Malaysian court orders Shell MDS to pay overdue gas payments to Petronas
FILE PHOTO: The logo of Malaysian energy group National Petroleum Limited, commonly known as PETRONAS, is displayed at their booth during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
KUALA LUMPUR :The Malaysian Court of Appeal has overturned a High Court injunction that allowed Shell MDS (Malaysia) to halt its monthly gas payments to national energy firm Petronas from August 2024, local media reported on Monday.
The three judge panel ruled in an unanimous decision that there was no breach of agreement by Petronas, as it had continued supplying gas to Shell MDS throughout the dispute, according to media outlet The Edge.
The original injunction by the High Court was granted last year after Shell MDS started to receive competing invoices of 80 million ringgit each from both Petronas and Petros, a gas aggregator owned by the state of Sarawak.
Shell MDS had sought the injunction to stop making the monthly payments until the dispute between Petronas and Petros was resolved. The injunction also directed Petronas to continue to supply gas to Shell MDS.
Shell MDS argued that it was caught between competing claims by Petronas and Petros, and had sought protection from double payments, the Edge reported.
Petronas maintained it had fulfilled all contractual obligations and deserved payment for the gas it had continued to supply to Shell MDS.
In an emailed response on Tuesday, Shell Malaysia told Reuters that Shell MDS respects and will comply with the ruling of the Court of Appeal on the matter.
On Monday, the court also lifted a separate injunction that barred Petronas from utilising Shell MDS's bank guarantee for gas payments, the Edge reported.
Petronas claimed that Shell MDS owed between 70 to 80 million ringgit per month, and the total outstanding arrears, including interest, could potentially reach 1 billion ringgit.
The court ordered Shell MDS to pay Petronas the outstanding amounts owed from August 2024 until October 5 this year, with the payment due by October 6. It also ordered Shell MDS and Petros to pay a respective 50,000 ringgit and 30,000 ringgit in costs to Petronas.
The court also ordered Petronas and Petros to take action to resolve the dispute as soon as possible.
Petronas also did not immediately respond to a request for comment on Tuesday.
