Rights and obligations regarding offshore petroleum ownership under the Petroleum Development Act affirmed as questions of law suitable for determination without a full trial.

[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 value of the petroleum won and saved onshore and offshore Kelantan and sold by Petronas, its agents or contractors. The Kelantan Petroleum Agreement was executed pursuant to the provisions of ss 2 and 4 of the PDA .

[3] In consideration of Petronas agreeing to make cash payments to the plaintiff under the Kelantan Petroleum Agreement, the plaintiff granted in perpetuity,conveyed to and vested in Petronas, the ownership in and the exclusive rights,powers, liberties and privileges of exploring, winning and obtaining petroleum whether lying on-shore or off-shore Kelantan (the Kelantan Grant).

[4] The Kelantan Grant was executed in writing on 9 May 1975, which grant was accepted, also in writing, by Petronas. The Kelantan Grant was executed in the form provided by the schedule and pursuant to the provisions of ss 2 and 4 of the PDA , and represented the Vesting Deed referred to in the .The grant, conveyance and vesting were declared in the Kelantan Grant to be irrevocable.

[5] It was alleged by the plaintiff in its statement of claim that, in total failure of its consideration and in breach of its obligations under the PDA , the Kelantan Petroleum Agreement and the Kelantan Grant, Petronas has failed:

(i) To provide any information about its exploration activities in areas off-shore Kelantan;

(ii) To provide any information about the extent of its production of petroleum off-shore Kelantan; and

(iii) To make cash payments in respect of the petroleum won offshore Kelantan.

[6] The plaintiff contends that by virtue of the PDA , the Kelantan Petroleum Agreement and the Kelantan Grant, Petronas is obliged to make cash payments for all petroleum won offshore Kelantan.

[7] By letter dated 31 December 2009, the then Menteri Besar of Kelantan wrote to the President and Chief Executive Officer of Petronas requesting for cash payments to be paid to the Kelantan State for petroleum won offshore Kelantan.

[8] By letters dated 2 February 2010 and 12 April 2010 the President and Chief Executive Officer of Petronas replied stating that the plaintiff was not entitled to receive any cash payments.

[9] The plaintiff filed an action against Petronas at the High court and from its statement of claim, the plaintiff relied on the following causes of action, viz: (i)breach of contract; (ii) unfair discrimination; (iii) breach of arts 8 and 13 of the Federal Constitution; and (iv) estoppel. The plaintiff prays for relief of specific performance and an account be taken or an inquiry be ordered for Petronas to make full and truthful disclosure of all relevant f