Pestech International Berhad (Pestech), disputes reliefs sought by SPYTL via notice of arbitration in relation to the Parent Company Guarantee issued by Pestech to SPYTL.
In a Bursa filing today (Oct 23), the company said it will also raise detailed explanation in the response to the notice of arbitration that will be served in due course.
“(This is) further to our announcement dated 20 October 2023, in relation to the Notice of Arbitration dated Oct 18 served by Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (SPYTL) under the Asian International Arbitration Centre (AIAC) Arbitration Rules 2023.
“The notice is in relation to the Parent Company Guarantee (PCG) issued by Pestech to SPYTL to guarantee the due performance of the sub-contracting agreement dated Dec 18, 2018 entered between SPYTL and Pestec subsidiary, Pestech Technology Sdn Bhd (PTech) for details of the rail project (or sub-contract) known as the design, construction, supply, installation, completion, testing, commissioning and maintenance of the Electrified Double Track from Gemas to Johor Bahru.
SPYTL, in the notice, is broadly seeking reliefs pursuant to the terms in the PCG including a declaration that Pestech has breached/defaulted under the PCG and is responsible and liable for any liability arising from or in connection with the breach/default by PTech of the project.
In the notice, SPYTL also declares that Pestech is obliged to pay and make good to SPYTL forthwith and fully indemnify and keep indemnified SPYTL for what it suffered due to termination of the project, as well as that Pestech obliged to indemnify and keep indemnified SPYTL arising from or in contemplation of the non-observance or non-performance by Pestech, as stated under the PCG.
SPYTL also stipulates damages (to be assessed) in respect of the breaches of the PCG and appropriate reliefs (including damages) touching on the continuing breaches by PTech and Pestech on the construction equipment that SPYTL claimed that they are entitled to take over and use.
The company added SPYTL also asked for appropriate reliefs (including damages) touching on the continuing breaches by PTech on the performance bond issued by PTech to SPYTL in which SPYTL claims to be entitled to call upon as well as pre-award and post-award interest on all sums awarded, costs and expenses arising out of the arbitration and such other relief as the circumstance require.
In July, Pestech denied that its subsidiary, PTech, which has been terminated as a sub-contractor for the Gemas-Johor Bahru electrified double-track rail project, is insolvent as claimed by the main contractor SPYTL.
Pestech, in the report, instead had alleged that the rail project was experiencing serious negative cash flow issues created by SPYTL.
The project, with a fixed sub-contract price of RM399 million, was awarded in September 2018 to PTech from SPYTL under the SIPP-YTL JV — a consortium between SIPP Rail Sdn Bhd and SPYTL.
