Federal Court dismisses Petronas’ application against Sarawak government, fight not over as case may be brought before High Court
PUTRAJAYA: The Federal Court yesterday dismissed Petroliam Nasional Bhd’s (Petronas) application for leave to commence proceedings against the Sarawak government.
The Federal Court’s decision comes just days before the Sarawak government begins regulating upstream petroleum activities on July 1.
Chief Minister Datuk Patinggi Abang Johari Tun Openg was among the first to welcome the decision and express his happiness not long after the court decision was reached.
“Syukur Alhamdulilah’ (Praise be to God). Sarawakians have just won in court today. Thank you so much to our legal team and let us all pray for the best in moving forward,” he said on Facebook.
A few hours later he posted his visit to the grave of his predecessor the late Pehin Sri Adenan Satem, saying he would continue Tok Nan’s struggles to work for a better Sarawak no matter what obstacles may come.
Despite the Federal Court’s decision, the fight may not be over yet as Chief Judge of Malaya Tan Sri Wira Ahmad Ma’arop said the application by Petronas could still be heard in the High Court.
He had earlier dismissed the application after saying that it did not fall under Article 4(3) and 4(4) of the Federal Constitution, where it did not seek to declare the Sarawak Oil Mining Ordinance (OMO) 1958 as invalid.
After hearing arguments from both parties, Ahmad said he was satisfied that the Sarawak legal counsel team had proven its case and awarded RM50,000 in costs to the Sarawak government.
“The Sarawak state government also did not say that the Petroleum Development Act (PDA) 1974 did not go against the Ordinance. Hence, Petronas’ motion for the matter to be heard at this court (Federal Court) on its substantive is dismissed.
“The application by Petronas can be heard at the High Court,” he added.
The hearing of the landmark case was supposed to have been on June 12, but was postponed as the federal government’s Attorney General’s Chamber (AGC) decided to participate and required more time to look into the case.
Senior federal counsel Shamsul Bolhassan was in attendance, holding a watching brief on behalf of the AGC, which would have been party to the case if the leave was granted.
Petronas had filed an application for leave to commence proceedings under Article 4 (4) of the Federal Constitution, seeking a declaration that the Petroleum Development Act 1974 (PDA) applied with regards to the regulatory control of upstream activities in Sarawak.
The company also sought the court to declare that the OMO 1958 was impliedly repealed by the PDA.
Petronas is seeking a declaration that the PDA was duly enacted by Parliament and stated that Petronas is the exclusive regulatory authority for the upstream industry throughout Malaysia, including in Sarawak.
On Thursday, the court heard arguments from both Petronas and the Sarawak government with regard to Petronas’ legal standing to file the application for leave to commence proceedings in the Federal Court to determine the matters raised by the company.
Datuk JC Fong, who represented the Sarawak government, said this case is not about challenging the constitutional power of Parliament in making or changing the law in Sarawak’s upstream oil and gas activities.
“This issue is not within the power of Federal Court to decide. It is a matter of judicial interpretation by the High Court. Secondly, the Oil Mining Ordinance 1958 (OMO) is a law passed by the state before Malaysia Day.
“After Malaysia Day, that ordinance remains good law and applies only to Sarawak.
“Thirdly, OMO is not about oil and oilfields, it is about regulating the exploration, exploitation and mining of petroleum on land in Sarawak, and the OMO covers all these activities on shore or continental shelf. In this case, we are of the view that Petronas has to comply with state laws, particularly the OMO and Sarawak Land Code,” he explained.
Meanwhile, Petronas legal counsel Datuk Malik Imtiaz said any question over what law applies over the regulation of petroleum activities in Sarawak is said to be still ‘alive’ and has not been put to rest by the Federal Court’s decision.
Speaking to reporters, he noted the top court’s decision only meant that it felt the national oil company’s case does not fall under its jurisdiction and can be heard in the High Court instead.
“It just means that the Federal Court has said, in the form that we came, it didn’t think it was within the jurisdiction of this court.
“So the issue is still very much alive, not been decided in anyway,” he said.
Malik said the Federal Court had only decided on a procedural matter on whether it will allow Petronas’ legal challenge to start and be heard, and had not ventured into the substantial issues of the legal dispute between Petronas and the Sarawak government.
“Merits haven’t been decided. There’s no merits decided. This doesn’t mean the PDA is invalid, it doesn’t mean the OMO is valid,” he said, referring to some of the main issues in the case.
When asked if Petronas would file a fresh challenge in the High Court or what its options are now, Malik said he will have to take instructions from his client.
“We have to consider what the court said just now, because the Sarawak government’s argument was because we didn’t ask for a specific type of declaration in that particular language and that was what the court seemed to have agreed today.
“This is something new, a precedent has been set,” he said.
“According to the judge, if we want those particular reliefs, we can file in the High Court,” he said, but reiterated that he will have to seek Petronas’ instructions on its next step.
When contacted, analyst Prof James Chin said the Sarawak government can argue that if Petronas were to file the challenge again, it must be filed in Kuching and not Kuala Lumpur.
“If Petronas filed in Kuching, then the documents from London, if presented by the Sarawak side, will be judged by the courts.
“This will be the first time a document related to the formation of Malaysia will be judged so that will be a very good thing,” said Chin, who is director of the Asia Institute Tasmania, University of Tasmania.
Chin was referring to documents obtained during a fact finding mission on the Malaysia Agreement 1963 by Sarawak government to London last year.