PUTRAJAYA (June 10): The government has lost its bid at the Court of Appeal to have Prestariang Bhd's RM733 million legal action be converted from an originating summons (OS) into a writ.

Prestariang filed the action to claim the amount from the government in 2019 following the termination of the national immigration control system (SKIN) project.

An OS is a simpler and swifter method to resolve legal disputes as it would be determined based on affidavits filed, as compared to a writ where it is a civil action involving substantial disputes of fact and normally witnesses would be called to court to testify and be cross-examined by the other side.

With the appeals court's decision today to dismiss the government's application, the matter will proceed for trial at the High Court in Kuala Lumpur from July 1 to 3.

"The bench is unanimous that there is no merit in the appeal. The appeal is dismissed," said Justice Datuk Lau Bee Lan.

The other members on the bench were Justices Datuk Lee Swee Seng and Datuk Hadhariah Syed Ismail.

The court also ordered the government to pay RM2,000 in costs to Prestariang.

Senior federal counsel Abdul Hanir Hambali told the court that the government was disputing the entire amount in the formula calculated by Prestariang, and as such it was appropriate that the OS be converted into a writ when the matter goes on trial.

"The formula [of calculating damages in Prestariang] is not acceptable as it does not test on work done," he said, stressing that the quantum sought was unreasonable according to that formula.

"The amount is exorbitant and in our view it constitutes a penalty [on the government]. For this reason, we would be calling our expert witnesses and also we would like to cross-examine their witnesses," he added.

Prestariang's counsel Datuk Lim Chee Wee said liability in this case was undisputed and the rightful quantum was the only issue to be determined.

"The quantum can be assessed based on affidavit evidence with cross-examination if necessary. We are allowing our witnesses to be cross-examined and hence there is no reason to change into a writ," he added.

Citing case laws in a Singapore case, Lim said alleged disputed facts alone were not enough for conversion from an OS to a writ.
 
He submitted that there was no error in the High Court judge's decision.

Prestariang had filed its suit through its unit Prestariang SKIN Sdn Bhd. The amount sought was based on the contractual formula provided for in the concession agreement (CA).

Prestariang decided to file the suit as the two sides were unable to reach an agreement on the quantum to be paid by the government after engaging in a few rounds of negotiation.

Prestariang SKIN secured the RM3.5 billion SKIN project in August 2017 from the previous Barisan Nasional government. The project involves a 15-year concession to design and maintain a new immigration and border control system.

On Dec 10 last year, the Pakatan Harapan government announced that the Cabinet had decided to scrap the project in favour of a new system that would save government funds.

The concession involved a three-year build and deployment phase and a 12-year maintenance and technical operation phase. Payment by the government to Prestariang SKIN was to commence upon the full commissioning of the system with an average annual payment of RM294.7 million.

"Prestariang wishes to reiterate [that] its unit has never defaulted on the CA. Despite the agreement for a 15-year concession, the government unilaterally terminated the CA by way of expropriation, which took effect on Jan 22, 2019. Prestariang SKIN strongly believes that the CA was fair and reasonable," the group said in a statement when it filed the suit.