CEO Morning Brief

Ho Hup to Challenge Adjudication Decision in Favour of Ecobuilt Over Payment Dispute

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Publish date: Wed, 27 Dec 2023, 08:54 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Dec 26): Ho Hup Construction Co Bhd said its unit will challenge an adjudication decision requiring the company to pay RM23.16 million to Ecobuilt Holdings Bhd's wholly-owned subsidiary, Eko Bina Sdn Bhd.

Golden Wave Sdn Bhd, 52.5%-owned by Ho Hup, is involved in a payment dispute with Eko Bina concerning a serviced apartment and commercial units project in Kota Kinabalu, Sabah.

In a bourse filing on Tuesday, Ho Hup said Golden Wave has filed a lawsuit in the Kota Kinabalu High Court seeking to set aside the entire adjudication decision under the Construction Industry Payment and Adjudication Act, citing concerns of natural justice and impartiality.

"The adjudicator has not acted impartially and/or has acted in excess of jurisdiction in ignoring the declaration made by the High Court on July 11, 2023, that the claimed amount is a disputed debt and failing to consider the substantial direct payments already made by Golden Wave to the nominated sub-contractors and nominated suppliers, which would amount to double recovery for Eko Bina," said Ho Hup.

The court has fixed Jan 18 to hear the matter.

Ho Hup said Golden Wave had also initiated arbitration on the dispute with Eko Bina and plans to seek a stay of the adjudication decision pending the arbitration.

Pending the outcome of the proceedings, Ho Hup said there is currently no financial impact on the group's earnings and net assets. There is also no no operational impact to the group.

On Dec 20, Ecobuilt Holdings announced that Eko Bina was awarded RM23.16 million after obtaining an adjudication decision in its favour in the case against Golden Wave.

Golden Wave is also obligated to bear the costs of adjudication of RM61,289 and the legal costs of RM30,000 for Eko Bina.

Eko Bina had initiated legal action over the payment dispute on Aug 10.

Read also:
Ecobuilt unit wins RM23.16 mil in adjudication over construction project payment dispute
Ecobuilt initiates adjudication in construction project payment dispute
Ecobuilt secures RM166.37m construction contract in Sabah

Source: TheEdge - 27 Dec 2023

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