Appellate court rules Petronas not in breach, orders Shell to pay

The Court of Appeal overturned a High Court injunction that forced Petroliam Nasional Berhad (Petronas) to keep supplying natural gas to Shell MDS (Malaysia) Sdn Bhd without payment.

Judge Wong Kian Kheong said High Court judicial commissioner Arziah Apandi failed to consider Section 53 of the Specific Relief Act 1950, which requires Shell MDS to prove Petronas breached a signed agreement.

“In this case, the agreement between Petronas and Shell MDS had not been breached. On the contrary, Petronas had complied with the agreement at all material times.

“We are not satisfied that the first respondent (Shell MDS) had satisfied the high threshold of an ‘unusually strong and clear’ case against the appellant (Petronas) which could justify the High Court to grant the injunction,” he added.

Wong also said that Petronas continues to be deprived of substantial payments of about RM80 million a month since the High Court’s ad interim mandatory injunction on Dec 19, 2024.

On Monday (Sept 22), the Court of Appeal three-member bench, comprising judges Azimah Omar, Ismail Brahim, and Wong, allowed Petronas’ appeal to set aside the interim injunction obtained by Shell MDS.

The injunction allowed Shell MDS to stop monthly payments for gas supplied by Petronas to Shell MDS at its Bintulu facility in Sarawak.

The bench, led by Azimah, also ordered Shell MDS to pay Petronas the outstanding amounts owed from August 2024 until Oct 5 this year, with payment due by Oct 6.

Shell MDS had withheld payment due to concerns over receiving two invoices – one from Petronas and another from Petroleum Sarawak (Petros).

Shell MDS feared it might have to make double payments while the jurisdictional dispute between Petronas and Petros was being resolved.

- Bernama

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