Scomi unit seeks arbitration over contract termination
KUALA LUMPUR: Scomi Engineering Bhd’s wholly-owned Scomi Transit Projects Sdn Bhd (STP), is seeking arbitration over Prasarana Malaysia Bhd’s decision to terminate its RM494 million KL Monorail extension contract due to an alleged delay in train delivery.
In a filing to Bursa Malaysia yesterday, Scomi said the dispute arose in relation to a notice of termination dated June 9 issued by Prasarana, which gave STP 14 days from the notice date to renew a performance bond linked to the contract.
It said failing which, the contract dated June 3 2011, as supplemented by two supplemental agreements dated April 16 2014 and April 15 last year, would terminate.
Based on the principal contract, Scomi was contracted by Prasarana to deliver 12 sets of four-car monorail trains, construct a depot, install a signalling system and upgrade KL Monorail stations, including the electrical and mechanical system, for a total of RM494 million.
The second supplemental contract required Scomi to deliver 10 sets of four-car trains, including seven sets for revenue service, by December 31 last year.
Prasarana, however, claimed only six sets of new four-car monorail trains had been delivered to date, five sets of which were currently in revenue service.
Following an inter partes hearing on June 27, the High Court here extended the term of an injunction earlier granted on June 21 in favour of STP.
The injunction restrains Prasarana from terminating the contract based on the notice or otherwise giving effect to the notice, pending the hearing and disposal of the originating summons until further order of the court.
“The legal action and injunction have become necessary after Prasarana threatened to terminate the KL Monorail expansion contract in disregard to the terms set out therein,” it said in a filing dated March 1.
Scomi said the plaintiff was not in breach of the principal contract or contracts as the duration of the performance bond could not be fixed because time for completion of the works was at large and the parties were still in negotiation to fix an extended completion date.