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1. INTRODUCTION
Gamuda Berhad (“Gamuda” or “the Company”) wishes to announce that Wayss & Freytag (Malaysia) Sdn Bhd (“Wayss & Freytag”) has on 13 November 2008 served on Gamuda Berhad’s solicitors a Writ of Summons and a Statement of Claim (“the Court Action”).
The Court Action is for inter-alia, a court declaration that MMCEG-Gamuda Berhad Joint Venture (“the JV”) is in breach of the sub-contract dated 16 April 2003 (“the Sub-Contract”) by failing to make payment for the sum of RM102,366,880.42 awarded by the Dispute Adjudication Board (DAB) to Wayss & Freytag in respect of various claims arising out of the Sub-Contract and for damages of the same amount.
2. PARTIES
The Plaintiff in the Court Action is Wayss & Freytag, a company incorporated in Malaysia and the Defendants are MMC Engineering Group Berhad and Gamuda Berhad. MMC Engineering Group Berhad is a subsidiary of MMC Corporation Berhad.
The JV is an unincorporated joint venture comprising MMC Engineering Group Berhad and Gamuda Berhad.
3. BACKGROUND
By the Sub-Contract, the JV awarded to Wayss & Freytag the sub-contract to construct and complete the North Tunnel Drive of the SMART Project. Due to Wayss & Freytag’s inordinate delay in the progress of its work, the JV terminated the Sub-Contract on 23 January 2006 in accordance with the terms and conditions therein the Sub-Contract.
Following the said termination and in accordance with the terms and conditions of the Sub-Contract, both the JV and Wayss & Freytag submitted various claims against each other to be adjudicated by the DAB. The JV’s total claims against Wayss & Freytag is for the sum of RM161,211,524.80. Wayss & Freytag’s total claims against the JV is for the sum of RM153,818,256.63.
The final effect of the DAB’s decisions is that the JV is to pay Wayss & Freytag a sum of RM102,366,880.42.
Under the terms of the Sub-Contract any party who is dissatisfied with the decision of the DAB may issue a Notice of Dissatisfaction and require the matter to be referred to arbitration for final adjudication. The JV had served on Wayss & Freytag the relevant Notices of Dissatisfaction on the DAB’s decisions (in respect of both the JV’s claims and Wayss & Freytag’s claims) and the matter is now pending commencement of arbitration. Similarly, Wayss & Freytag has served on the JV its Notices of Dissatisfaction against some of the DAB’s decisions.
4. CURRENT STATUS
The DAB’s decisions of which the JV has issued Notices of Dissatisfaction are now pending commencement of arbitration.
As advised by the JV’s solicitors, the Company is of the view that the JV has-
(a) a good argument against the Court Action; and
(b) a good chance of succeeding in its claims against Wayss & Freytag before the arbitral tribunal.
Accordingly, the Company intends to pursue all available avenues under the provisions of the Sub-Contract to resist Wayss & Freytag’s Court Action and to realise its claims against Wayss & Freytag.
This announcement is dated 14 November 2008. |
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