[1] These three appeals were heard together before this court as the issues were common. The plaintiff who is now the appellant, is the State Government of Kelantan. The 1st defendant (Petronas), now the 1st respondent, is a company incorporated under the Companies Act 1965 and conferred by statute with the rights, powers, privileges and liberties as spelt out in the Petroleum Development Act 1974 ( PDA ) with respect to winning and obtaining petroleum in Malaysia. The 2nd defendant, now the 2nd respondent, is the Federal Government of Malaysia. In this judgment, we shall refer to the parties as they were in the High court. The 1st respondent will be referred to as Petronas.

[2] By an agreement dated 9 May 1975 entered into between the plaintiff and Petronas (the Kelantan Petroleum Agreement), it was agreed that in consideration of the entire ownership in, and the exclusive rights, powers,liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether lying onshore or offshore Kelantan being vested in the Petronas by the plaintiff, Petronas shall make to the plaintiff cash payments in the form of a yearly sum amounting to the equivalent of 5% of the va