KUALA LUMPUR (April 18): UEM Sunrise Bhd has been served a notice of arbitraton by Ireka Corp Bhd’s unit, seeking a declaration sum of RM29.25 million in relation to disputes and differences arising from a contract finalisation.

UEM Sunrise said its wholly-owned subsidiary UEM Land Bhd was served the notice by Ireka Engineering and Construction Sdn Bhd (IECSB) yesterday. This follows the pre-commencement of an arbitration announced in August 2018.

In June 2012, IECSB was appointed by UEM Land as main contractor for the construction of proposed mixed development Imperia located in Puteri Harbour, Iskandar Puteri, Johor, at a contract sum of RM268.6 million.

The project comprises a 35-storey block of serviced apartments with a five-storey car park and recreational facilities and swimming pool, a 16-storey office tower with a three-storey car park, a single-storey commercial block, and a single-level car park in the basement.

According to Ireka, the claims made were premised on the breach of contract and outstanding payment due in relation to the contract.

This includes declarations of final account in the amount of over RM29 million, further extension of time or time at large, loss and expense awards, interest, costs and further reliefs, it added.

In response, UEM Sunrise said “UEM Land’s position is that IECSB’s claims are without merit” and that it will “vigorously defend its position”.

“The company believes that the notice of arbitration, and potential arbitration proceedings, are not expected to have material financial and operational impact on the company for the financial year ending Dec 31, 2019,” it added.

Shares in UEM Sunrise rose one sen to close at 86 sen today, for a market capitalisation of RM3.9 billion.

Ireka shares, meanwhile, were not traded today. The counter was last done yesterday at 55 sen, valuing the group at RM102.69 million.