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Islamic Party Sues Malaysian Government Over Oil Royalties
Report
by IOL Correspondent, Kazi Mahmood
KUALA
LUMPUR, Feb. 19 (IslamOnline) - The battle over hundreds of millions of U.S.
dollars of oil royalty between the Malaysian government and the Islamic Party of
Malaysia (PAS) is now being fought, since Monday in the High Court in Kuala
Lumpur.
The
legal battle became inevitable after the Malaysian government withdrew royalty
payments for offshore petroleum to the Terengganu state government run by the
PAS.
The
withdrawal took effect in September 2000 and has since then denied the PAS run
state government a valuable source of income.
The
PAS maintained the decision was politically motivated and is suing the federal
government and the national oil company Petroliam Nasional Bhd (Petronas) for
default payment.
PAS
officials say the decision to stop the royalty was a punishment meted by Prime
Minister Mahathir Mohamad against the party which has wrestled the state in a
landslide victory in 1999.
Mahathir’s
party, the United Malays National Organization (UMNO) ruled over Terengganu for
25 years and had always been paid the royalty, which was used for the
development of the state.
Mahathir
defended the cancellation of the royalty payment saying that the move was
necessary because the Islamic party could not be trusted to administer the
funds.
He
added that the PAS had other political agenda’s in mind and would have spent
the money to build its strength in Northern Malaysia. The PAS, which is the
largest opposition party in Malaysia, controls another state in the north,
Kelantan since 1990.
The
opposition party claims the federal government and Petronas breached a contract
with the state by stopping the payments. The royalty would have amounted to more
than US250 million dollars each year.
Lawyers
on Monday and Tuesday focused their arguments on technical points, such as
whether Terengganu officials are entitled to the royalties.
Lawyer
Cecil Abraham, representing Petronas, cited a string of laws dating back to a
British colonial era Constitution signed by Terengganu's sultan nearly a century
ago, which he submitted and raised questions about the extent of Terengganu's
sovereign rights as a state.
Abraham
said that these issues empowered the court to strike out the lawsuit before
hearings proceed further, obviating the need for a 'full-blown trial'.
However,
the PAS is intent on defending its case on the fact that the royalty has been
paid to the pro-Mahathir state government for a quarter of the century without
interruption.
It
is determined to prove that the stopping of the payment to the state government
had nothing to do with economic concerns and was a ploy by the ruling coalition
in Malaysia to undermine the PAS government in Terengganu.
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