Arifin Zakaria J:

[1] The plaintiff is the Government of the State of Terengganu, one of the component states of the Federation of Malaysia. The first defendant is a body corporate incorporated under the Companies Act 1965 and conferred with the rights, powers, privileges and liberties set out in the Petroleum Development Act 1974 ('PDA'). The second defendant is the Government of Malaysia. The PDA came into force on 1 October 1974, s 2 which provides:

(1) The entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia shall be vested in a Corporation to be incorporated under the Companies Act, 1965 or under the law relating to incorporation of companies.

(2) The vesting of the ownership, rights, powers, liberties, and privileges referred to in sub-s (1) shall take effect on the execution of an instrument in the form contained in the Schedule to this Act.

(3) The ownership and the exclusive rights, powers, liberties and privileges so vested shall be irrevocable and shall enure for the benefit of the Corporation and its successor.

[2] On the 22 July 1975, the vesting instrument was signed by the then Menteri Besar of the plaintiff, vesting on the first defendant the ownership, rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum. On the same date, an agreement was entered into between the plaintiff and the first defendant whereby it was agreed that in consideration of the vesting instrument granted by the plaintiff to the first defendant, the first defendant shall make cash payments in the form of a yearly sum amounting to the equivalent of 5% of the value of petroleum won and saved in the State of Terengganu and sold by the first defendant, its agents or contractors. Accordingly, payments were made by the first defendant to the plaintiff from the year 1978 until March 2000, when the first defendant ceased to make such payment.

[3] The plaintiff brought this action against both the first and second defendants based on several causes of action as set out in the statement of claim wherein the plaintiff seeks the following reliefs, namely:

(a) As against the first defendant:

(i) specific performance of the principal and supplementary agreements;

(ii) an order that the first defendant pays within 14 days of an order of this court to the plaintiff the cash payments due and payable on 1 September 2000 and at future dates in accordance with the terms of the principal and supplementary agreements;

(iii) damages for breach of contract; and

(iv) general damages.

(b) As against the second defendant:

(i) general damages;

(ii) aggravated damages; and

(iii) exemplary damages.

(c) As against both defendants:

(i) interest on all sums ordered to be paid at such rate and for such period as the courts deems fit;

(ii) costs; and

(iii) further or other reliefs.

[4] After the close of pleadings, the first and second defendants respectively filed the summons in chambers ('SIC') (encll (4) and (6) respectively) seeking leave of this court for the determination of several preliminary issues of the law under o 14A and/or o 33 of the Rules of the High 1980 ('the RHC').

[5] The proposed questions or issues of law as formulated by the first defendant are found in Appendix I to their SIC which for ease of reference are reproduced below:

PROPOSED QUESTIONS OR ISSUES OF LAW

1 Did the plaintiff have any rights over petroleum won and saved in the 'continental shelf' (as defined in the Continental Shelf Act 1966 ('CSA') (hereinafter 'Continental Shelf') off the plaintiff s coast up and just prior to:

(i) the enactment of the Petroleum Development Act 1974 ('PDA')?

(ii) the execution of the Agreement dated 22 March 1975 between the plaintiff and the first defendant?

2 Did the plaintiff vest any rights to petroleum won and saved in the Continental Shelf off the plaintiff's coast in the first defendant vide:

(i) the 'Ves