The High Court in Kuala Lumpur has firmly rejected an attempt by three former directors and shareholders of a travel agency to delay a RM492,480 refund obligation to umrah pilgrims whose trips were cancelled during the COVID-19 pandemic. Judge Leong Wai Hong dismissed the stay application filed by Datuk Dr Fathul Bari Mat Jahya, Sekh Mohd Fazzli Sekh Mohd Ruzi and Wan Azizul Wan Yusoff, determining that their grounds for appeal did not warrant the extraordinary relief of delaying payment. The ruling came with an order requiring the applicants to pay RM5,000 in costs, further underscoring the court's position that the attempt to defer payment lacked merit.
The three men, who had been directors and shareholders of Rehla Travel Services Sdn Bhd, have faced mounting legal troubles stemming from their handling of ticket payments during the pandemic's initial outbreak. In December 2025, the High Court had already dismissed their substantive appeal and upheld a Sessions Court judgment that found them liable for fraud. That earlier decision upheld a claim by KRS Travel Sdn Bhd, the pilgrimage tour operator that had engaged Rehla to arrange flight bookings for its clients. The current application represented their latest attempt to circumvent fulfilling the refund obligation, but the judiciary has now effectively closed that avenue.
Understanding the underlying dispute requires examining how the original transaction unfolded and subsequently deteriorated. In February 2020, KRS engaged Rehla Travel Services to procure airline tickets for umrah pilgrims destined for Madinah and Jeddah. KRS remitted RM492,480 to Rehla for these bookings, trusting the travel agency to manage the ticketing process. Rehla, functioning as an appointed ticketing agent for Malaysia Airlines Berhad, forwarded the payment to the airline and received confirmation of bookings along with Passenger Name Records for each traveller. Everything appeared to proceed according to standard industry practice at that stage.
The entire arrangement collapsed when Malaysia Airlines cancelled the tickets in response to the escalating COVID-19 crisis and subsequent travel restrictions. During this turbulent period, Rehla Travel Services ceased business operations, leaving the situation in limbo. KRS, facing pressure from its clients who had paid for pilgrimages that could no longer occur, sought recovery of the RM492,480 from Rehla and its directors. This straightforward position reflected the expectation that when travel plans are cancelled through no fault of the customers, payments should be returned or applied to alternative arrangements.
The defendants mounted a defence that fundamentally challenged KRS's right to pursue them. They contended that Rehla had merely functioned as Malaysia Airlines' ticketing agent and therefore bore no responsibility for refunding the money. Their argument hinged on the assertion that once payment had been transmitted to Malaysia Airlines for the ticket purchase, the liability shifted entirely to the airline. They maintained that if any refund obligation existed, it rested with Malaysia Airlines, not with Rehla Travel Services or its directors. This position, while superficially appealing from a narrow contractual standpoint, ignored the broader commercial reality and the chain of responsibility in the travel services arrangement.
The Sessions Court, after conducting a full trial, rejected this defence and found the defendants liable for fraud. The judgment concluded that the three men had deliberately failed to return money that should have been refunded to umrah pilgrims, thereby committing a fraudulent act. The court's finding carried significant implications, as it determined that the directors' obligation to KRS—and by extension to the pilgrims—was not merely a technical contractual matter but involved dishonest conduct. The High Court's subsequent dismissal of their appeal in December 2025 validated this assessment and affirmed the RM492,480 liability.
The current application for a stay of execution represented the defendants' final procedural manoeuvre to avoid immediate payment. By requesting a postponement pending their further appeal, they sought to maintain the status quo while preserving their legal options. However, Judge Leong found that the grounds supporting this request did not meet the threshold required for such judicial intervention. The court essentially determined that delaying payment would not serve justice and would only further disadvantage the pilgrims who had already been denied their trips and awaited recovery of their funds.
This case illuminates several important issues for Malaysia's tourism and travel services sector. It demonstrates that tour operators and travel agencies cannot escape liability by relying on technical distinctions between agents and principals when customers ultimately suffer financial loss. The decision reinforces that when payments flow through intermediaries, those intermediaries retain responsibility to ensure proper handling and refund of customer funds. For Malaysian travellers engaged in religious tourism, particularly umrah and hajj pilgrimages, the judgment offers reassurance that courts will not countenance retention of refunds under contrived technical arguments.
The implications extend to how travel companies should structure their operations and handle customer deposits during crises. KRS Travel Sdn Bhd's resort to litigation and ultimate success in recovering the full amount demonstrates that courts are willing to scrutinise the conduct of travel intermediaries carefully. Companies operating in this sector should maintain clear refund policies, ensure adequate financial controls, and prioritise returning customer money promptly when trips cannot proceed. The defendants' attempted delay only added to their legal costs and reputational damage without achieving any protective benefit.
For Southeast Asian travellers and pilgrimage tour operators, this ruling carries regional significance. Travel disruptions caused by external events—whether pandemic-related, weather-related, or political—regularly generate disputes over refunds and liability. The Malaysian High Court's firm stance against defendants who seek to defer accountability sets a precedent suggesting that regional courts will similarly prioritise protecting consumers' financial interests. Tour operators across Southeast Asia should take note that procedural delays and technical arguments regarding agent relationships will not shield them from refund obligations when trips are cancelled.
The RM5,000 cost order imposed on the defendants adds a financial penalty dimension to the ruling. Beyond the primary obligation to refund RM492,480, the applicants must now also bear litigation expenses, making the total financial consequence of their conduct substantially higher. This cost allocation serves both as compensation to the prevailing party for defending its position and as a deterrent against frivolous or dilatory applications. The message to other potential defendants in similar situations is that attempting to game the system through procedural tactics carries explicit financial consequences.
Looking forward, the question of whether the defendants will comply with the refund order or pursue further legal avenues remains unclear from available information. What is certain is that the High Court has eliminated their ability to delay payment pending appeals, and the judgment reinforces that Malaysian courts view non-refund of cancelled trip payments as fraudulent conduct warranting full liability. For the umrah pilgrims who initiated this chain of events by paying for trips that never materialised, the court's steadfast rejection of the stay application represents a significant step toward recovering their funds, even if enforcement mechanisms may require additional action.
The case ultimately reflects the judiciary's commitment to protecting Malaysian consumers from unscrupulous travel intermediaries and those who would weaponise procedural complexity to avoid accountability. As travel and tourism continue to recover in Malaysia and the broader Southeast Asian region, such judicial clarity provides essential protections for both legitimate operators and paying customers navigating an industry frequently disrupted by circumstances beyond anyone's control.
