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MC has no power to supply natural gas

Court of Appeal Civil Appeal No. W-01 (NCVC) (A)-480-09/2020

SOLARIS DUTAMAS MANAGEMENT CORPORATION v ENERGY COMMISSION OF MALAYSIA AND GAS MALAYSIA BERHAD

FACTS:

A letter dated 15.7.2019 was issued to Solaris Dutamas Management Corporation requesting the Management Corporation to take over the duty to inter alia to take over the management of the supply of natural gas to the development area by applying for a retail license pursuant to the Gas Supply (Amendment) Act 2016.

Argument raised by the Management Corporation

The Management Corporation contends that it has no powers under the Strata Management Act 2013 to, inter alia:

(a) take over the management of the supply of natural gas;

(b) to supply natural gas;

(c) to sell natural gas;

(d) to maintain the pipes; and

(e) to charge end users based on consumption basis

and any form of performing the above acts is ultra vires the Strata Management Act 2013.

Energy Commission’s submission

The Energy Commission contends however that the Strata Management Act 2013 imposes a duty on the Management Corporation pursuant to Section 59(1)(e) of the Strata Management Act 2013 to comply with the notice given and is allowed to recover from the proprietor any sum expended by virtue of Section 59(2)(d) of the Strata Management Act 2013.

Decision of the High Court:

The Learned High Court Judge disagrees with the argument advanced by the Management Corporation and ruled that the Management Corporation has a duty to comply with the amendments made to the Gas Supply Act 1993.

Full grounds of the High Court can be downloaded below:

Decision of the Court of Appeal

Aggrieved by the decision, the Management Corporation appealed. Hearing took place on 1.10.2021 and after hearing submission of parties, the Court of Appeal allowed the appeal of the Management Corporation partially and ruled that:

(a) The Management Corporation has no powers to supply utilities, be it gas, water, electricity or internet;

(b) Taking over the duty to inter alia, supply natural gas to the development area is ultra vires the Strata Management Act 2013;

(c) Any attempts from and/or actions taken to compel the Management Corporation to obtain a retail license to continue to supply natural gas to the end user is ultra vires the Strata Management Act 2013.

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Author
Partner at Chee Hoe & Associates. With 10+ years of experience under his belt, he specializes in civil and corporate litigation. He is also the current Chairperson of various Joint Management Bodies.
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