Mudajaya Group Berhad’s subsidiary, Mudajaya Corporation Berhad, has been served with a notice of arbitration by China Communications Construction (ECRL) Sdn Bhd (CCC), escalating a payment dispute linked to works on the East Coast Rail Link (ECRL) project.
The property group said MCB received the notice of arbitration dated June 29, 2026, from CCC, which is seeking declarations that it is not required to pay an adjudicated sum awarded to MCB, while also claiming RM22.75 million in additional costs, losses and damages.
The dispute stems from works carried out under the engineering, procurement and construction contract for ECRL Package 3, covering stations and ancillary buildings in Dungun, Kemasik and Chukai.
MCB had initiated adjudication proceedings under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) on Dec 26, 2025, to recover RM10.95 million in allegedly under-certified payments under Interim Payment Certificate (IPC) No. 22.
On May 31, 2026, the adjudicator ruled in favour of MCB, awarding the contractor RM7.77 million together with interest, costs and expenses.
Following CCC’s failure to settle the adjudicated amount, MCB filed an application with the High Court to enforce the adjudication decision as a court judgment. The matter has been fixed for further case management on July 29, 2026.
In the arbitration, CCC is seeking a declaration that it has no obligation to pay the adjudicated amount of RM7.77 million or any amount exceeding sums certified under the interim payment certificates. The company is also claiming RM22.75 million from MCB for alleged additional costs, losses, expenses, liquidated damages, management fees and interest.
Mudajaya said MCB disputes the claims in their entirety and will appoint legal counsel to defend the arbitration while pursuing counterclaims for monies it believes are owed by CCC.
The group said, apart from the amount claimed and legal costs associated with the proceedings, it does not expect any further financial impact arising from the arbitration at this stage.
