Judicial commissioner Faridz Gohim Abdullah ruled that Petronas’s demand on the bank guarantee, related to gas supply, was in accordance with its terms, The Borneo Post reported.

In his judgment, Faridz held that the bank guarantee was unconditional and could be invoked through a written demand, without the need to first prove any breach of contract.

The court also noted that the sum had already been received and utilised by Petronas, rendering Petros’s injunction application to restrain its use academic.

The dispute arose after Petronas called on the bank guarantee following Petros’s alleged failure to settle payment for gas supplies in August 2024.

Petros argued that Petronas did not possess a valid licence under the Distribution of Gas Ordinance 2016 to supply gas in Sarawak.

Petronas, however, maintained that it operates under the Petroleum Development Act 1974, a federal law which it contended prevails over state law in the event of any inconsistency.

However, the court ruled that issues concerning overlaps between federal and state laws, including questions of legislative validity, fall within the exclusive original jurisdiction of the Federal Court and could not be determined in these proceedings.

Petros was represented by Cecil Abraham, Sim Hui Chuang, Lim Lip Tze and Rosalie Tien, while Petronas was represented by Cyrus Das, Khoo Guan Huat and Alex Ngu.

Sarawak state legal counsel JC Fong appeared as an observer on behalf of the state government.

Petros had sought to restrain Petronas from utilising the RM7.95 million received under the bank guarantee, which was provided in relation to the gas supply agreement.

Petros contended that Petronas’s demand under the bank guarantee was “unconscionable” or “unlawful”.