KUALA LUMPUR (July 20): The Singapore Court of Appeal (CoA) has affirmed that Southern Steel Bhd (SSB) is to receive RM82.57 million from Italian plant maker Danieli & C Officine Meccaniche, but it set aside the RM176.25 million in damages awarded by a Singapore Tribunal.

In a bourse filing on Wednesday (July 20), SSB said the Singapore CoA affirmed the Tribunal’s transfer order, which entailed that SSB’s wholly-owned subsidiary Southern HRC Sdn Bhd (SHRC) transfer a factory plant which Danieli contractually constructed for the former, back to the Italy-based company.

But the court also affirmed a repayment order which comprised a contract price of €92.7 million minus €15 million and RM270 million in the plant’s diminution in value, or approximately RM82.57 million as at July 20, to be made by Danieli to SHRC. The damages of RM176.25 million to be paid to SHRC were set aside, however.

“The net financial impact will be disclosed after due assessment. SHRC is currently seeking legal advice on the next course of action, following the decision of the Singapore CoA,” it added.

In 2016, SHRC had terminated the contract for the design, manufacture and supply of a factory plant for the production of hot rolled coils, as well as services agreement with Danieli, pushing the parties into arbitration.

Subsequently, a Singaporean Tribunal in 2019 ruled in favour of SHRC and ordered for the contract and services agreement to be rescinded. It also ordered Danieli to repay SHRC the contract price minus the plant’s devaluation, as well as RM176.25 million in damages.

In return, SHRC would transfer the plant, together with the additional equipment installed thereon, to Danieli.

It was previously reported that SSB terminated the contract as Danieli failed to remedy and resolve issues set out in the notice of termination, after the latter failed to fulfil its contractual obligations.

Shares in SSB ended five sen or 7.14% lower to 65 sen on Wednesday, giving it a market capitalisation of RM387.6 million.