WCT awarded RM1.19bil in Dubai racecourse arbitration case

KUALA LUMPUR: WCT Holdings Bhd, through unit WCT (Dubai Branch), has been awarded 1.153 billion Emirati dirhams (RM1.19bil) in the arbitration case involving the Nad Al-Sheba Racecourse project in Dubai.

WCT told Bursa Malaysia on Wednesday that the Dubai International Arbitration Centre (DIAC) ruled that Meydan Group LLC’s cancellation and purported termination of the contract to the 50:50 joint venture (JV) between WCT Bhd (Dubai Branch) and Arabtec Construction LLC was unlawful, invalid and of no effect.

The construction contract, awarded in September 2007 and terminated about a year later, covered the main building works, external works and infrastructure works of the racecourse.

The arbitration tribunal’s award includes WCT (Dubai Branch)’s claims in respect of amounts owing for work done, repayment of performance Bond, loss of profit, damages, interests and so on (1.118 billion dirhams or RM1.16bil) plus arbitration and legal costs.

As at March 31, 2015, the carrying value of performance security deposits and contract receivables under dispute amounts to approximately 318 million Emirati dirhams (RM328.8mil).

The Dubai Court had on Feb 26, 2013 dismissed the civil suit initiated by Meydan against WCT and Arabtec claiming a sum of 3.5 billion Emirati dirhams (RM3.62bil) in view of the pending arbitration in the DIAC case and the binding arbitration agreement between the parties.

WCT’s JV with Arabtec was awarded the deal to build the Nad Al Sheba Racecourse in Dubai back in September 2007 for a contract sum of about 4.6 billion Emirati dirhams.

WCT announced the cancellation on Jan 6, 2009, and subsequently it was reprimanded by Bursa Malaysia Securities for not announcing the cancellation earlier. Meydan’s notice was dated Dec 25, 2008.

WCT’s substantial shareholders include Lembaga Tabung Haji (8.98%), the Employees Provident Fund (7.72%) and the Retirement Fund Inc (KWAP) (6.29%).

WCT closed 9 sen lower at RM1.25 on Wednesday.