KUCHING: The High Court yesterday (Feb 25) ruled that a demand by Petroliam Nasional Berhad (PETRONAS) for a RM7.95 million bank guarantee from Petroleum Sarawak Berhad (PETROS) was valid.
In delivering his decision, Datuk Faridz Gohim Abdullah held that PETROS had failed to prove the call on the bank guarantee was either unconscionable or unlawful. As a result, PETROS was ordered to pay RM50,000 in legal costs to PETRONAS.
State legal counsel Datuk Seri JC Fong said the High Court had declined to rule on the constitutional issues raised and instead made a commercial determination.
“The constitutional issue will now be decided by the Federal Court since the High Court declined to decide on it and made a commercial decision,” he said.
Fong urged the public to await proceedings at the Federal Court, which are expected to begin with a leave application on March 16.
Meanwhile, PETRONAS’ lawyer, Datuk Cyrus Das, said the ruling meant the call on the RM7.95 million bank guarantee had been upheld.
“The learned judge also held that PETROS had failed to prove that the call on the bank guarantee was unconscionable or unlawful,” he told reporters after the decision.
On the constitutional issues, the court ruled that these fell outside the scope of the originating summons filed by PETROS. Das said the judge held that the proper forum to determine the constitutionality of the two laws in question — the Petroleum Development Act 1974 (PDA 1974) and the Distribution of Gas Ordinance 2016 (DGO 2016) — is the Federal Court.
He added that PETRONAS will apply for leave on March 16 to refer the constitutional questions to the Federal Court, and that the application is expected to be opposed.
“Basically, the questions on the constitutionality of the two laws — the PDA 1974, which is a federal law, and the DGO 2016, which is a Sarawak law — will be decided in the Federal Court,” he said.
For the record, PETRONAS had called on the bank guarantee after PETROS refused to pay for gas supplied in August 2024, arguing that PETRONAS did not have a valid licence under the Distribution of Gas Ordinance 2016 (DGO) to supply gas in Sarawak.
