Judge lifts injunction barring Prasarana from ending contract with Scomi

Once all the 12 four-car trains are in operation, the 2-car trains will be decommissioned. They will be sold to other companies.

KUALA LUMPUR: The High Court has cleared the path for Prasarana Malaysia Bhd to terminate the RM494mil Kuala Lumpur Monorail expansion contract awarded to Scomi Transit Projects Sdn Bhd (STP) but prevents the public transport provider from hiring a different contractor prior to the hearing of STP's appeal.

In a filing with Bursa Malaysia, STP’s parent company Scomi Engineering Bhd said the court on Tuesday did not extend the interim injunction that prevented Prasarana from cancelling the contract.

“However, the court made an order restraining Prasarana from appointing another contractor for the project until the appeal hearing,” it added.

On Friday last week, the court dismissed the originating summons that STP filed to start legal proceedings against Prasarana, but STP had filed a notice of appeal. Scomi said an appeal had been fixed for hearing on Aug 16.

Scomi said STP would challenge the purported termination of the contracts, comprising the principal contract dated June 3, 2011, supplemented by two subsequent agreements.

STP plans to pursue its rights in arbitration, having filed a notice of arbitration for wrongful termination of the contracts on July 21.

STP will also continue to pursue its extension of time and variation order claims pursuant to the Construction Industry Payment and Adjudication Act 2012 and in arbitration and all other claims in line with its entitlements.

As provided for under the Act, STP had made four payment claims on Prasarana totalling RM365mil.

“These will mitigate any potential adverse impact on the financial performance of the Scomi Engineering group during the current financial year, which may arise from the purported termination,” Scomi said.

Scomi Engineering also reiterated its previous claim that 83% of the project works had been completed by STP despite “extensive delays beyond its control and ongoing disputes relating to contractor claims.”