High Court grants Petronas subsidiaries leave application for judicial review over Sarawak gas licences

KUCHING (Feb 6): The High Court here has allowed an application for leave to commence judicial review (JR) by five subsidiaries of Petroliam Nasional Berhad (Petronas) against the Sarawak Ministry of Utility and Telecommunication and the State Director of Gas Distribution.

The case stemmed from penalties totalling RM120 million imposed on Malaysia LNG Sdn Bhd, Malaysia LNG Dua Sdn Bhd, Malaysia LNG Tiga Sdn Bhd, Petronas Carigali Sdn Bhd and Petronas LNG 9 Sdn Bhd for allegedly failing to apply for eight licences to operate in Sarawak, as required under Section 7 of the Distribution of Gas Ordinance (DGO) 2016.

Judicial Dean Wayne Daly ruled that the five applicants had arguable cases with merits to be heard at the substantive stage, and that their JR applications were neither frivolous nor vexatious.

Dean Wayne then fixed March 2 for pre-trial case management basically to fix dates of hearing, and the applicants were also ordered to submit their substantive submissions.

On Jan 21 hearing for the leave application, the applicants’ legal team, comprising lawyers Khoo Guan Huat and Alex Ngu Sze Shae, argued that the DGO 2016 does not apply to the subsidiaries’ operations.

They also argued that the financial penalties were ultra vires the DGO 2016 and that the Sarawak State Legislature (DUN) had exceeded powers conferred by the Borneo State (Legislative Powers) Order 1963 by requiring licences for the treatment, processing, separation, and transportation of gas, as well as the building and maintenance of gas pipelines.

He also contended that the companies, being subsidiaries and operating arms of Petronas, should be regulated under the Petroleum Development Act (PDA) 1974, a federal law, rather than the state-level DGO 2016.

The respondents today were represented by Sarawak Legal Counsel Dato Sri JC Fong and State Senior Counsel Mohd Adzrul Adzlan from the State Attorney-General’s Chambers.

When contacted, Fong clarified that the respondents do not intend to appeal as the court did not grant a stay of proceedings to enforce the penalties of RM120 million imposed on the five companies.

Senior Federal Counsel Ahmad Hanir Hambaly appeared for the Federal Attorney-General’s Chambers.

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