KUALA LUMPUR (May 10): Cahya Mata Sarawak Bhd (CMS) on Wednesday announced that the Asian International Arbitration Centre (AIAC) has denied the application by its subsidiary Cahya Mata Phosphates Industries Sdn Bhd (CMPI) for an interim injunction to restrain Syarikat SESCO Bhd from exercising certain actions relating to the dispute between the parties.

In a Bursa filing on Wednesday, CMS said CMPI has commenced an emergency arbitration with the Director of AIAC against SESCO. CMPI and SESCO had a dispute under the power purchase agreement dated Jan 15, 2019, relating to the sale and purchase of electric power for a phosphate production facility located in Sarawak.

“On May 9, 2023, the emergency arbitrator had denied CMPI's application for interim injunction. However, the top management of Cahya Mata is currently seeking advice from its lawyers to explore further course of action to preserve and enforce all its rights,” said CMS in the filing.

On Nov 29 last year, an arbitrator appointed by AIAC granted an interim injection to CMPI in an emergency arbitration proceeding administered by the centre under its AIAC Arbitration Rules 2021. CMPI, then known as Malaysian Phosphate Additives (Sarawak) Sdn Bhd, had commenced the arbitration on Nov 25, 2022 against SESCO.

“The arbitration proceedings are not expected to have any material business, financial or operational impact on CMS group,” said CMS.

Meanwhile, CMS did not disclose any details on why the application was denied.

CMPI is a joint venture company following a strategic alliance between CMS’s subsidiary Samalaju Industries Sdn Bhd (SISB), Malaysia Ventures Sdn Bhd and Arif Enigma Sdn Bhd, for an investment in an integrated phosphate complex, CMS’s 2021 annual report showed.

CMS shares settled one sen or 0.9% higher at RM1.12 on Wednesday, bringing the group a market capitalization to RM1.2 billion.