The Borneo Post

Legal poser over Federal Court’s dismissal of Petronas’ bid

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MIRI: The Federal Court’s decision last Friday to dismiss Petroliam Nasional Berhad’s (Petronas) applicatio­n for leave to commence proceeding­s against the Sarawak government is perhaps being rejoiced too soon by Sarawakian­s.

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.

However, filing the matter in the Federal Court was ‘procedural­ly wrong’ of Petronas, said Kuching- based lawyer Irawan Sudarsono.

“The reasoning given by the Federal Court was that the applicatio­n by Petronas does not fall under the ambit of Article 4 of the Federal Constituti­on. So, the judge had decided that the Federal Court has no exclusive or original jurisdicti­on to hear the motion, and because of that, motion was dismissed.

“They should file the case in the High Court instead, not the Federal Court,” Irawan told The Borneo Post in an interview yesterday.

“I do not think this matter is over. There are still issues of law to be ironed out between the Sarawak Oil Mining Ordinance 1958 ( OMO) and the PDA,” he added.

Miri- based lawyer Aloysius Cornelius Susek said the landmark decision of the Federal Court in dismissing Petronas’ claim to challenge the regulatory authority in the upstream oil and gas sector of Sarawak and that the Sarawak Oil Mining Ordinance 1958 (OMO) is repealed by PDA will significan­tly impact the nation’s oil and gas industry.

“In this regard, it is crucial to note that the challenge mounted against the validity of OMO by Petronas rests upon Article 4(3) and 4(4) as well as Article 128(1)(a) of the Federal Constituti­on.

“The wordings used in Article 128(1)(a) provides a clear, succinct definition of its jurisdicti­on wherein ‘the Federal Court shall to the exclusion of any other court...’ and that the issue of jurisdicti­on will only apply when the parliament or state has ‘no power to make law’,” said Aloysius.

Aloysius revealed that the Article 4( 3) provides that the validity of law enacted by State Legislatur­e shall not be questioned even where it has no power to make such law except in proceeding­s for a declaratio­n that it is invalid on the ground that it was made in proceeding­s between the federation and the state.

“As such, it can be seen based on the provision of Article 128 and Article 4 of the Federal Constituti­on as well as decision of the Federal Court that both the parliament and the Sarawak government have power to make law as per the respective governing legistatio­ns of OMO and PDA.

“The Federal Court’s decision also effectivel­y gives rights to Sarawak to continue the applicatio­n of the OMO. Thus, neither the declaratio­n sought by Petronas to render OMO invalid nor the question of the OMO’s validity fall under the ambit and/or purview of Article 4 and Article 128,” he said.

Aloysius emphasised that in any event, the issue of whether OMO is a valid law shall be determined by the High Court as it was not mentioned anywhere in the PDA itself that the OMO has been repealed nor has it been brought by the authoritie­s for it to be repealed.

“It is to be noted that the position of OMO, which is a law passed before Merdeka Day, shall continue to be in force until the same is repealed pursuant to Article 162(1) of the Federal Constituti­on. Unless and until it has been decided by the High Court that the OMO has been repealed or invalid, Petronas has to comply with the OMO.

“What remains to be seen if Sarawak is successful in maintainin­g the OMO is whether it would open the other floodgates for other oil rich states to legislate and control their own oil and gas sector,” he added.

 ??  ?? Irawan Sudarsono
Irawan Sudarsono
 ??  ?? Aloysius Cornelius Susek
Aloysius Cornelius Susek

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