The Court of Appeal will on May 26 hear appeals from the PAS-led Kelantan government on its oil royalty suit against national oil company Petronas.

The appeals concern two decisions of the High Court in Kuala Lumpur, one to include the federal government as an intervener in the suit and the other, not to transfer the case from the new Civil High Court to the new Commercial High Court, where it was originally filed.

Kelantan's suit against Petronas came up for case management today before High Court judge Zabariah Mohd Yusof, at which the Court of Appeal date was made known, and where the federal government also presented points of law on its case.

On March 22, Justice Zabariah allowed the federal government's application for it to be included as an intervener in the suit, making it the second defendant.

A week later, the court dismissed the Kelantan government's application for the case to be transferred back to the commercial court, where it had originally been filed, ruling that it remains before the new civil court.

At today's sitting, Justice Zabariah fixed May 30 for case management, pending the decision by the Court of Appeal on the appeals the Kelantan government filed on April 21 against Justice Zabariah's decisions.

The Kelantan government in its original suit filed before the Commercial High Court on Aug 30 last year said the state is entitled to five percent of the petroleum extracted onshore and offshore, in accordance with the Petroleum Development Act 1974 (PDA).

This is provided for under a provision in the PDA agreement signed between the then Kelantan Menteri Besar Mohamed Nasir and Petronas founding chairperson, Tengku Razaleigh Hamzah.

Terengganu gets RM1 billion in oil royalties

The state is arguing that Petronas is obligated, under the PDA, to make cash payments twice annually on oil extracted from four offshore rigs within Kelantan's waters, which Petronas has denied.

husam musa pas annouce contest of number 2 post 250509 03 Last week, Terengganu menteri besar Ahmad Said said the state received almost RM1 billion in oil royalty payments this year, leading Kelantan senior exco Husam Musa ( right ) to point out that these payments to Terengganu, and not to Kelantan, proved the hypocrisy of Petronas and the federal government.

Husam said both states had signed similar agreements with Petronas more than 30 years ago and while Terengganu has been receiving the oil royalty, Kelantan, from where oil has been extracted since 2005, has not received any payment. Kelantan has been under PAS rule since 1991.

The oil royalty payments to Terengganu were stopped in early 2000, shortly after PAS wrested control of the state from BN in the 1999 general election, and replaced with a "wang ehsan" (compassionate money) scheme administered by the federal government.

Following this, the then PAS-led Terengganu government filed a similar suit against Petronas. However, the BN won Terengganu back in the 2004 general election and the oil royalty payments were resumed.