KUALA LUMPUR (March 8): E.A. Technique (M) Bhd said today that it has reached a US$25.5 million settlement (RM104.74 million) with Malaysia Marine and Heavy Engineering Bhd (MHB) over their dispute concerning a 2015 floating storage and offloading (FSO) conversion project.

EA Technique had in November 2020 lost the arbitration and was instructed by the Arbitration Tribunal to pay MHB US$29.52 million (RM121.93 million at the time), and costs of RM4.69 million with interest.

Today, EA Technique said in a bourse filing that it has executed a settlement agreement with MHB, where the latter accepted the US$25.5 million sum as full and final settlement between the parties.

Both parties have also agreed, without admission of liability, to settle the disputes and differences that have arisen between themselves, the filing said.

“Further announcements will be made in respect of any material development thereof,” the filing added.

EA Technique has already made provisions that amounted to RM42.6 million in its latest financial quarter ended Sept 30, 2020 (3QFY20) for the arbitration award to MHB.

The dispute between the two parties was over a contract dated June 9, 2015, under which MHB was appointed to convert a vessel owned by EA Technique into an FSO vessel to be deployed in the North Malay Basin offshore Kelantan.

However, disagreements arose later in relation to additional work and variation orders under the contract, with MHB claiming EA Technique had failed to pay for some work done.

EA Technique shares slid half a sen or 2.33% to close at 21 sen today, valuing the vessel operator at RM111.4 million. MHB rose 3 sen or 6.19% to close at 51.5 sen, for a market capitalisation of RM824 million.