PUTRAJAYA (Oct 1): A Federal Court judge has decided that only a full bench can decide on a preliminary issue raised by the Sarawak government in the dispute with PETRONAS over who has control over the oil in the state.   

Federal Court judge Datuk Rhodzariah Bujang on Thursday declined to make a ruling on the hearing of the preliminary issue, saying that the full Federal Court bench that will hear the separate PETRONAS and Sarawak government petitions should decide on the matter. The full bench hearing is scheduled for Jan 25 next year.

Sarawak wants the preliminary issue of the legality of the colonial-era Order In Council 1954 (OIC) law to be heard before PETRONAS' petition about the competence of 10 Sarawak laws. The state government asserts that the OIC extends Sarawak's maritime borders beyond what is set in federal law and includes the continental shelf.

The legal wrangle over who has control over oil found in Sarawak was sparked by the founding of state oil company Petros in 2016. Earlier this year, PETRONAS filed its petition to challenge the competency of 10 Sarawak laws on Jan 12, while Sarawak filed its challenge on three federal laws on Feb 23.

Rhodzariah on Thursday said it would be improper for her to decide on the preliminary issue as the two cases are not consolidated, and the full bench might rule differently than her.  

However, Rhodzariah ruled that with regard to the submission of substantive arguments (the main matter of the case), based on the sequence of the filing of the petitions, PETRONAS would orally submit the issues raised in its petition first, and Sarawak after that.

“This is based on the normal practice that the first petition filed first would be heard first, and subsequently the other. The fact that PETRONAS obtained leave (permission) from the Federal Court only on March 16 was not a consideration,” she ruled after a short 20-minute recess.

The judge also asked parties (PETRONAS, the Sarawak government, and the federal government) to write in their applications to Chief Justice Tun Wan Ahmad Farid Wan Salleh, as they sought a panel of nine to 11 judges at the apex court constitutional hearing scheduled for five days beginning Jan 25 next year.

A Federal Court bench usually comprises three or five judges. A full bench is convened for cases of extraordinary weight.

Datuk Dr Cyrus Das appearing for PETRONAS, senior federal counsel Ahmad Hanir Hambaly @ Arwi, and Sarawak senior state counsel Mohd Adzrul Azlan indicated they would do so.

Mohd Adzrul told the court that Sarawak would possibly indicate one or two judges who should not hear the matter.

It is to be noted that besides the top-four judges — the Chief Justice, President of the Court of Appeal Datuk Seri Abu Bakar Jais, Chief Judge of Malaya Datuk Seri Hashim Hamzah, and Chief Judge of Sabah and Sarawak Datuk Azizah Nawawi — there are 11 other apex court judges.

PETRONAS is challenging the competency of the Sarawak assembly in enacting 10 laws which it says encroaches on federal government powers as set out in the Constitution's the Federal List.

Chief among them is the OIC law, which extends Sarawak’s offshore borders beyond what is set by the federal government and international treaties. The OIC sets Sarawak’s offshore border to beyond three nautical miles from its shores and  includes its continental shelf. The other state legislations being challenged by PETRONAS include the Environment (Reduction of Greenhouse Gas Emission) Ordinance 2023 and the Sarawak Oil Mining Ordinance 1958.

Meanwhile, Sarawak is challenges three federal laws: the Petroleum Development Act 1974, the Continental Shelf Act 1966 and the Petroleum Mining Act 1966.

Last week, parties indicated before Rhodzariah that they want their petitions to be heard separately and not be consolidated, but they do not agree on the sequence. The parties indicated that they do not mind the same judges hearing the petitions.

On Thursday, parties indicated before Rhodzariah that they still disagree on which petition should be heard first.

Cyrus said PETRONAS’ petition should be first because it was filed first.  

The senior lawyer said that since the Sarawak government had raised the OIC law in its defence, this indicates that it is a pre-emptive move by the state for it to be heard at the outset.

“This court should not entertain such pre-emptive moves. Furthermore, the Federal Government is supporting PETRONAS that the company should submit first,” he said.

Mohd Adzrul told Rhodzariah that since the OIC is central to PETRONAS’ argument, thus by ease of reference, the Sarawak petition should be heard first.

“It is important to note that the OIC was never revoked or amended, and remains a part of the state law. There is a need for the apex court to decide the status of the OIC. Our petition should take precedence, because the dispute is between the state and the federal government as a party.

“The court would have to decide whether it has original jurisdiction to touch on the OIC. This is the reason why we say the Sarawak government should be allowed to submit first, so that the submissions could be dealt with in a structured manner,” he said.

Ahmad Hanir said the federal government supports PETRONAS’ application to submit first, as this a federal-state dispute and there is no need for the apex court to hear or decide on the preliminary issue.

Following Rhodzariah’s decision on not deciding on Sarawak's preliminary issue, Mohd Adzrul said the state would apply for it be heard first.

“The application will be filed within 14 days from today (Thursday),” he said, adding that they would file their written submissions in accordance with the agreed directions on Jan 11, and reply on Jan 18.

Besides Das, Khoo Guan Huat, Datuk Azian Abd Aziz, Grace Teoh Wei Shan, Ahmad Faiz Razali, Khoo Yuan Ping and Alex Ngu appeared for PETRONAS.

For Sarawak, besides Mohd Adzrul, the state is represented by Sarawak counsel Richard Tie Sing Wan and Felicity Sharmela Thomas.

In addition to Ahmad Hanir, federal counsel Imtiyaz Wizni Aufa Othman represented the federal government. 

Read also:
Sarawak, PETRONAS seek separate hearings on oil and gas petitions; January tentatively set
Apex court grants PETRONAS leave to challenge Sarawak state laws
Sarawak govt files apex court petition to challenge federal laws on petroleum rights
PETRONAS gets apex court to decide legal position for ops in Sarawak