The case pertains to an interview Anwar gave to BBC last year in which he spoke about homosexuality laws in Malaysia.
A report on the interview published by Utusan Meleyu daily appeared to have put Anwar's comments in a way that sought to portray the opposition leader as promoting gay rights in the conservative country.
But Justice V T Singham said in his ruling that nowhere in the BBC interview did Anwar say he promoted gay and lesbian rights.
After the report created a stir, Anwar filed a 50 million Ringgit (Rs 88 crore) defamation case against the daily and its chief editor.
The judge ordered RM 45,000 in costs to be paid by the defendants to Anwar.
He also set a date for case management to assess the damages to be awarded.
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In his judgement, Justice Singham ruled the words in the articles in Utusan Meleyu (Malaysia) were defamatory and could bring down Anwar's reputation and political standing by suggesting he would not make a suitable leader of the federal government.
He said the defendants had failed to prove justification, saying there was no evidence they did not intend to defame the plaintiff and that they had failed in their professional duty as journalists.
"They have also failed to prove fair comment. Public interest was not served as Utusan Malaysia did not publish and reproduce the plaintiff's statement in full," he said.
Justice Singham said the least the defendants should have done was apologise or clarify the article instead of choosing to ignore the legal notice issued by Anwar, leaving judicial action the only avenue left for clarification.
On Jan 20, 2012, Anwar filed a defamation suit seeking RM 50 mil in damages, alleging that the defendants had published two articles on the front page of the daily in relation to his BBC interview.
In his lawsuit, Anwar named Utusan Melayu and its editor-in-chief Abdul Aziz Ishak as defendants.