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Kelantan Wants To Include 14 Questions In Oil Royalty Suit

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KUALA LUMPUR: The Kelantan Government has sought the High Court to include 14 questions and issues of law in the hearing of its suit against Petroliam Nasional Berhad (Petronas) for alleged breach of contract over its oil royalty.

Among others, the questions involve what rights the state government possesses over petroleum onshore and offshore Kelantan, prior to the coming into force of the Petroleum Development Act 1974 on Oct 1, 1974 and the execution of the Kelantan Agreement and Kelantan Grant on May 9, 1975.

The other issues were, whether by refusing to pay cash payments to Kelantan although converting petroleum won and obtained offshore Kelantan without paying for them, Petronas had acted in breach of Article 13 of the Federal Constitution.

High Court Judge Datuk Rosnaini Saub fixed April 10 to give the decision on the application by the state government, saying that she needed time to go through the submissions by counsel Tommy Thomas representing the Kelantan Government. Tan Sri Cecil Abraham acted for Petronas while senior federal counsel Suzana Atan appeared for the government.

Petronas and the government have proposed nine questions and issues of law and the court will hear the questions during the hearing which will be fixed later.Rosnaini had asked the parties to discuss the date of the hearing and informed the proposed date to the court on that day (April 10).

On July 2, last year, the Federal Court had ordered the suit would 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.

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.

The apex court made the ruling after dismissing the Kelantan Government’s appeal against the Court of Appeal ruling on April 26, 2012, which upheld the High Court’s decision directing that the civil suit be summarily decided on points of law.

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 also sought 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. — BERNAMA

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