KUALA LUMPUR (July 27): Muhibbah-LTAT JV Sdn Bhd has been awarded RM13.97 million after the arbitrator ruled in favour of the unit in the arbitration proceedings against the Malaysian government.

Muhibbah Engineering (M) Bhd, which owns 51% in the joint venture (JV) unit, said the sum awarded pertains to final claims, costs, finance charges and disbursements in relation to the project, and is payable within the next four weeks, failing which interest at a rate of 5% per annum will be imposed.

"This award has a positive financial impact to the MEB Group (Muhibbah Group) and the board is of the opinion the said award is in the best interest of the MEB Group," it said in a bourse filing today.

The government had, in 2001, vide the Ministry of Defence, appointed Muhibbah-LTAT JV, a collaboration between Muhibbah and Lembaga Tabung Angkatan Tentera (LTAT), as the contractor for the construction and commissioning of the Royal Malaysian Naval Base at Teluk Sepangar, Kota Kinabalu, Sabah. LTAT owns the remaining 49% stake in the JV unit.

The project was completed in 2007. However, there were claims arising from the project that were yet to be paid by the government.

In February 2012, Muhibbah-LTAT JV commenced arbitration against the government for the claims, which it had said then amounted to approximately RM26 million.

At 3.54pm Muhibbah shares were down 1 sen (0.44%) to RM2.25 for a market capitalisation of RM1.09 billion.