MATERIAL LITIGATION
PESTECH INTERNATIONAL BERHAD (PESTECH) NOTICE OF ARBITRATION SERVED BY SYARIKAT PEMBENAAN YEOH TIONG LAY SDN. BHD. ON PESTECH PURSUANT TO THE PARENT COMPANY GUARANTEE ISSUED ON BEHALF OF PESTECH TECHNOLOGY SDN. BHD. (PTECH)
PESTECH INTERNATIONAL BERHAD
Pursuant to paragraph 9.04 (g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, PESTECH would like to announce that a Notice of Arbitration dated 18 October 2023 (“Notice”) was served by Syarikat Pembenaan Yeoh Tiong Lay Sdn. Bhd. (“SPYTL”) to the Company under the Asian International Arbitration Centre (“AIAC”) Arbitration Rules 2023 (“Arbitration”).
PESTECH, as the guarantor, has agreed to guarantee the due performance of the Sub-Contracting Agreement dated 18 December 2018 (“Sub-Contract”) entered between SPYTL and PTECH, a subsidiary of PESTECH, for a fixed price, date certain, turnkey engineering, procurement, construction and maintenance contract relating to the electrification systems relating to and for the Project known as the Design, Construction, Supply, Installation, Completion, Testing, Commissioning and maintenance of the Electrified Double Track from Gemas to Johor Bahru.
The aforementioned Sub-Contract between SPYTL and PTECH was unlawfully terminated on 10 May 2023 and the disputes arising therefrom are presently being referred in a separate arbitration proceeding under the AIAC. In that regard, the entire arbitral panel has yet to be constituted as that is still in the process. PTECH has also raised substantial counterclaims against SPYTL. That arbitration follows on from the various High Court suits that have been filed in Court.
In relation to the Notice served on PESTECH, SPYTL is broadly seeking for certain reliefs pursuant to the terms in the Parent Company Guarantee. PESTECH will vigorously dispute such reliefs and will raise a detailed response in the Response to Notice of Arbitration that will be served in due course. This second arbitration is an extension of the ongoing disputes between SPYTL and PTECH.
The financial impact to PESTECH Group cannot be ascertained at this juncture as the reliefs sought will be assessed under the arbitrations.
PESTECH will announce any further developments on the arbitration proceedings as and when they arise.
This announcement is dated 20 October 2023.
