The Kelantan state government obtained an order from the Court of Appeal here today to stay the High Court's proceedings concerning its breach-of-contract suit against National Petroleum Corporation (Petronas) pending hearing of its (Kelantan government's) application for leave to appeal.

The stay was granted by a three-man panel comprising Justices Zainun Ali, Ramly Ali and Zaharah Ibrahim after counsel Rishwant Singh representing Petronas and Senior Federal Counsel Azizah Nawawi for the federal government did not object to the stay application.

The Kelantan government filed an application to the Federal Court for leave to appeal against an appellate court's decision on May 26 this year which dismissed two of its appeals.

The leave application is scheduled to be heard next month.

The two appeals were concerning the High Court's decision in allowing the federal government to intervene in the suit and the order of the High Court that the civil suit be tried at the New Civil High Court (NCvC) instead of the New Commercial Court (NCC), in which the suit was filed.

The Kelantan state government is suing Petronas for allegedly breaching the contract on cash payable to Kelantan over oil revenue.

In its statement of claim, the state government demanded that Petronas pay the outstanding and future cash payments for petroleum produced off the Kelantan coast as set in the petroleum agreement.

The state government is also seeking damages and costs. However, it did not specify the total amount of the claim sought from Petronas.

In the suit, the state government said that the Kelantan Petroleum Agreement signed on May 9, 1975 clearly stated that Petronas should pay in cash five percent 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 proceedings pending at the High Court were an application by the Kelantan State Government for discovery of documents and an application by Petronas and the federal Government to summarily strike out the suit based on determination of question of law.

- Bernama