KUALA LUMPUR (Jan 3): Wah Seong Corp Bhd will pay Dutch pipe coating solutions fabricator and installer Bauhuis BV £500,000 (RM2.72 million) as part of a settlement agreement, bringing an end to arbitration proceedings in London between the two parties.

The settlement follows an outstanding payment claim of €3.9 million by Bauhuis against Wah Seong’s indirect wholly-owned subsidiary Wasco Coatings HK Ltd.

The claim was for the supply of pipe-coating equipment to be installed and commissioned by Bauhuis at a pipe manufacturing plant in Regina, Canada, under a contract signed in 2015.

Wasco in turn filed a counter-claim of US$20.57 million against Bauhuis for alleged cost overruns and delays.

Last November, Wah Seong said Bauhuis had delayed in the delivery of the equipment or obtaining the Canadian Standards Association approval for pipe coating equipment.

It said some of it required modification because it did not meet the specifications stated in the 2015 contract.

Wah Seong alleged that Bauhuis did not deliver all the equipment to Wasco while some were defective or not fit for the purpose, which resulted in additional cost, and losses. It also delayed the start-up of its pipe coating operations.

The caused a dispute between Wasco and Bauhuis over the payment in light of the various breaches of the contract, followed by the arbitration.

In a filing with Bursa Malaysia today, Wah Seong said both Wasco and Bauhuis have entered into a settlement agreement  with Wasco agreeing to a full and final settlement of £500,000 to Bauhuis.

Wah Seong said once the agreement is executed and the settlement is received by Bauhuis, the latter would instruct its solicitor to write to the London Court of International Arbritration to suspend the arbitration proceedings.

Wah Seong’s share price climbed 22 sen or 20.18% to RM1.31 today for a market capitalisation of RM1.01 billion. The stock has gained 60.74% in a year, and is at its highest level since May 2015.