KUCHING: The High Court here has granted leave to five PETRONAS subsidiaries to seek a judicial review over RM120mil in financial penalties issued by the Sarawak gas distribution director and state Utility and Telecommunications Minister.
Justice Dean Wayne Daly ruled that there was a substantial case to be argued in the matter.
He also said the application for leave was neither frivolous nor vexatious when handing down his decision on Friday (Feb 6).
However, he did not grant a stay on the imposition of the penalties on the companies.
The court set March 2 for case management.
Malaysia LNG Sdn Bhd, Malaysia LNG Dua Sdn Bhd, Malaysia LNG Tiga Sdn Bhd, PETRONAS Carigali Sdn Bhd and PETRONAS LNG 9 Sdn Bhd had been penalised for failing to apply for licences to operate in Sarawak, a requirement under Section 7 of the state's Distribution of Gas Ordinance (DGO) 2016.
The maximum penalty under Section 21A of the Ordinance is RM20mil per case.
The five subsidiaries were issued a total of eight notices with penalties of RM15mil each for failing to apply for licences.
In an earlier hearing, the applicants' counsel Khoo Guan Huat and Alex Ngu had argued that the DGO does not apply to the subsidiaries’ operations.
Khoo also submitted that the companies, as PETRONAS subsidiaries, should be regulated under the federal Petroleum Development Act 1974.
However, state legal counsel Datuk Seri JC Fong, who appeared for the respondents, argued that the PETRONAS subsidiaries were subject to state laws on the supply and distribution of gas, as a subsidiary was a distinct legal entity from its parent company.
State senior counsel Mohd Adzrul Adzlan from the State Attorney General’s Chambers also appeared for the respondents, while Senior Federal Counsel Ahmad Hanir Hambaly appeared for the Federal Attorney General’s Chambers.
