The Federal Court today allowed Petroliam National Berhad’s (Petronas) application for leave to commence proceedings to challenge the validity of several Sarawak ordinances governing oil and gas matters in the state.
Chief Judge of Malaya Hashim Hamzah, sitting as a single judge, said he is satisfied that Petronas met the threshold for leave to be granted and that the case will be argued and ventilated before the Federal Court in its original jurisdiction.
He said that after hearing submissions from parties, it showed that there are arguable cases and that it is not frivolous or an abuse of court process.
“The applicant is given leave to commence the said proceeding within 21 days from today,” he said.
In January this year, Petronas filed a motion for leave to commence proceedings against the Sarawak government under Articles 4(3), 4(4), and 128(1) of the Federal Constitution by way of a petition.
The national oil and gas company is challenging the legislative competency of the Sarawak legislature to enact certain laws and to declare several laws made by the Sarawak assembly invalid.
Some of the provisions include Sections 7, 7A and 8 of the Sarawak Distribution of Gas Ordinance 2016, Section 3 of the Sarawak Interpretation Ordinance 2005, Section 2 of the Sarawak Oil Mining Ordinance 1958, Section 2 of the Sarawak National Parks and Nature Reserves Ordinance 1998 and Section 2 of the Sarawak Land Code 1958.
It claimed that the Sarawak legislature lacked the competence to enact, modify, amend or revise laws with respect to matters under List 1 of the Federal List in the Ninth Schedule of the Federal Constitution.
Lacking requisite legislative competence
In today’s proceedings before the Federal Court, lawyers for Petronas, Cyrus Das and Khoo Guan Huat, submitted that the company has an arguable case that the Sarawak legislature lacked the requisite legislative competence to enact the impugned laws.
Cyrus argued that the legislative competence of the Sarawak legislature under the Borneo States (Legislative Powers) Ordinance 1963, read with Article 95C of the Federal Constitution, is limited to the distribution of gas within the state and does not extend to other activities or aspects of the petroleum lifecycle.
Cyrus said any law purporting to implement or having the effect of implementing international treaties, conventions, or agreements would conflict with Article 76 of the Federal Constitution.
Sarawak Attorney-General Saferi Ali objected to the application, saying that Petronas has failed to meet the threshold of presenting an arguable case.
Sarawak state legal counsel JC Fong argued that the leave application should be dismissed as the state did not encroach on federal powers.
He added that the grounds in the leave application are insufficient to show an arguable case, and the leave application was frivolous.
Senior federal counsel Ahmad Hanir Hambaly@Arwi, appearing for the federal government, told the court that the federal government is not opposed to Petronas’ leave application.
He added that the grounds for Petronas' challenge have met the threshold for leave under Article 4(4) of the Federal Constitution and that there was an arguable case that merited further hearing of the issues.
- Bernama
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