CEO Morning Brief

Pestech Files Counterclaim Against YTL Unit in Gemas-JB Double Track Dispute

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Publish date: Wed, 29 May 2024, 10:42 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (May 28): Pestech International Bhd (KL:PESTECH) has filed a counterclaim against Syarikat Pembinaan Yeoh Tiong Lai (SPYTL) at the Asian International Arbitration Centre (AIAC) over their dispute arising from the termination of a subcontract for electrification system works pertaining to the Electrified Double Track project from Gemas to Johor Bahru.

SPYTL is the wholly-owned construction arm of YTL Corp Bhd (KL:YTL).

In a filing with Bursa Malaysia, Pestech said it had, together with its subsidiary Pestech Technology Sdn Bhd (PTECH), on Monday submitted their defence and counterclaim to the arbitration notice filed by SPYTL in October 2023.

"PTECH is seeking a set-off against all amounts claimed by SPYTL and has further filed a counterclaim against SPYTL for reliefs in respect of the issues arising from the termination of subcontract dated Dec 18, 2018 entered between SPYTL and PTECH for the electrification systems works of the Electrified Double Track from Gemas to Johor Bahru," Pestech said.

Pestech acted as a guarantor to guarantee the due performance of the subcontracting agreement dated December 2018 entered between SPYTL and PTECH for the maintenance of the train project.

Pestech previously claimed that the subcontract was unlawfully terminated on May 10, 2023, with the disputes arising therefrom presently being referred to in an arbitration proceeding under the AIAC.

On top of the arbitration, various suits have also been filed at the High Court, Pestech previously said.

It is worth noting that TSR Capital Bhd (KL:TSRCAP) unit TSR Bina Sdn Bhd has also filed an arbitration claim against SPYTL over disputes arising from the same train project. TSR Bina also claimed that its subcontract with SPYTL was wrongfully terminated. This arbitration is still ongoing.

Shares in Pestech rose 0.5 sen to 20 sen on Tuesday, giving the company a market capitalisation of RM193.48 million. Meanwhile, YTL Corp dropped two sen or 0.54% to close at RM3.69, for a market capitalisation of RM40.78 billion.

Source: TheEdge - 29 May 2024

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