KUALA LUMPUR (Feb 3): Tiong Nam Logistics Holdings Bhd’s subsidiary has been ordered to refund part of the sum it won in a legal suit against Lay Hong Bhd’s unit in a dispute over transportation charges.

The order was made by the Court of Appeal after Lay Hong Lay Hong Food Corp Sdn Bhd (LHF) appealed against the RM3.71 million sum awarded to Tiong Nam Logistics Solutions Sdn Bhd (TNLS) by the High Court in April 2016.

In a filing today, Tiong Nam said TNLS has been ordered to refund LHF RM2.63 million.

This sum includes RM274,540 being time barred claim, RM1.56 million being the loss of business due to failure to give six months’ written notice of nomination, and RM470,500 for the loss of the use of five trucks.

TNLS is allowed to retain close to RM1.6 million of the claim paid for services rendered, as well as  RM30,000 out of the RM50,000 costs awarded by the High Court earlier.

Tiong Nam said there is no material financial effect on the group regarding the sum to be refunded to LHF as it was not recognised in the group’s audited financial statements for the financial year ended March 31, 2016 (FY16).

“Full doubtful debts provision has been made in respect of the full amount outstanding on services rendered in the financial statements for FY16,”  it said.

The group added that there is no operational impact to the group, and that it is awaiting written grounds of judgement as well as legal advice before deciding on its next course of action.

Shares in Tiong Nam closed up 5.03% or 8 sen at a two-month high of RM1.67 today. A total of 1.59 million shares had changed hands, leaving the group with a market capitalisation of RM683.64 million.

Meanwhile, shares in Lay Hong were up 4.85% or 4 sen at 86.5 sen on some 6.33 million shares traded. The chicken egg producer has a market capitalisation of RM523.53 million.