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Property News

FGV unit wins RM12.6 mil in estate workers housing project dispute with contractor

KUALA LUMPUR (Feb 7): An arbitral tribunal has awarded a unit of FGV Holdings Bhd RM12.64 million in the plantation group’s contract dispute with construction company Multazam Development Sdn Bhd concerning the latter’s termination from an estate workers housing project.
In the final award of the arbitration proceedings brought by Multazam against FGV’s wholly owned unit FGV Plantations (M) Sdn Bhd over its termination from the contract, an Asian International Arbitration Centre (AIAC) tribunal ruled for Multazam to pay FGV Plantations RM12.52 million — being the additional costs to complete Multazam’s works in respect of the project as well as FGV Plantations’ loss of profit.
Additionally, Multazam is to pay FGV Plantations RM294,000 in “nett costs”.
On the other hand, the tribunal ruled for FGV Plantations to pay RM86,341.45 — value of unpaid completed works minus liquidated and ascertained damages.
Meanwhile, the costs of the award amounting to RM418,935.17 are to be split between Multazam and FGV Plantations on an 80:20 basis, or RM335,148.14 and RM83,787.03 to be paid by the respective parties.
All in all, FGV Plantations is expected to gain RM12.64 million from the tribunal’s final award.
“The final award has no operational or financial implications for the respondent, and if the amounts awarded to the respondent (FGV Plantations) thereunder are recovered from the claimant (Multazam), such amounts received may be expected to contribute positively to [FGV Plantations’] earnings,” FGV noted in a bourse filing on Wednesday.
To recap, FGV Plantations (then known as Felda Global Ventures Plantations (M) Sdn Bhd) terminated the appointment of Multazam as the design-and-build contractor for an estate workers housing project back in September 2018, due to “various defaults and breaches of the contract” by Multazam.
Thereafter, Multazam initiated arbitration proceedings against FGV Plantations in April 2019 disputing the termination.
In the proceedings, Multazam claimed for declarations from the AIAC that the construction firm is entitled to an extension of time to complete the works, damages for unlawful termination, payment of value of completed works, release of its RM3.75 million performance bond, and that FGV Plantations is not entitled to impose any liquidated and ascertained damages against it.
Shares in FGV ended one sen or 0.69% lower at RM1.43 on Wednesday, valuing the group at RM5.22 billion.
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Source: EdgeProp.my


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