 the Federal Court expressed reluctance to review matters involving policy considerations. It held as follows: Needless to say, if, as appears to be the case, this wider power is enjoyed by our courts, the decision whether to exercise it, and if so, in what manner, are matters which call for the utmost care and circumspection, strict regard being had to the subject matter, the nature of the impugned decision and other relevant discretionary factors. A flexible test whose content will be governed by all the circumstances of the particular case will have to be applied. For example, where policy considerations are involved in administrative decisions and courts do not possess knowledge of the policy considerations which underlie such decisions, courts ought not to review the reasoning of the administrative body, with a view to substituting their own opinion on the basis of what they consider to be fair and reasonable on the merits, for to do so would amount to a usurpation of power on the part of the courts.

I shall mention a few instances when courts have shown judicial restraint when asked to adjudicate on matters pertaining to policy.

In Tan Sri Abdul Aziz bin Zainal (applying for himself and on behalf of Jawatankuasa Sementara Permohonan Memansuhkan Akta Bank Rakyat) & Ors v Lembaga Pengarah Bank Kerjasama Rakyat Malaysia Bhd & Ors [2023] 6 MLJ 776, the Applicants applied to enforce s. 31 of Bank Kerjasama Rakyat Malaysia Berhad (Special Provisions Act) 1978 [Act 202] to cease the operation of the Act. The Court of Appeal had this to say: [29] Applying the above principle of law in interpreting s 31 of the Act 202, it is plain and obvious that the discretion was given to the second respondent with the concurrence of the Minister of Finance, to decide on the termination of the Act 202. The exercise of discretion can be done at any time if it appears to the second respondent that the enforcement of the Act 202 is no longer necessary. Under the law, only the second respondent with the concurrence of the Minister of Finance can determine the appropriate time to terminate the enforcement of the Act

From the unambiguous right given under sub-s 3(1) of the Act 202, second respondent rejected the applicants’ application citing the following reason: ‘Saya berpandangan dengan melihat kepada keadaan semasa, ini bukan masa yang sesuai untuk Bank Rakyat beroperasi dan ditadbir tanpa kawalan daripada Kementerian Pembangunan Usahawan bagi menjaga kepentingan Bank Rakyat secara keseluruhan’ as clearly stated in the rejection letter. [30] From the given reason, it is comprehensible that the second respondent had purely made a policy decision in exercising his discretionary power. As a Minister that oversee the implementation and the enforcement of the Act 202, the second respondent had clearly indicated that it is not suitable to terminate the operation of the Act 202 under the current situation. It is trite that the courts normally do not meddle with the policy decision.

Similarly in Dr Michael Jeyakumar Devaraj v Peguam Negara Malaysia [2013] 2 MLJ 321 the Applicant who was the Member of Parliament for Sungei Siput challenged the rejection of his application for the 2010 Special Constituency Allocation. Leave to commence judicial review proceedings was refused by the High Court, and affirmed by the Court of Appeal. On appeal to the Federal Court, the Federal Court held: [18] We are in complete agreement with the above view. We would like to add that the disbursement of the Special Constituency Allocation is a policy matter which is not within the purview of the courts. It is our view that the courts is in no position to evaluate the qualifications in the application for the Special Constituency Allocation and to determine or decide on the policy made by the executive. We have to take cognisance of the fact that government policies emanate after consideration of a number of technical factors which are often non legal; and judges do not possess the necessary information and expertise to evaluate these non- legal factors and to pass judgment on the appropriateness or adequacy of a particular policy. [19] In this regard, we would quote the relevant passages of the renown authors, MP Jain and SN Jain from their book entitled Principles of Administrative Law (6th Ed), at p 1069: It is not normally within the domain of any court to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable disposition for the purpose of varying or annulling it, based on howsoever sound and good reasoning, except where it is arbitrary or violative of any constitution, statutory or any provision of law. When the government forms its policy it is based on a number of circumstance on facts, law, including constraints based on these resources. It is also based on its expert opinion, it would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits. The court would dissuade itself from entering into this realm which belongs to the executive (see State of Punjab v Ram Lubhaya Bagga, AIR 1998 SC 1703). On matters affecting policy and requiring technical expertise, the court would leave the matter for decision of those who are qualified to address this issue. Unless the policy or action is inconsistent with the constitution and the laws or arbitrary or irrational or abuse of power, the court will not interfere with such matters (see Federation of Railway Officers Assn v UOI, AIR 2003 SC 1344). [20] …Courts must be wary of unduly extending its judicial arms to policy matters which are exclusively within the domain of the executive. Unwarranted usurpation and transgression by the judiciary into the realm of the executive and vice versa will bring about disrepute to our system of government which upholds the separation of powers between the three main components vis a vis the executive, the legislature and the judiciary.

If leave is granted, it will result in the Respondents having to justify and defend the award of contract to Netsmart Sdn. Bhd. In determining if the decision of the Respondents is open to review at the substantive hearing, the court will be transgressing into a matter within the exclusive province of the executive.

In the final analysis, the question to ask is whether the conduct of a tender process which leads to an award of a contract is a decision which is amenable to judicial review. I am of the view that it is not.

For the above reasons, leave to commence judicial review proceedings was refused to the Applicant. Dated: 26th June 2026. -sgd-Alice Loke Yee Ching Judge High Court Kuala Lumpur Counsels for Applicant: Tan Sri Azhar bin Harun (En. Kenny Chan Kean Li & En. Lim Poh Leong together wih him) Tetuan Azhar & Goh Counsel for the Attorney General: Pn. Kimberly Ye Wanchuin