KUALA LUMPUR (March 12): Zelan Bhd has initiated arbitration proceedings against NRY Architects for as much as RM305.4 million over the construction of buildings for the International Islamic University Malaysia (IIUM) in Kuantan.
In a filing with Bursa Malaysia yesterday, Zelan said NRY had breached a contract signed in May 2013 with Zelan’s wholly-owned unit Zelan Construction Sdn Bhd.
Apart from seeking a declaration that NRY had breached the contract by failing to carry out its obligations, Zelan is claiming a refund on the value of cost savings for deviation items amounting to RM5.97 million.
It is also seeking payment for IIUM’s claims for rental of temporary facilities, utility bills and other costs from January 2016 to June 2018 amounting to RM38.31 million.
Also sought was payment for loss of income over the same period arising from availability, asset management services and compounding interest charges from financial institutions of some RM261.12 million.
Zelan is claiming for general and liquidated damages as well, to be determined by the tribunal, as well as all costs of the arbitration.
The project involved the third phase of IIUM’s centre in Kuantan, including constructing academic buildings and residential colleges, the group said.
“Both parties have 90 days from the date of the said initiation of arbitration to settle the disputes and differences amicably,” Zelan said. It initiated the proceedings last Friday.
Zelan shares declined one sen to eight sen yesterday, with a market capitalisation of RM67.59 million.
This article first appeared in The Edge Financial Daily, on March 12, 2019.
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