KUALA LUMPUR: It has been more than a year since WCT Holdings Bhd’s Dubai office won the arbitration case related to the Nad Al Sheba Dubai Racecourse project, but the terminated project continues to haunt it.
This time, it is one of the subcontractors in the project, China-based Triumpher Steel Construction Group Ltd, that initiated the arbitration process.
WCT Bhd (Dubai Branch) and its joint-venture (JV) partner Arabtec Construction LLC (ATC) face a 107.7mil Emirati dirham (RM130.6mil) claim filed by steel construction contractor.
WCT, whose biggest core business is engineering and construction, announced to Bursa Malaysia on Friday that Triumpher Steel had filed a request for arbitration naming the Dubai branch office and ATC as respondents.
WCT’s Middle East regional office in Doha, Qatar, received on Monday this week the request for arbitration dated Feb 27 from the Dubai International Arbitration Centre (DIAC).
In the announcement to the exchange, WCT explained that Triumpher Steel was given a subcontract to undertake certain steel-related works for the racecourse project, in which the 50:50 JV between ATC and WCT was the main contractor.
WCT said Triumpher Steel’s subcontract was terminated back in 2009.
The Zhejiang-based contractor is claiming from the JV 107.7mil dirhams being the alleged sum due pursuant to and under the subcontract, plus further unquantified sums for legal costs, arbitration costs, and interest.
WCT said it would take the necessary legal actions to defend itself and to oppose the claims.
To recap, WCT’s JV with ATC was awarded the deal to build the Nad Al Sheba Racecourse by Meydan Group LLC back in September 2007 for a contract sum of about 4.6 billion Emirati dirhams (RM5.6bil).
The Meydan Group, however, cancelled the construction contract, covering the main building works, external works and infrastructure works, about a year later.
In July 2015, DIAC ruled that Meydan’s cancellation and purported termination of the contract was unlawful, invalid and of no effect.
The tribunal ordered Meydan to pay WCT (Dubai Branch) 1.153 billion Emirati dirhams (RM1.4bil).
At the time, investors thought the arbitral ruling had brought an end to WCT’s legal issues related to the Nad Al Sheba Dubai Racecourse. Kenanga Research even suggested then that WCT could use the 1.153 billion-dirham award to reward shareholders and pare down borrowings.
Read more at http://www.thestar.com.my/business/business-news/2017/03/11/wct-and-partner-hit-by-rm130mil-claim-linked-to-dubai-racecource-project/#eaEdpiFLobVbBVVY.99