Mohd Noor Ahmad JCA:

The defendants, by separate applications, applied before the High Court, for certain proposed questions of law to be determined both under O. 14Aand O. 33 r. 2 of the Rules of the High Court 1980(the RHC). The proposed questions, as alleged, arose from the pleadings filed in Civil Suit No. S3-21-99-2001 (the Suit), instituted by the plaintiff against the defendants. The learned High Court judge dismissed the applications. Hence, these appeals.

The plaintiff is the government of a component state of the Federation of Malaysia. The 1st defendant is a body corporate incorporated under the Companies Act 1965 and conferred with the rights, powers, privileges and liberties as spelt out in the Petroleum Development Act 1974 (the PDA). The 2nd defendant is the Federal Government. By a vesting instrument of 22 March 1975 signed by the then Menteri Besar of the plaintiff (the vesting instrument), the 1st defendant was vested with 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 (s. 2 of the PDA). And under an agreement of the same date between the plaintiff and the 1st defendant (the principal agreement) it was agreed that in return for the ownership and the rights, powers, liberties and privileges vested by the plaintiff in the 1st defendant in respect of petroleum by the vesting instrument, the 1st defendant was required to make to the plaintiff cash payment in the form of yearly sum amounting to the equivalent of 5% of the value of the petroleum won and saved in the State of Terengganu and sold by the 1st defendant, its agents or contractors. The determination and the calculation of the cash payment were elaborated and expanded in an agreement of 16 September 987 signed between the plaintiff and the 1st defendant (the supplementary agreement). Consequently, payments were made by the 1st defendant to the plaintiff from 1978 until March 2000. Thereafter, the 1st defendant stopped the payment. The stoppage triggered the plaintiff to file the suit.

Apparently, the plaintiff relies on six causes of actions against the 1st defendant, viz. (i) breach of contract (ii) unfair discrimination (iii) deprivation of property without compensation (iv) estoppel (v) unlawful directions/ultra viresand (vi) legitimate expectation, and against the 2nd defendant, viz. (i) ultra vires(ii) relevant and irrelevant consideration (iii) error of law (iv) Wednesbury unreasonableness (v) tort of inducement for breach of contract and (vi) government contracts. Against the 1st defendant, the plaintiff seeks for specific performance of the principal agreement and the supplementary agreement, an order requiring the 1st defendant within 14 days from the date of the court order, to pay to the plaintiff the arrears in respect of the cash payments due from 1 September 2000 and the sums due in the future in accordance with the terms of the principal agreement and the supplementary agreement, damages for breach of contract and general damages; and against the 2nd defendant, for general damages, aggravated damages and exemplary damages, and against both the defendants, for interest on the amount to be adjudged, costs and other reliefs.

The 1st defendant proposed the following questions 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 22nd 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 "Vesting instrument"

(ii) the Agreement dated 22nd March 1975 between the Plainti