PUTRAJAYA: There is no necessity to call witnesses to testify in the breach of contract suit brought by the Kelantan government against Petroliam Nasional Berhad (Petronas) over oil royalty, the Federal Court held yesterday.
Therefore, the suit will be remitted to the Kuala Lumpur High Court to be disposed of by way of determining the points of law without a full trial under Order 14A of the Rules of Courts 2012.
The suit had been set for case management on July 22 before Judicial Commissioner Rosilah Yop.
In the ruling, the five-member panel of Federal Court judges led by Tan Sri Abdull Hamid Embong said there was no dispute of facts in the case so as to require the court to call witnesses to testify.
Justice Abdull Hamid who sat with Justices Tan Sri Suriyadi Halim Omar, Datuk Ahmad Maarop, Datuk Hasan Lah and Datuk Zainun Ali, said the court found the pleadings in the suit were comprehensive and sufficient to the exclusion of calling oral evidence and witnesses.
“The construction of the agreement (on oil royalty) does not require testimony of witnesses and there is no necessity to call for evidence (witnesses),” he said.
Justice Abdull Hamid also said that the court agreed with the Court of Appeal’s decision in affirming the High Court’s ruling on Jan 18, 2012, which allowed Petronas and the federal government’s application to have the suit be summarily disposed of.
“We find no error of misdirection on the part of the High Court judge, and thus, does not require interference from the court (Federal Court),” said Justice Abdull Hamid.
He, therefore, dismissed the Kelantan government’s appeal against the Court of Appeal ruling on April 26, 2012, which upheld the High Court’s decision and ordered the state government to pay RM150,000 in costs to Petronas. The court also dismissed the Kelantan government’s appeal over the discovery of documents pertaining to the suit.
On Aug 30, 2010, the Kelantan government filed the suit against Petronas demanding that Petronas pay outstanding and future cash payments for petroleum produced off the Kelantan coast, as set in their petroleum exploration agreement.
In the statement of claim, the state government was also seeking damages and costs. However, it did not specify the total amount of the claim sought from Petronas.
In the suit, the state government said 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 a clause of the agreement stated that the payment should be made in cash twice a year, on or before March 1, and on or before Sept 1.
In the lawsuit, the Kelantan government had named Petronas as the sole defendant. However, the federal government then succeeded in its intervenor application and was named second defendant in the suit.
Lawyer Tommy Thomas represented the Kelantan government, while Tan Sri Cecil Abraham acted for Petronas and senior federal counsel Suzana Atan and Shamsul Bolhassan appeared for the federal government. — Bernama