updated version The Kuala Lumpur High Court today ruled that the breach of contract suit filed by the Terengganu state government against Petroleum Nasional Berhad (Petronas) and the federal government should be resolved by a full trial.

Justice Ariffin Zakaria, now a Court of Appeal judge, made the ruling after dismissing with costs the application by the federal government and Petronas for a summary judgment seeking the court to decide on the case based solely on documentary evidence without having to go for a full trial.

He said that the Terengganu state government's case would be prejudiced if he was to accept the defendants' (Petronas and the federal government) suggestion to decide the case by just determining certain preliminary legal issues arising from the Terengganu government's statement of claim.

After hearing all arguments by both parties, he said it was not fit and proper to proceed with the case under Order 14 and Order 33 of the Rules of the High Court for a summary judgment.

He also directed that the dispute involving the oil royalty payment agreement between the state and federal governments and Petronas, to proceed with its pre-trial case management. However, no date has been fixed.

The Terengganu government is suing Petronas for failing or refusing to pay RM850 million in cash for petroleum obtained in the first half of 2000.

Tommy Thomas acted for Terengganu, Cecil Abraham for Petronas and senior prosecutor Mary Lim for the federal government. Lim told the press that they will be filing for an appeal.

Former lord president Salleh Abas and Terengganu Deputy Menteri Besar Mustafa Ali were also present in court today.