The Court of Appeal today set aside an interim injunction obtained by Shell MDS (Malaysia) Sdn Bhd from the Kuala Lumpur High Court stopping it from having to make monthly payments for gas obtained from national oil gas company Petronas, following competing invoice claims from Petroleum Sarawak Bhd (Petros).
The Edge reported that the court also set aside an injunction by the High Court requiring Petronas to continue supplying gas to Shell MDS throughout the period, as well as withholding of the bank guarantee throughout the period of the prohibitory order.
The appellate bench, led by Justice Azimah Omar, ordered Shell MDS to pay the outstanding amount that it owed to Petronas by Oct 6 for the period of August 2024 up to Oct 5 this year.
Petronas claimed Shell MDS had owed between RM70 million and RM80 million a month since August 2024, following the injunction imposed by the High Court in January this year.
The amount owed, including interest, may reach close to RM1 billion.
The second judge on the appellate bench, Justice Wong Kian Kheong, said Judicial Commissioner Arziah Apandi was wrong to grant the injunctions because there was no breach of agreement by Petronas, as the national oil company had continued to supply gas to Shell MDS.
Wong said Petronas had always acted according to the gas supply agreement signed with Shell MDS and there was no reason to grant the interlocutory relief, pending the resolution of the dispute between Petronas and Petros.
He said there is also “less risk of injustice” if Petronas is not compelled to continue to supply gas without being paid.
“Accordingly, we set aside the June 6 decision and all payments are due to the appellant (Petronas).
“The court also orders an early disposal of the interpleader summons (dispute between Petronas and Petros),” he said.
The three-member bench, which included Justice Ismail Brahim, also ordered Shell MDS to pay RM50,000 in costs to Petronas. Petros was ordered to pay RM30,000 to the national oil company.
Earlier this year, Shell MDS was granted an injunction allowing the company to continue its operations without disruption until legal proceedings between Petronas and Petros had been resolved.
Shell MDS sought the injunction to stop monthly payments for the gas supply until the dispute between Petronas and Petros was resolved.
The injunction also directed Petronas to continue to supply gas to Shell MDS, which had obtained an injunction barring Petronas from utilising its bank guarantee for the gas payments.
The High Court injunction was granted after Shell MDS received competing invoices of RM80 million each from Petronas and Petros.
Petros has been the sole gas aggregator for Sarawak since last year.
Last year, Shell MDS also filed an interpleader summons to determine whether Petronas or Petros was the party entitled to payment for the supply of gas at its Bintulu facility.
