The Federal Court would decide tomorrow if it will grant Petronas' leave application for the court, as the highest court in the country, to determine its case against the Sarawak government over petroleum mining rights in the country.

The national oil and gas company is seeking an apex court ruling on whether the Petroleum Development Act 1974 (PDA) passed by the Parliament grants it exploration and exploiting rights over petroleum onshore or offshore, throughout Malaysia including Sarawak and Sabah.

The Sarawak government today opposed Petronas' application for leave to bring the matter to the Federal Court citing that it should be heard by the High Court instead.

This comes as Petronas counsel Malik Imtiaz Sarwar told the single-member bench of Chief Judge of Malaya Justice Ahmad Ma'arop that the apex court should grant leave, or permission, as his client wanted the court to interpret which legislature- Federation or state - has the power to determine matters pertaining to exploration and exploiting of oil, particularly offshore.

"This follows (that) the Sarawak government for the past 47 years, since the PDA was enacted, had not objected to it until in 2017 whereby by July 1 this year, requires Petronas to register with Petroleum Sarawak Bhd (Petros) for all its exploration and exploitation of gas and oil either upstream or downstream.

"The letter (to Petronas) by the Sarawak attorney-general (Talat Mahmood Abdul Rashid) wants Petronas to comply with Sarawak laws to mine petroleum and gas as, if we do not register with Petronas after July 2018, it would be illegal," he said.

For this reason, Malik (below), who along with lawyer Surendra Ananth, said Petronas sought leave from the apex court for it to determine if the Federal or state legislature had the power to compel the company to do so.

He said Petronas is making the application based on Article 4(4) of the Federal Constitution, in the exercise of the Federal Court's jurisdiction under Articles 4(3) and Article 128 (1) (a) of the Federal Constitution, pertaining to the jurisdiction of the Parliament and of the state.

This comes after Petronas had filed a motion on May 31 this year, naming the Sarawak state government as the sole respondent, seeking a declaration that Petronas is the exclusive owner of petroleum resources and industry regulator throughout Malaysia, including Sarawak.

Petronas sought a declaration that by virtue of Article 74 (1) read with the Ninth Schedule of the Federal Constitution, whereby Parliament has exclusive legislative competence to enact laws pertaining to exploration, exploiting, winning and obtaining of petroleum throughout Malaysia either offshore or on shore.

Consequentially, Petronas also sought a declaration that the PDA duly enacted by the Parliament and that the chairperson and the chief executive of Petronas have exclusive regulatory authority over upstream activity.

The national oil company also sought a declaration that the Sarawak Oil Mining Ordinance 1958 (OMO) was impliedly repealed by the PDA.

Malik said the Federal court, should leave be granted, would also determine which legislative body had the power to regulate such matters.

"Sarawak is not entitled to make the regulation of upstream activities as oil and oil fields does not appear anywhere in the state lists (of the Federal Constitution)," he said. 

S'wak counsel: Federal Court has no jurisdiction 

Countering this, JC Fong, who was also representing the Sarawak government alongside Talat, told Justice Ahmad that Petronas should not be granted leave by the apex court and that the matter should be dealt with at the High Court.

Fong said that Petronas did not pass the threshold for leave to be granted by the apex court, as the declaratory relief sought were not specific towards wanting the OMO to be repealed.

"It is seeking only OMO be implied to be repealed, but it is not challenging the invalidity of the law," he said.

The OMO, Fong (above) said, despite being a pre-Malaysia law, is applicable and had been recognised by several court cases.

He further added that the law made by the Sarawak legislature pertains to proceedings between the Federation and the state and hence the apex court does not have jurisdiction to hear the application for leave.

"OMO is good law as it must be validly passed by colonial legislation. This is accepted as there are some pre-Merdeka laws which had been accepted," he said.

Upon hearing both submissions, Justice Ahmad stated that he would deliver his decision tomorrow morning.

Also in attendance was senior federal counsel Shamsul Bolhassan who was holding a watching brief on behalf of the Attorney-General's Chambers (AGC).

Shamsul said the AGC would be a party in the case if leave was granted.