This article first appeared in The Edge Financial Daily, on July 27, 2016.

KUALA LUMPUR: The High Court has issued an order restraining Prasarana Malaysia Bhd from appointing another contractor for the Kuala Lumpur Monorail fleet expansion project until the hearing of Scomi Transit Projects Sdn Bhd’s (STP) appeal on Aug 16.

Scomi Engineering Bhd said the court did not extend an interim injunction granted to STP, its wholly-owned unit.

“The court, earlier today, did not extend the interim injunction granted on July 22, 2016. However, it made an order restraining Prasarana from appointing another contractor for the project until the hearing of the appeal,” Scomi said in a filing with Bursa Malaysia yesterday.

The appeal was filed by STP yesterday following the court’s dismissal of its suit against Prasarana.

STP had filed the suit on June 20 after receiving a notice from Prasarana giving STP 14 days to renew a performance bond associated with the project, failing which the contract dated June 3, 2011 will terminate.

Scomi said STP is challenging the termination of the contract.

“On July 21, 2016, STP filed a notice of arbitration for wrongful termination of the contract by Prasarana and will continue pursuing its rights in arbitration.

“STP will also continue to pursue its extension of time and variation order claims pursuant to the Construction Industry Payment and Adjudication Act 2012 and in arbitration and all other claims in line with its entitlements.

“These will mitigate any potential adverse impact on the financial performance of the Scomi group during the current financial year, which may arise from the purported termination,” Scomi said.

The contract is for an upgrade of the Kuala Lumpur monorail stations and the electrical and mechanical system, the construction of a depot and the delivery of 12 sets of new four-car trains.

Scomi said 83% of the project has been completed by STP despite extensive delays beyond its control and ongoing disputes relating to contractor claims.