KUALA LUMPUR (Sept 19): Scomi Engineering Bhd has been disallowed from proceeding with a legal action against Prasarana Malaysia Bhd over their dispute involving the termination of a RM499 million contract.

The action was initiated by Scomi Engineering's unit, Scomi Transit Projects Sdn Bhd, on June 3. Among others, it sought to restrain Prasarana from appointing a new party to complete the remaining works under the contract pending the disposal of arbitration proceedings between the two parties.

The contract involved, among others, the upgrade of stations and systems of the Kuala Lumpur Monorail and replacement of old trains with 12 new four-car trains, six of which had already been delivered.

"The action, instituted pending disposal of the arbitration (enclosure 1) and including the interim injunction instituted pending disposal of enclosure 1, were not allowed by the High Court today, with costs of RM20,000," Scomi Engineering said in a filing with Bursa Malaysia.

Meanwhile, Scomi Engineering is en route for a three-way merger with its parent Scomi Group Bhd and sister company Scomi Energy Services Bhd.

Scomi Group currently owns a 72.33% stake in Scomi Engineering and 65.65% of Scomi Energy.

Scomi Engineering's share price gained two sen or 6.9% to close at 31 sen today, giving the firm a market capitalisation of RM106.04 million.