The Kelantan government's suit against Petroliam Nasional Bhd (Petronas) over oil royalty will be tried at the New Civil High Court (NCvC), after all.

This follows the NCvC rejecting the state government's application for the suit to be transferred back to the New Commercial Court (NCC).

The state government wanted the case to be transferred back as the suit was initially filed at NCC, but it will now be heard at NCvC.

Judge Zabariah Mohd Yusof made the decision upon hearing submissions from both parties in chambers.

Counsel Tommy Thomas represented the Kelantan government, Cecil Abraham and Rishwant Singh appeared for Petronas while senior federal counsel Azizah Nawawi, of the Attorney-General's Chambers, appeared for the federal government.

Rishwant told reporters the judge had refused to transfer back the case as it had been transferred to the civil division to hear the matter.

He said the judge held that the transfer matter was a court administrative matter, without any application by the parties.

To a question, he said the Civil High Court and Commercial High Court held the same powers.

Rishwant said Petronas and the federal government would be filing an application to try the preliminary issues on a point of law, for the court to determine the issues before proceeding with the hearing, adding that the state government had also filed for discovery of documents pertaining to the suit.

He said the court set April 21 for mention of the suit.

On March 2, Zabariah granted the federal goverment's application to be an intervener and to be named as the second defendant in the suit.

In the suit filed on Aug 30, last year, the state government named Petronas as the sole defendant for alleged breach of contract relating to cash payments payable to the state over oil revenue.

In the statement of claim, the state government among others, is seeking an order to compel Petronas to make full and truthful disclosure of all facts relating to cash payments payable to Kelantan, including for the period when petroleum was produced, found or obtained off the coast of Kelantan; areas or blocks from where petroleum was found and obtained; and the total sum of cash payments that should be paid to Kelantan.

The state government also demanded that all outstanding cash payments determined by the court must be paid within one month of the court order.

In addition, Kelantan is also seeking an order that all future cash payments for petroleum produced off its coast, as stipulated in the petroleum agreement, shall be paid to the state by Petronas.

In the suit, the state government explained that the Kelantan petroleum agreement signed on May 9, 1975 clearly stated that Petronas should pay in cash five per cent of oil revenue, either from exploration onshore or offshore.

It said that a clause of the agreement stated that the payment should be made in cash twice a year on or before March 1, or on or before Sept 1.

The state government also said that clause 3 of the agreement stated that the payment should continue until the oil deposit obtained from the state had been exhausted.

- Bernama