The suit seeks to restrain Petronas from utilising funds of RM7.95 million received under a bank guarantee previously given by Petros in respect of the supply of gas. Petros contends that Petronas’s demand for payment under the bank guarantee was “unconscionable” or “unlawful”.
Petronas, however, wants to stay the lawsuit until the Kuala Lumpur High Court disposes of a related case brought by Shell MDS (M) Sdn Bhd against both Petronas and Petros. Shell MDS’s suit seeks to determine which of the two oil companies ought to receive payment for the supply of gas.
On Wednesday, the Kuching court allowed applications by both the federal and Sarawak governments to participate in the proceedings before it as amici curiae (friends of the court), according to Utusan Borneo.
Judicial Commissioner Faridz Gohim Abdullah also deferred the substantive hearing of Petros’s lawsuit and allowed both governments until April 30 to file written submissions to address the various constitutional and legal issues involved.
Faridz also said he would hear Petronas’s stay application before setting a hearing date for the case proper.
Petronas was represented in the proceedings by Alex Ngu, while Sim Hui Chuang appeared for Petros. Former Sarawak attorney-general JC Fong appeared for the state government, and senior federal counsel Ahmad Hanir Hambaly appeared for the federal government.
Petros appeals for interim injunction
Meanwhile, Petros has an appeal pending in the Court of Appeal over Faridz’s refusal to injunct Petronas from receiving funds under the bank guarantee in October last year.
Faridz had ruled that Petros’s injunction application had become “redundant” as Maybank Islamic Berhad had already paid Petronas on the guarantee.
Petros filed its suit against Petronas on Oct 15, 2024.
The Sarawak state-owned oil company simultaneously sought an ex-parte interim injunction to restrain Petronas from pursuing the payment and receiving monies under the bank guarantee.
On Oct 21, Faridz dismissed the application, saying there was no need for him to go into the merits of Petros’s claim as the injunction application had been “superseded by events”.
He said that by the time Petros’s ex-parte application came up for hearing on Oct 18, Maybank had already paid the funds over to Petronas.
“In light of this fact, I am of the view that the request to restrain the defendant (Petronas) from further pursuing or receiving payment of the bank guarantee becomes redundant,” Faridz said in a written judgment dated Jan 14.
Faridz also said Petros’s application to restrain Petronas from utilising the funds received was without merit.
“I find it unreasonable to grant such an order. How could the money (received under the bank guarantee) be segregated from the defendant’s other funds? Even if it could be done, it would not serve the purpose of maintaining the plaintiff’s financial position as it was prior to the release of the bank guarantee.
“Furthermore, I am inclined to agree with the defendant’s counsel that, as a large corporation, the defendant has no reason why it could not repay the amount of the bank guarantee or the money it has utilised if so ordered by the court,” he said.
Petros had procured the bank guarantee for RM7,955,208.28 dated Dec 29, 2023 in compliance with the terms of the Sarawak Gas Sales Agreement (SGSA) entered into with Petronas.
The guarantee was to remain valid from Jan 1 to Dec 31, 2024.
On Sept 11 last year, Petronas demanded payment of RM17,421,155.95 from Petros for gas supplied under the SGSA and another gas supply agreement.
Petronas later issued a second letter to Petros dated Oct 4, 2024 requesting payment of RM28,136,403.08.
On Oct 14, 2024, Maybank notified Petros that Petronas had made a call on the bank guarantee, which the bank said it intended to honour.
At the hearing, Petros had argued that it was necessary to restrain Petronas from utilising the funds until the court determines whether the call for payment was wrongful. However, Faridz was not persuaded that the injunction was necessary.
“It is my view that no serious questions remain to be tried at this stage of the proceedings,” the judgment read.
He also ruled that the balance of convenience favoured Petronas and dismissed the application for an interim injunction with costs.