KUALA LUMPUR (July 27): Muhibbah Engineering (M) Bhd's indirect joint venture (JV) unit, Monadelphous Muhibbah Marine JV (MMM JV), is settling its payment dispute with the Wiggins Island Coal Export Terminal Ptd Ltd (WICET), in Australia.

Muhibbah Engineering's wholly-owned unit Muhibbah Construction Pty Ltd holds a 50% interest in MMM JV.

In a bourse filing today, Muhibbah Engineering said both parties had agreed to resolve all claims relating to contracts performed on the Wiggins Island Coal Export Terminal Project in Gladstone, Queensland. The agreement, however, remains subject to third party approvals.

"The board views that this agreement is in the best interest of the joint venture. As the terms of this agreement are confidential, the final financial impact will be assessed accordingly at a later date," said Muhibbah Engineering.

It was reported in June last year that WICET had filed a claim in the Supreme Court of Queensland against MMM JV. The claim had named the MMM JV partners as defendants, as well as the respective parent companies.

Muhibbah Engineering had said then the claim relates to two MMM JV contracts and associated costs totalling approximately AU$130 million (about RM397 million) in relation to the project, a majority of which was paid to MMM JV under the Building and Construction Industry Payment Act 2004 (Qld) (BCIPA), and variations previously approved by WICET.

Muhibbah Engineering was also reported as saying that the claims submitted by WICET were "unwarranted", and the company had also said then that it would "vigorously" defend the proceedings.

It then filed a counterclaim through the JV in excess of AU$200 million against WICET.

Muhibbah Construction entered into the JV with Monadelphous Engineering Pty Ltd for the construction of the approach jetty and ship berth, as well as shiploader, for the Wiggins Island Coal Export Terminal at Gladstone.

At 4.17pm Muhibbah Engineering shares were down 1 sen (0.44%) to RM2.25 for a market capitalisation of RM1.08 billion.