KUALA LUMPUR: WCT Holdings Bhd has 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 yesterday, WCT said the tribunal had passed a judgement in the dispute between its wholly-owned subsidiary WCT Bhd (Dubai Branch) (WCTB) and Meydan regarding the cancellation of the Nad Al Sheba Racecourse project in Dubai, ruling in favour of WCTB.
In February 2009, WCT initiated the 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 cancelled the contract on the basis of alleged breach in the form of non-adherence to the agreed construction schedule.
Meydan also called on the performance and advance payment bonds. WCT said the tribunal had 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 comprises claims for work done, repayment of the performance bond, loss of profits, 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. WCT (fundamental: 0.6; valuation: 1.4) shares closed nine sen or 6.72% lower at RM1.25 yesterday, with a market capitalisation of RM1.59 billion.
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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.
This article first appeared in The Edge Financial Daily, on July 9, 2015.