Sumatec ordered to pay Continental claim balance of RM19.6 mil

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KUALA LUMPUR (June 12): Sumatec Resources Bhd has been ordered to pay Continental Industrial Supplies and Services Ltd LLP, its claim balance of US$4.92 million (RM19.66 million).

In a filing with the exchange today, Sumatec said the London Court of International Arbitration has finally awarded Continental Industrial the principal sum of US$4.92 million (RM19.66 million) and its interest of US$1.08 million as at date of award.

The claimant is also entitled to costs incurred amounting to GBP248,943.47 (RM1.33 million) and for the arbitrator cost of GBP48,262.91, including interest at the rate of 5% per annum, compounded at three monthly rests.

In 2013, Continental Industrial entered into a contract for the provision of integrated project management of the Rakushechnoye Oil and Gas Field with CaspiOilGas LLP (COG). COG is a unit of Markmore Energy (Labuan) Ltd and is the concession owner and operator of the Rakushechnoye Oil and Gas Field, located in the Republic of Kazakhstan.

However in 2015, market price of oil plummeted and Continental Industrial was advised to slow down on the contracted works. Continental Industrial then entered into a Parent Guarantee Agreement (PGA) dated May 2, 2016 with Sumatec, in which the company agreed to guarantee payment to Continental Industrial of US$6.09 million or approximately RM24.8 million plus interest.

Pursuant to the PGA, the company had fulfilled partial payment of US$1.18 million or approximately RM5.27 million. Both parties had then commenced arbitration proceedings at the London Court of International Arbitration on the claim of the balance in the PGA.