KUALA LUMPUR – The Court of Appeal has ruled that Petroliam Nasional Berhad (Petronas) did not breach its gas supply agreement with Shell MDS (Malaysia) Sdn Bhd, and that the High Court erred in granting an injunction compelling the company to continue supplying gas.
Justice Datuk Wong Kian Kheong, in his judgment, said the High Court judicial commissioner failed to consider Section 53 of the Specific Relief Act 1950, which required Shell MDS to prove that Petronas had violated the agreement signed between the two parties.
On Monday, a three-member Court of Appeal panel comprising Datuk Azimah Omar, Datuk Ismail Brahim and Wong allowed Petronas’ appeal to set aside the interim injunction obtained by Shell MDS, which had allowed the latter to stop making monthly payments for gas supplied by Petronas to its Bintulu facility in Sarawak.
“In this case, the agreement between Petronas and Shell MDS was not breached. On the contrary, Petronas has complied with the agreement at all material times,” Wong said, as reported by Bernama.
Wong added that the High Court commissioner, Arziah Apandii, could only exercise discretion to grant an interlocutory mandatory injunction (for natural gas supply) if Shell MDS could establish an “exceptionally strong and clear” case against Petronas.
“We are not satisfied that the first respondent (Shell MDS) has met the stringent prerequisites for such an ‘exceptionally strong and clear’ case against the appellant (Petronas) to justify the High Court granting an injunction,” he said.
The Court of Appeal judge further said that granting the injunction to continue supplying gas in this case had financially burdened Petronas and negatively impacted the company’s finances.
“This is because the appellant has been and continues to be compelled by the interlocutory mandatory injunction to supply natural gas without receiving any payment.
“It must be emphasised that the appellant has been and continues to be deprived of significant payments, approximately RM800 million per month, since the High Court’s interim injunction was granted on Dec 19 last year,” he said.
Wong noted that there was no dispute that the interlocutory mandatory injunctions — to supply gas and to halt enforcement of the Bank Guarantee — had altered the status quo to Petronas’ financial detriment.
On Monday, the Court of Appeal panel chaired by Azimah also cancelled the injunction requiring Petronas to continue supplying gas to Shell MDS and the order that had allowed the suspension of the Bank Guarantee.
The court further ordered Shell MDS to pay Petronas all outstanding amounts from August 2024 to Oct 5 this year, with payment due before Oct 6.
Shell MDS had withheld payment due to concerns over receiving two invoices — one from Petronas and another from Petroleum Sarawak (Petros) — raising fears of double payment while a jurisdictional dispute between Petronas and Petros was being resolved.
The High Court had granted the injunction on the basis that Shell MDS was party to two separate gas supply agreements, one with Petronas (signed on July 17, 2020) and another with Petros (signed on Aug 16, 2024). – September 25, 2025
The post Court of Appeal: Petronas complied with gas deal, High Court wrong to grant injunction appeared first on Scoop.
