KUALA LUMPUR (Aug 27): Construction outfit GDB Holdings Bhd (KL:GDB) announced that it has obtained an adjudication decision that is favourable to the group in its dispute with KSK Land Sdn Bhd over payments to be paid following KSK Land’s termination of GDB's unit as a main contractor of the 8 Conlay project.

In a bourse filing, GDB said an adjudicator ruled that KSK Land's unit Damai City Sdn Bhd (DCSB) has to pay GDB's unit Grand Dynamic Builders Sdn Bhd (GDBSB) a total of RM59.32 million as outstanding payment based on a contract between them for construction works carried out, but not paid.

According to the adjudicator's decision dated Aug 20, 2024, the sum comprises RM55.6 million for interim certificates, RM3.55 million in late payment interest and RM161,613 for the costs of adjudication proceedings. Payment is to be made in full by Sept 3, 2024.

This was, however, just a little over half of the RM102.08 million it demanded as outstanding payment from DCSB, based on GDB's initial notice of demand to DCSB in April last year, which DCSB had refused to pay. Subsequently, GDBSB issued a payment claim for the sum and a notice of adjudication to DCSB a month later, as provided under the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012).

GDB’s dispute with KSK Land first started in 2022 over late payments for work done. This was prior to KSK Land terminating GDBSB’s RM1.25 billion contract as main contractor of the 8 Conlay mixed development in April 2023.

The dispute at the time had resulted in GDBSB initiating a lawsuit against DCSB to recover over RM120 million for unpaid work while it suspended work on the project. After DCSB made a partial payment of the sum claimed, GDBSB recommenced work on certain parts of the project in January 2023 and dropped its suit, with liberty to file afresh.

However, problems arose again after DCSB failed to pay an instalment sum in April. When the parties could not reach a settlement, DCSB terminated GDBSB from the job, while GDBSB responded by slapping another suit against KSK Land for the payment of RM102.08 million while seeking adjudication over the matter.

Following its termination from the job, GDBSB also filed a winding-up petition against KSK Land in January this year.

Set up in 2013, KSK Land is the property arm of KSK Group, an investment holding company which is also in the insurance business in Indonesia and Thailand.

GDB's share price closed unchanged at 31 sen on Monday, bringing the group a market capitalisation of RM291 million.