Legal poser over Federal Court’s dismissal of Petronas’ bid
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authority in the upstream oil and gas sector of Sarawak and that the Sarawak Oil Mining Ordinance 1958 (OMO) is repealed by PDA will significantly impact the nation’s oil and gas industry.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.