Govt remains interverner in Kelantan suit over oil royalty


PUTRAJAYA: The federal government remains an intervener in the suit filed by the Kelantan government against Petroliam Nasional Bhd (Petronas) over a breach of contract of oil royalty.

The suit also maintained it be tried at the New Civil High Court (NCvC), and not in the New Commercial Court (NCC) in which the suit was filed.

The Federal Court’s three-man panel chaired by Tan Sri Zulkefli Ahmad Makinudin, yesterday dismissed the Kelantan government’s leave to appeal against the Court of Appeal’s decision on May 26, this year, which dismissed two of its appeals.

The two appeals concerned the High Court’s ruling allowing the federal government to intervene in the suit and the order of the High Court that the suit be tried at the Civil Court, instead of Commercial Court where the suit was filed originally.

In dismissing the final appeal by the state government, Zulkefli, who presided over the appeal with justices Tan Sri Ghazali Mohd Yusof and Datuk Suriyadi Halim Omar, also ordered the state government to pay RM20,000 in costs to the federal government.

The state government is suing Petronas for allegedly breaching the contract over cash payments payable to Kelantan over oil revenue.

In its statement of claim, the state government demanded that Petronas pay the outstanding and future cash payments for petroleum produced off the Kelantan coast, as set in the petroleum agreement.

At the outset, counsel Tommy Thomas, representing the state government, submittted the federal government should not be made a party to the suit because the state government had no claim against the government.

He also submitted that after the High Court granted the government’s application to be interverner, the government had filed its statement of defence, stating there was no claim against them and that the government was wrongly added as second defendant in the suit.

Senior federal counsel Amarjeet Singh, appearing for the federal government, argued that the federal government be made a party to the suit because petroleum in the continental shelf did not belong to Kelantan, but the federal government.

Petronas was represented by counsels Tan Sri Cecil Abraham and Rishwant Singh. — Bernama