PUTRAJAYA — The Federal Court today allowed Petroliam National Bhd’s (Petronas) application for leave to commence proceedings to challenge the validity of several Sarawak ordinances governing oil and gas matters in the state.
Chief Judge of Malaya Datuk Seri Hashim Hamzah, sitting as a single judge, said he is satisfied that Petronas met the threshold for leave to be granted and that the case will be argued and ventilated before the Federal Court in its original jurisdiction.
He said that after hearing submissions from parties, it showed that there are arguable cases and that it is not frivolous or an abuse of court process.
“The applicant is given leave to commence the said proceeding within 21 days from today,” he said.
In January this year, Petronas filed a motion for leave to commence proceedings against the Sarawak state government under Article 4 (3), 4 (4), and 128 (1) of the Federal Constitution by way of a petition.
The national oil and gas company is challenging the legislative competency of the Sarawak State Legislature to enact certain laws and to declare several laws made by the Sarawak State Legislature invalid.
Some of the provisions include Sections 7, 7A and 8 of the Sarawak Distribution of Gas Ordinance 2016, Section 3 of the Sarawak Interpretation Ordinance 2005, Section 2 of the Sarawak Oil Mining Ordinance 1958, Section 2 of the Sarawak National Parks and Nature Reserves Ordinance 1998 and Section 2 of the Sarawak Land Code 1958.
It claimed that the Sarawak State Legislature lacked the competence to enact, modify, amend or revise law with respect to matters under List 1 of the Federal List in the Ninth Schedule of the Federal Constitution.
In today’s proceedings before the Federal Court, lawyers for Petronas, Datuk Dr Cyrus Das and Khoo Guan Huat, respectively, submitted that the company has an arguable case that the Sarawak State Legislature lacked the requisite legislative competence to enact the impugned laws.
Das argued that the legislative competence of the Sarawak State Legislature under the Borneo States (Legislative Powers) Ordinance 1963, read with Article 95C of the Federal Constitution, is limited to the distribution of gas within the state and does not extend to other activities or aspects of the petroleum lifecycle.
Das said any law purporting to implement or having the effect of implementing international treaties, conventions, or agreements would conflict with Article 76 of the Federal Constitution.
The Sarawak State Attorney-General, Datuk Sri Saferi Ali, objected to the application, saying that Petronas has failed to meet the threshold of presenting an arguable case.
Meanwhile, Sarawak State Legal Counsel Datuk Sri J.C. Fong argued that the leave application should be dismissed as the state did not encroach on Federal powers.
He added that the grounds in the leave application are insufficient to show an arguable case, and the leave application was frivolous.
Senior Federal Counsel Ahmad Hanir Hambaly@Arwi, appearing for the Federal Government, told the court that the Federal Government is not opposed to Petronas’s leave application.
He added that the grounds for Petronas’ challenge have met the threshold for leave under Article 4 (4) of the Federal Constitution and that there was an arguable case that merited further hearing of the issues. – March 16, 2026