Boustead's MHS Aviation seeks RM42.7m in damages from Petronas Carigali

KUALA LUMPUR: Boustead Holdings Bhd's subsidiary is seeking RM42.70mil in damages from Petronas Carigali Sdn Bhd over the suspension of a contract to provide five helicopters for the latter's operations.

Boustead said on Thursday its 51% owned MHS Aviation Bhd (MHS) had issued a notice of arbitration against Petronas Carigali over a contract dated June 29, 2011.

“Under the contract, rules of the Kuala Lumpur Regional Centre For Arbitration shall apply to this arbitration,” it said. 

Boustead said MHS was hired by Petronas Carigali to provide five EC225 helicopters for use in the latter's oil and gas exploration and production operations. 

“The use of all five helicopters was, however, suspended by Petronas Carigali unilaterally following two forced landings in the North Sea in May and October 2012 involving EC225 helicopters that were unconnected to the parties in the present case,” it said. 

Boustead said MHS viewed this suspension of service as a breach of contract by Petrnas Carigali and was claiming in the arbitration RM42.76mil in damages; general damages and other damages deemed fit by the tribunal.

It also sought a declaration that Petronas Carigali was liable to pay MHS the monthly standby rate during the period the emergency airworthiness directive issued by European Aviation Safety Agency (EASA) remains legally applicable to Malaysian registered EC225 helicopters by virtue of Department of Civil Aviation regulations/directives.

“This arbitration is part of the company’s on-going recovery actions to protect and preserve MHS’ rights and monetary claims for various works and services provided in respect of contracts entered into by MHS,” it said.