The KL monorail expansion contract was for an upgrade of the KL Monorail stations and the electrical and mechanical system, the construction of a new depot, and delivery of 12 sets of new four-car trains for a total contract value of RM494mil. (filepic of a train)
PETALING JAYA: Scomi Engineering Bhd’s unit, Scomi Transit Projects Sdn Bhd (STP), has issued a notice of arbitration against Prasarana Malaysia Bhd to resolve the dispute between itself and Prasarana pertaining to the KL Monorail expansion project through arbitration.
The dispute arose in relation to the notice of termination dated June 9, 2016 issued by Prasarana, which gave STP 14 days from the notice date to renew a performance bond connected with the project, failing which the contract for this project would terminate, the company told Bursa Malaysia.
“Following an inter partes hearing on June 27, 2016, the court extended the term of an injunction earlier granted on June 21, 2016 in favour of STP restraining 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,” it said.
STP said that it had invoked the reference to arbitration pursuant to Clause 20 of the principal contract and in accordance with Malaysian Law and to be settled in Kuala Lumpur.
STP said that Prasarana failed to respond to its earlier notice of dispute issued on June 20, 2016 to refer the dispute to a dispute adjudication board to be formed pursuant to the requirements of the principal contract.
The KL monorail expansion contract was for an upgrade of the KL Monorail stations and the electrical and mechanical system, the construction of a new depot, and delivery of 12 sets of new four-car trains for a total contract value of RM494mil.
Scomi said then that legal action and injunction had become necessary after Prasarana threatened to terminate the KL Monorail expansion contract in disregard to the terms that had been set out.
It was reported that the four-car trains would be replacing the two-car trains. This change of trains was to be the first for KL Monorail since it began operations in 2003.
The company said the effect of the arbitration on the ongoing business performance on itself is dependent on the outcome of the proceedings.
