GUH Holdings reaches out-of-court settlement with JAKS joint venture

• GUH said it agreed to the out-of-court settlement, as continuing the legal dispute is costly and time-consuming.

KUALA LUMPUR (July 4): GUH Holdings Bhd said its subsidiary has reached an out-of-court settlement with a unit of JAKS Resources Bhd and a construction firm over its payment claim for work undertaken as a sub-contractor.

GUH’s subsidiary Teknoserv Engineering Sdn Bhd had sued JAKS Sdn Bhd and KACC Construction Sdn Bhd (JAKS-KACC JV) following the termination of the sub-contract.

Teknoserv had been appointed by JAKS-KACC JV as the sub-contractor to construct a new network pumping station and demolition of existing sewerage treatment plants at Jinjang-Kepong, Kuala Lumpur. The sub-contract sum was RM63.5 million on a lump sum basis.

Teknoserv had carried out the sub-contract work from July 2014 until December 2017 and during the extended contract period till August 2021, before bringing the sub-contract agreement to an end in July 2021 over alleged breaches.

In July 2022, Teknoserv served its payment claim for RM22.64 million and thereafter referred the dispute for adjudication against JAKS-KACC JV pursuant to the Construction Industry Payment & Adjudication Act 2012. Teknoserv was awarded an adjudication sum of RM11.49 million plus interests, costs and the adjudicator’s fees.

JAKS Resources subsequently filed an application to stay and set aside the adjudication decision.

In a filing on Monday (July 3), GUH said Teknoserv and JAKS-KACC JV have now agreed to settle amicably, all claims and disputes.

Under the settlement, JAKS-KACC JV is to pay Teknoserv RM9.07 million via seven instalments by Dec 31, 2023.

GUH said it agreed to the out-of-court settlement, as continuing the legal dispute is costly and time-consuming.

“The board made a commercial decision to accept the settlement, as it would enable the company and/or Teknoserv to focus its time and attention on its business operations,” it added.