Oil royalty suit: Appeal on May 26

The Court of Appeal has set next Thursday to hear state government's suit against Petronas

KUALA LUMPUR:The Court of Appeal will hear next Thursday the appeal by the Kelantan state government against a ruling allowing the federal government to be an intervenor in its suit against Petroliam Nasional Bhd (Petronas) over the oil royalty issue.

The court will also hear another appeal by the state government over the High Court’s refusal to transfer the suit back to the New Commercial Court (NCC).

The High Court has set May 30 for case management of the suit pending the appeal, counsel Rishwant Singh, representing Petronas, told reporters after meeting High Court Judge Zabariah Mohd Yusof in chambers when the case came up for management today.

Senior Federal Counsel Azizah Nawawi is representing the federal government while counsel Alan Gomez is acting for the Kelantan state government.

Rishwant also said that the court set the same day for mention of the application by Petronas and the federal government to try the preliminary issues on a point of law before proceeding with the hearing of the suit.

On March 22, Justice Zabariah granted the federal government’s application to be an intervenor in the suit and to be part of the suit as the second defendant.

She had, on March 31, rejected the state government’s application for the suit to be transferred back to the NCC.

The suit was initially filed at the NCC, but will now be heard at the New Civil Court.

In the suit filed on Aug 30, last year, the Kelantan named Petronas as the sole defendant for alleged breach of contract relating to cash payments to the state over oil revenue.

In the statement of claim, the state government among others, is seeking an order to compel Petronas to make full and truthful disclosure of all facts relating to cash payments payable to Kelantan, including for the period when petroleum was produced, found or obtained off the coast of Kelantan, areas or blocks from where petroleum was found and obtained, and the total sum of cash payments that should be paid to Kelantan.

The state government also demanded that all outstanding cash payments determined by the court must be paid within one month of the court order.

In the suit, the state government explained that the Kelantan Petroleum Agreement signed on May 9, 1975 clearly stated that Petronas should pay in cash five per cent of oil revenue, either from exploration onshore or offshore.

It said that a clause of the agreement stated that the payment should be made in cash twice a year on or before March 1, or on or before Sept 1 and the payment should continue until the oil deposit obtained from the state had been exhausted.

- Bernama