Muhibbah Engineering-LTAT joint venture wins claim against govt

Posted on 28 July 2016

Source: The Sun Daily

Muhibbah Engineering (M) Bhd's (MEB) joint venture with Lembaga Tabung Angkatan Tentera (LTAT) has won a lawsuit against the Malaysian government, initiated for claims outstanding from the completed Sepangar Naval Base project in Sabah.

In a stock exchange filing yesterday, MEB said the joint venture company, Muhibbah–LTAT JV Sdn Bhd, has been awarded RM13.97 million, being the final claims, costs, finance charges and disbursements.

"The total sum awarded is payable within the next four weeks, failing which interest at a rate of 5% per annum will be imposed," it said.

To recap, MEB's 51% unit, Muhibbah–LTAT JV Sdn Bhd, on Feb 2, 2012 began arbitration proceedings against the government pertaining to the claims and charges for the project.

The government of Malaysia via the Ministry of Defence is the owner of the naval base project at Teluk Sepangar, Kota Kinabalu, Sabah.
The government appointed Muhibbah–LTAT JV to execute the works for the project in 2001.

According to its filing in 2012, MEB said although the project was completed in 2007, there were claims arising that were not paid by the government. As a result, the JV commenced arbitration against the government for claims amounting to about RM26 million.

In a separate filing with Bursa Malaysia, MEB said its joint-venture company, Monadelphous Muhibbah Marine JV (MMM), has reached an agreement with Wiggins Island Coal Export Terminal Pty Ltd (Wicet) to resolve all claims related to contracts performed on the Wiggins Island Coal Export Terminal Project in Gladstone, Queensland, Australia.

"However, this agreement remains subject to third-party approvals," MEB said, adding that this agreement was in the best interest of the JV.

MMM, an equal joint venture with Monadelphous Engineering Pty Ltd, in 2015 took legal action against Wicet over a payment dispute. The legal dispute arose from the construction of the approach jetty and ship berth and shiploader for the Wiggins Island Coal Export Terminal at Gladstone, Queensland. 

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