High Court rejects Petronas’ move to turn Shell MDS payment dispute into writ action

KUCHING (Oct 8): The High Court in Kuala Lumpur today dismissed Petroliam Nasional Berhad’s (Petronas) application to convert the ongoing interpleader proceedings involving Shell MDS (Malaysia) Sdn Bhd into a writ action.

Petronas had sought to change the mode of proceedings on grounds of alleged complexity and the need for oral evidence.

However, the Court held that an originating summons under Order 17 of the Rules of Court 2012 (ROC) is a self-contained process designed specifically to resolve competing claims against a neutral stakeholder.

In its decision, the Court ruled that converting the proceedings into a writ would fundamentally alter their nature, transforming them into an adversarial action and defeating the purpose of an interpleader process.

The ruling was conveyed through a statement issued by the Sarawak Premier’s Office.

The interpleader proceedings were initiated by Shell MDS to determine the rightful recipient of payments arising from overlapping claims between Petronas (First Defendant) and Petroleum Sarawak Berhad (Petros) (Second Defendant) for the supply of gas.

Both Petros and the Sarawak government opposed Petronas’ application, arguing that Order 17 already provides a complete procedural framework capable of addressing both factual and legal disputes without altering the nature of the proceedings.

They contended that Petronas’ move would unnecessarily complicate and delay the matter.

Converting such a proceeding into a writ would fundamentally alter its nature, turning it into an adversarial action and defeating the very purpose of an interpleader proceeding under Order 17, they said.

The background of the case shows that Shell MDS, as the interpleader plaintiff, filed the proceedings to determine to whom payments should properly be made amid overlapping claims from Petronas and Petros.

Petronas had applied to convert the originating summons into a writ action, citing complex issues and factual disputes that, in its view, required trial through oral evidence.

The hearing took place on Aug 15, 2025, with both Petros and the Sarawak government opposing the application.

In delivering its decision, the High Court found that Order 17 provides a distinct and self-contained process meant for cases where a neutral party faces competing claims over the same property or payment.

The Court agreed with Sarawak’s argument that converting the originating summons into a writ action would turn the matter into a fully adversarial claim, thereby defeating the very objective of an interpleader proceeding.

It further held that Petronas’ attempt to broaden the dispute beyond the issue of entitlement, particularly into constitutional questions, was not permissible under Order 17.

The Court stressed that the scope of an interpleader proceeding is limited to determining to whom the stakeholder, in this case Shell MDS, should make payment, and not to revisit wider policy or constitutional issues.

It also noted that this case does not hinge on witness testimony but can be resolved through documentary evidence, as the dispute concerns legal entitlement rather than factual controversy.

The Court has fixed Nov 10, 2025, for case management via e-review.