This article first appeared in The Edge Financial Daily on March 20, 2018

KUALA LUMPUR: Boustead Holdings Bhd, whose 51%-owned unit MHS Aviation Bhd served a notice of arbitration to Petronas Carigali Sdn Bhd in 2016 for an alleged breach of contract over the early termination of a helicopter charter deal, has agreed to settle its dispute with the latter.

It also agreed to do the same for Petronas Carigali’s joint operating partners (JOPs) ExxonMobil Exploration and Production Malaysia Inc, EnQuest Petroleum Production Malaysia Ltd, and Sapura Exploration and Production (PM) Inc.

In a Bursa Malaysia filing yesterday, it said MHS has inked separate confidential agreements or undertakings with the four parties, and that “upon full payment of the settlement sum, MHS will withdraw its arbitration proceedings against Petronas Carigali”.

While Boustead did not disclose the settlement amount, its group managing director Tan Sri Lodin Wok Kamaruddin said the sum is “satisfactory” and “fair”.

Boustead earlier sought RM42.7 million worth of damages from Petronas Carigali alone, based on the notice of arbitration it served on Sept 1, 2016.

In the deal, Boustead allocated five helicopters for the contract with Petronas Carigali — Provision of Rotary Wing Aircraft, Equipment and Services (For Heavy Type Aircraft- EC225) — dated June 29, 2011.

The dispute arose when Petronas Carigali suspended the use of all choppers by Boustead following two force landing incidents in the North Sea in 2012 involving flyers of the same model, but which were not connected to the parties involved in the contract. The JOPs then followed suit and prematurely terminated the contract with MHS.