By DayakDaily Team
KUALA LUMPUR, Jan 28: The High Court has granted an interim injunction in favour of Shell MDS (Malaysia) Sdn Bhd (SMDS), temporarily suspending payment obligations for natural gas supplies in Bintulu.
The decision comes amid an ongoing legal dispute between Petroliam Nasional Berhad (PETRONAS) and Petroleum Sarawak Berhad (Petros), New Straits Times reported.
Judicial Commissioner Arziah Mohamed Apandi, in her ruling, stated that the injunction would maintain the status quo, enabling SMDS to continue operations without disruption while the court resolves the conflict between the two entities.
The dispute arose after SMDS found itself caught between two conflicting gas supply agreements (GSAs) — one signed with PETRONAS on July 17, 2020, and another with Petros on August 16, 2024.
SMDS argued that the conflicting agreements put the company at risk of double payments and potential operational disruptions at its Bintulu facility.
At the heart of the legal battle is a jurisdictional clash between federal and state laws — the Petroleum Development Act 1974 (PDA 1974), which grants PETRONAS exclusive rights over petroleum operations nationwide, and Sarawak’s Distribution of Gas Ordinance 2016 (DGO 2016) and its 2023 amendment, which designates Petros as the State’s sole gas aggregator.
SMDS sought the court’s intervention to restrain both PETRONAS and Petros from disrupting the gas supply or enforcing payment demands until a determination is made on the rightful recipient of payment under the interpleader proceedings.
The company also raised concerns about potential criminal liability under DGO 2016 if payments were made to the wrong party.
In her Jan 6 written judgment, Arziah noted that SMDS had demonstrated an exceptionally strong case for the court to intervene.
She explained that the balance of convenience supports the injunction, as it prevents irreparable harm to SMDS, avoids double payments, and ensures compliance with legal requirements while safeguarding the interests of all parties.
Arziah added that PETRONAS was aware of SMDS’s predicament, including the issuance of invoices by Petros for the gas supply.
She also noted that recent media statements by government officials suggest progress toward resolving the underlying dispute. – DayakDaily
