KUALA LUMPUR (Aug 6): The Malaysian Arbitral Tribunal has dismissed Kebabangan Petroleum Operating Co Sdn Bhd's (KPOC) claim against Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) for alleged loss of revenue totalling RM28.03 million.

However, in its final award, the Arbitral Tribunal ordered MHB to pay KPOC a higher sum of RM28.09 million as damages for the cost expenses incurred by KPOC and for the latter's legal fees and expenses.

It is worth noting that when the claim was first made, KPOC indicated alleged loss of RM125.1 million and claimed that it continued to suffer losses. Subsequently, as part of its closing submissions dated March 9, KPOC identified its claim amount as RM58.9 million.

"MHB is advised that it has legal grounds to challenge the final award and is considering further action," it said in a filing with Bursa Malaysia today.

It added that the final award will not have any impact on its operations.

To recap, the dispute arose when KPOC on March 18, 2019 claimed that MHB was in breach of the express and/or implied terms of a contract in respect of the supply of certain valves.

Under the contract, MHB was to carry out and complete certain works for KPOC, including to construct the Kebabangan field topsides and associated appurtenances. Located about 135km north-west of Kimanis, Sabah, the Kebabangan platform was developed as a hub for development of deepwater oil and gas (O&G) assets in north Sabah.

According to MHB, the works were completed in June 2014.

At today's noon market break, shares in MHB were unchanged at 42.5 sen apiece, giving the company a market capitalisation of RM680 million.