This article first appeared in The Edge Financial Daily on October 25, 2019 - October 31, 2019

KUALA LUMPUR: CIMB Group Holdings Bhd and PLUS Malaysia Bhd, who are joint-venture partners for Touch ’N Go Sdn Bhd, have worked out a settlement agreement that puts an end to their dispute over PLUS’ decision to launch its own toll collection system.

As such, CIMB and its wholly-owned CIMB SI 1 Sdn Bhd will withdraw the suit they initiated against PLUS, as well as discontinue the arbitration proceedings they had sought over the matter, CIMB announced in a stock exchange filing yesterday.

While details of the settlement were not revealed, the group said the settlement will not have any effect on its consolidated net assets and earnings, or its share capital and substantial shareholders’ stake for the financial year ended Dec 31, 2019.

CIMB served a notice for the arbitration to PLUS last Dec 17, when it claimed the latter had breached its obligations under a joint-venture agreement (JVA) in relation to Touch ’N Go by commencing and launching its own PLUS Radio Frequency Identification (RFID) system.

Under the JVA, CIMB holds a controlling 52% stake in Touch ’N Go, while PLUS has a 28% stake and MTD Equity Sdn Bhd holds 20%.

The arbitration had sought for, among others, an injunction to restrain PLUS from engaging in further business of the PLUS RFID system, together with damages, interests and costs.

A day later, CIMB filed an originating summons against PLUS in the High Court seeking to similarly restrain PLUS from its RFID business, pending the disposal of the arbitral proceedings.

At the time, PLUS denied it had breached any agreement. It also said its RFID system would give more choices to the people, and that it was an open payment platform that also allowed the use of Touch ’N Go’s e-wallet and prepaid payment, on top of credit and debit cards.

Following the settlement agreement, CIMB said it will, together with CIMB SI 1 and PLUS, “(a) execute a written notice of discontinuance in the High Court of Malaya in Kuala Lumpur to withdraw the originating summons with no liberty to file afresh and no orders as to costs; and (b) execute a written notice of discontinuance to withdraw the arbitration proceedings.”