KUALA LUMPUR (Aug 4): Malakoff Corp Bhd has signed an agreement with a consortium of three companies and three other Japanese boiler manufacturers to settle the lawsuits it had brought against them for an alleged breach of contract at its Tanjung Bin power plant.

The agreement was entered into by Malakoff’s 90%-owned subsidiary Tanjung Bin Power Sdn Bhd (TBP), and the consortium comprising Sumitomo Corp, Zelan Holdings (M) Sdn Bhd and Sumi-Power Malaysia Sdn Bhd, and broiler manufacturers IHI Corp Japan, ISHI Power Sdn Bhd and IHI Power Systems (M) Sdn Bhd.

The parties have agreed to resolve and settle their disputes according to the terms and conditions of the agreement, Malakoff said in a filing with Bursa Malaysia today, without revealing details of the agreement.

However, Malakoff said the signing of the agreement is expected to contribute positively to the group’s earnings and net assets for its financial year ending Dec 31, 2017 (FY17).

“As a result of the agreement, a consent judgement will be entered in the litigation action (with IHI Corp, ISHI Power, and IHI Power Systems) on a ‘strictly without admission of liability basis’,” it said.

Meanwhile, TBP will withdraw and discontinue the arbitration proceedings against Sumitomo, Zelan and Sumi-Power, based on the terms agreed upon.

To recap, Malakoff had in December 2015 filed a RM780 million litigation action against IHI Corp, ISHI Power and IHI Power for the failure of at least 22 different boiler tube failure incidents at its Tanjung Bin power station, which led to the plant’s inability to meet certain required output conditions.

In November last year, Malakoff also sought RM785 million via arbitration proceedings from Sumitomo, Zelan, and Sumi-Power for RM785 million, for breach of contract as the consortium had been engaged to provide TBP with engineering, procurement, construction and commissioning (EPCC) and related services.

Shares in Malakoff were unchanged at RM1.02 apiece as at noon break today, having seen 605,300 shares crossed. The utilities firm had a market capitalisation of RM5.1 billion.