KUALA LUMPUR (Jul 8): WCT Holdings Bhd today won an arbitration case against Meydan Group LLC, which will see the Dubai-based company paying AED1.15 billion (RM1.2 billion) to WCT.
In a filing with Bursa Malaysia today, WCT said the tribunal has passed a judgment in the dispute between its wholly-owned subsidiary WCT Bhd (Dubai Branch) (WCTB) and Meydan regarding the cancellation of the Nad Al Sheba race course project in Dubai, ruling in favour of WCTB.
On February 2009, WCT had initiated arbitration proceedings against Meydan for cancelling a RM4.6 billion contract to build the Nad Al-Sheba Racecourse. The project was awarded to the 50:50 joint venture (JV) between WCTB and Arabtec Construction LLC.
Meydan had cancelled the contract on the basis of alleged breach in the form of non-adherence to the agreed construction schedule. Meydan had also called on the performance and advance payment bonds.
WCT said the tribunal has found that Meydan’s cancellation and purported termination of the contract was unlawful, invalid and of no effect; and Meydan was not entitled to call on the JV’s performance bond and must repay the same.
The RM1.2 billion award comprised claims for work done, repayment of performance bond, loss of profit, damages and interests; arbitration costs; and legal costs.
As at March 31, 2015, the carrying value of performance security deposits and contract receivables under dispute totalled AED318 million (RM330 million).
WCT (fundamental: 0.6; valuation: 1.4) shares closed 9 sen or 6.72% lower at RM1.25 today, giving it a market capitalisation of RM1.59 billion.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)