MATERIAL LITIGATION MTD ACPI ENGINEERING BERHAD ("MTD ACPI" or "the Company") (1) SHAH ALAM HIGH COURT ORIGINATING SUMMONS NO. BA-24C-36-05/2020; AND (2) SHAH ALAM HIGH COURT ORIGINATING SUMMONS NO. BA-24C-41-05/2020 BETWEEN SN AKMIDA HOLDING SDN BHD AGAINST MTD CONSTRUCTION SDN BHD
|MTD ACPI ENGINEERING BERHAD|
MTD ACPI ENGINEERING BERHAD ("MTD ACPI" or "the Company") (1) SHAH ALAM HIGH COURT ORIGINATING SUMMONS NO. BA-24C-36-05/2020; AND (2) SHAH ALAM HIGH COURT ORIGINATING SUMMONS NO. BA-24C-41-05/2020 BETWEEN SN AKMIDA HOLDING SDN BHD AGAINST MTD CONSTRUCTION SDN BHD
MTD ACPI wishes to announce that its wholly-owned subsidiary, MTD Construction Sdn Bhd (“MTDC”) had been served with an Originating Summons and Notice of Application both dated 12 May 2020 from SN Akmida Holdings Sdn Bhd (“Plaintiff”) filed at the Shah Alam High Court under Originating Summons No. BA-24C-36-05/2020 (“Suit No. 36”) on 14 May 2020 and an Originating Summons and Notice of Application both dated 14 May 2020 from the Plaintiff filed at the Shah Alam High Court under Originating Summons No. BA-24C-41-05/2020 (“Suit No. 41”) on 18 May 2020.
Suit No. 36 is for an order for an injunction against the calling of the bank guarantee no. 517BG18013088456 dated 8 March 2018 in the sum of RM10,985,000.00 (“Performance Bond”) while Suit No. 41 is for an order for an injunction against the calling of the bank guarantee no. 517BG18031285287 dated 29 March 2018 in the sum of RM7,505,000.00 (“Advance Payment Guarantee”), both issued by Alliance Islamic Bank Berhad in favour of MTDC with respect to a contract entered into between MTDC with the Plaintiff for the Package S208: Construction and Completion of Elevated Stations and Other Associated Works at Equine Park and Taman Putra Damai (“Sub-Contract”) being part of Package V208: Construction and Completion of Viaduct Guideway and Other Associated Works from Taman Pinggiran Putra to Persiaran Alpinia awarded to MTDC for Projek Mass Rapid Transit Laluan 2: Sungai Buloh - Serdang - Putrajaya (SSP).
Pursuant to the Sub-Contract, the Plaintiff had provided the Performance Bond to secure the due performance of the Plaintiff’s obligations under the Sub-Contract, and the Advance Payment Guarantee as security for the provision of advance payment by MTDC to the Plaintiff for the Sub-Contract.
By a letter dated 8 May 2020, MTDC had terminated the appointment of the Plaintiff as the sub-contractor for the Sub-Contract on the ground that the Plaintiff has failed to proceed regularly and diligently with the performance of its obligations under the Sub-Contract, persistently neglected to carry out its obligations under the Sub-Contract and failed to comply with the terms and conditions of the Sub-Contract.
MTDC had issued a notice dated 6 May 2020 and 12 May 2020 to Alliance Islamic Bank Berhad, demanding the pay out of the Performance Bond and Advance Payment Guarantee respectively.
The Court had on 14 May 2020 and 19 May 2020 issued an interim injunction order essentially restraining MTDC from demanding the pay out of the Performance Bond and Advance Payment Guarantee respectively until 28 May 2020.
On 28 May 2020, the Court had directed that both Suit No. 36 and Suit No. 41 to be heard together, but not consolidated and further directed the parties to file its respective submissions with 1 September 2020 being fixed as the decision date.
The Court had also ordered that the interim injunction order dated 14 May 2020 and 19 May 2020 respectively be made an ad interim injunctive order to preserve the subject matter of the disputes, namely the Performance Bond and the Advance Payment Guarantee, until the final disposal and resolution of the Suit No. 36 and Suit No. 41 in the Court.
There is no significant operational impact on MTDC, a sub-contractor has been appointed to take over and complete the remaining works of the Sub-Contract.
MTD ACPI is of the view that save for the orders, costs and other reliefs sought by the Plaintiff, which will materialise only if the Court rules in the Plaintiff’s favour, the litigation will not result in any immediate material financial impact on the Company and the Group as at the date of this announcement.
MTD ACPI will make further announcement as and when there is any material development on the above matter.
This announcement is dated 21 July 2020.
|Company Name||MTD ACPI ENGINEERING BERHAD|
|Date Announced||21 Jul 2020|
|Category||General Announcement for PLC|