KUALA LUMPUR (Sept 25): Ann Joo Resources Bhd received additional award of RM25.21 million from an arbitration against the group's China-based blast furnace supplier.

In a filing with Bursa Malaysia today, Ann Joo said its wholly-owned subsidiary Ann Joo Integrated Steel Sdn Bhd (AJIS) received the award from the Kuala Lumpur Regional Centre for Arbitration's Arbitral Tribunal.

Under the award, Ann Joo said the arbitration respondent — Tangshan Iron & Steel International Engineering Technology Co Ltd — has to pay RM24.1 million for additional cost of production or losses due to late start-up of the Pulverized Coal Injection for the period between October 2011 and March 2012.

The remaining RM1.11 million of the award is for the additional cost of production or losses due to late start-up of the Top Pressure Recovery Turbines for the period between October 2011 and August 2012.

These two awards come with a 6% interest per annum from the date of first notice of arbitration, Feb 28, 2014.

Ann Joo said it expects to recognise an estimated net gain arising from the arbitration awards, including the one announced in August this year, of approximately RM26.7 million, after taking into account the estimated incidental expenses and relevant expenses.

"This will give rise to additional earnings per share of 5.05 sen based on weighted average number of shares as at Sept 17, 2018," the group said.

On Aug 1 this year, Ann Joo announced that it has been ordered by the Arbitration Tribunal to pay US$3.16 million and RMB1.36 million to Tangshan, while the latter was ordered to pay Ann Joo RM4.28 million for failing to complete four items of works under the contract, and US$523,738 for spare parts not supplied.

Tangshan also needs to pay US$22,231 being half of total disbursements and expenses paid by AJIS for fees and other services to Singapore's alternative dispute resolution complex Maxwell Chambers, plus fees for the transcription services.

This arbitration is in relation to a contract where Tangshan is tasked to "Design, Supply, Install, Construct, Supervise, Train, Test and Commission a Blast Furnace Complex comprising Blast Furnace and Auxiliaries, a Sinter Plant and a Raw Material Yard" for AJIS in Penang in 2008.

AJIS had on Aug 18, 2016 filed a statement of claim against Tangshan for a sum of US$16.9 million made up of US$10.2 million damages from Tangshan's delay in completing works under the contract, US$5.47 million for various breaches and non-performance of the contract by Tangshan, and US$1.25 million for the refund of excess or mistaken payment.

On Oct 20, 2016, Tangshan filed its defence and counterclaim for US$43.34 million and RMB8.76 million, "based on various claims under the contract and disputes that have arisen from the execution of the project".

Ann Joo closed two sen or 1.11% lower at RM1.78 today, giving it a market capitalisation of RM957.06 million.

Year to date, the counter has fallen by 53.89% from RM3.86 on Dec 29 last year.