The breach of contract suit filed by the Terengganu state government against Petroleum Nasional Berhad (Petronas) and the federal government must be resolved by a full trial to address the critical issue of oil royalty payment.

Counsel for Terengganu, Tommy Thomas said the dominant issue is why did Petronas and the federal government changed their minds after making a total of 45 oil royalty payments over a 22-year period.

"This is the critical issue that needs to be addressed by the court and not the ones identified by the appellants (Petronas and government) who claimed that the dominant issue involved the state's right over petroleum," he said.