The Legal Problem Concerning the Right over PTT’s Petroleum Pipelines: A Study of the Supreme Administrative Court Decision No For.35/2550

Abstract

             Whether PTT Public Company Limited (PTT) returned the right over the petroleum pipelines both on land and at sea and the real right over the land which was declared the petroleum pipeline transport premise properly and completely has been long debated among all government agencies concerned since the delivery of the Supreme Administrative Court Decision No For.35/2550 on 14 December B.E. 2550 (C.E. 2007).

In this Supreme Administrative Court’s case, the complaint was submitted by a private entity to challenge the privatization of the state enterprise Petroleum Authority of Thailand, which was established under legislation in B.E. 2521 (C.E. 1978), which transformed it into public company limited under the Corporatization Act B.E. 2542 (C.E. 1999). The main issue concerns the revocation of two royal decrees which underpinned such privatization. Although the Supreme Administrative Court accepted that these two secondary decrees which gave PTT certain administrative power and privilege were not legally enacted, they should not be revoked. In fact, the Court dismissed the complaint. However, the Court ordered PTT to return the property and the rights obtained through the exercise of administrative power over private property to the Ministry of Finance and permitted PTT to retain the right to rent the land and petroleum pipelines from the Ministry of Finance.

                        Although on several occasions the Supreme Administrative Court have made orders, judgements and decisions on petitions that the separation and return of land and rights acquired from the declared petroleum pipeline transport premises to the Ministry of Finance has properly been done in accordance with the Court’s decision, the private entity plaintiff, the Ombudsman and the Office of the Auditor General have always challenged the Court’s decision, renewed their objection, and submit new complaints about the same issue to the Court over the past ten years. They maintained that PTT has only returned the real right over the real property and petroleum pipelines on the declared petroleum pipeline transport premises which belonged to private individuals and which became burdened property but that they have not returned the rights over the petroleum pipeline transport which was built on the land that PTT acquired through purchase, hire-purchase, or permission from relevant government agencies to install pipelines on highways and in nation reserved forests, whereby administrative power was exercised over the related lands.

Moreover, the petitor argued that the declaration of the petroleum pipeline transport premises at sea is the exercise of administrative power and it was attached to the seabed which is a public domain. Thus, such property right must be returned to the Ministry of Finance by virtue of the Supreme Administrative Court’s decision. However, this has not been done so far. 

The disagreement and controversy over the right over the petroleum pipelines of the Petroleum Authority of Thailand which arose from the Supreme Administrative Court’s decision has provoked a widespread debate and discussion in legal community, media and social media and has become a major issue which has have had a significant impact on Thailand’s economy, society, finance and public finance, energy industry and decision-making on energy policy given that PTT is the country’s largest public company in the Stock Exchange of Thailand and the national petroleum company which is currently responsible for the country’s energy security.

This Article is aimed at studying the Supreme Administrative Court’s decision in question and related orders and judgements as well as arguments and counter-arguments over the issue that the judgement has not properly been executed. It also looks into arguments and explanations from related government agencies which may present different versions of facts. It takes into account public law principles written in different acts, judgements and foreign public law principles in analysing, understanding, seeking a solution to the issue of the execution of the judgement and whether and how it has been done in accordance with the exercise of government power. The paper chronicles the privatization of the Petroleum Authority of Thailand and need for PTT by exploring the economic condition after B.E. 2540 (C.E. 1997), the relevant provisions and procedure of the Corporatization Act which gave rise to the problem. It then explores the decision of the Supreme Administrative Court which ordered the return of some property to the Ministry of Finance which followed by its enforcement the declaration of the Court that such enforcement was complete.

The main point of analysis of this paper derives from a study of the view of those who argued that the return of the property to the Ministry of Finance has incompletely been done, especially their reasoning and recommendation in the complaints and petitions submitted to the Court or publicized and the reasoning and explanation provided by the Court in its judgements or orders on several occasions. It revolves around two main issues which require the application of public law theories to resolve. The first issue concerns the characteristics and scope of limitation of government power which was the keyword used by the Court in deciding the case. The second issue is related to the definition and scope of becoming public domain on the petroleum pipeline transport premises under the law founding the Petroleum Authority of Thailand which is the theoretical basis for the judgement which ordered the return of immovable property which is public domain to the Ministry of Finance.

The author hopes that this paper’s chronicle of events and anatomy of the Court’s decision and opinions on various issues in order seek a solution to the problem of PTT’s property that needs to be returned to the Ministry of Finance and the analysis of domestic and foreign public law principles in relation to the issue of the right over PTT’s petroleum pipelines in this paper would offer a clarification and proper understanding of the main problem of this article