KUALA LUMPUR (April 1): Scomi Engineering Bhd's unit Scomi Transit Projects Sdn Bhd has withdrawn its legal suit and injunction against Prasarana Malaysia Bhd over a decision to terminate the RM494 million KL Monorail expansion contract, after the latter admitted that its two earlier notices were defective.

In a filing with Bursa Malaysia today, Scomi Engineering said Prasarana gave an undertaking to the Kuala Lumpur High Court that they would not be relying on their two notices dated Jan 4 and Feb 18 to terminate the KL Monorail expansion contract, thereby admitting that the two notices were defective.

"Accordingly, the legal suit and injunction were withdrawn without prejudice to Scomi Transit Projects' rights to commence other legal actions or to apply for another injunction or other relief against Prasarana whether in relation to Prasarana's notice dated March 8, the KL Monorail expansion contract and/or the KL Monorail fleet expansion project or otherwise," it said.

On March 1, Scomi Transit Projects had obtained an ex parte injunction against Prasarana, restraining it from wrongfully terminating the KL Monorail expansion contract. This injunction was extended by the Court to March 4 and subsequently to April 1.

Prasarana later issued a notice to remedy to Scomi Transit for its failure to comply with Stage Gate Schedule 2 of the second supplemental contract to deliver 10 sets of new four-car monorail trains, including seven sets for revenue service by Dec 31 last year.

Prasarana said Scomi Transit not only failed to comply with the schedule on the delivery of the trains, it also failed to submit any mitigation plan to remedy the delay as requested by Prasarana on Jan 4.

Scomi Engineering shares closed unchanged at 23.5 sen today, bringing a market capitalisation of RM80.36 million.