KUALA LUMPUR (May 12): A subcontractor that provides air conditioning supply and services for the 8 Conlay project has obtained an injunction from the court to restrain the development's former main contractor — Grand Dynamic Builders Sdn Bhd, a wholly-owned subsidiary of GDB Holdings Bhd — from calling on its bank guarantee that was given as a performance bond until the disposal of an arbitration proceeding between the two parties.
High Court judicial commissioner Liza Chan Sow Keng granted the injunction in the presence of both parties on Friday. The subcontractor is Syarikat Ong Yoke Lin Sdn Bhd.
She also ruled that if the arbitration has not concluded by the expiry of the bank guarantee — which was issued by Standard Chartered Bank Malaysia Bhd, Syarikat Ong Yoke Lin's financier — then Syarikat Ong Yoke Lin shall take steps to renew the guarantee.
She also ordered Grand Dynamic Builders to pay RM15,000 as cost to Syarikat Ong Yoke Lin, who was represented by Edward Kuruvilla and Nereen Kaur Veriah. Grand Dynamic Builders was represented by Allen Cheng & Sandhya Saravanan.
Kuruvilla, when contacted by The Edge, confirmed the decision.
Grand Dynamic Builders plans to consult with its solicitors to discuss ways forward and may consider lodging an appeal against the decision by the High Court judge, GDB said in a bourse filing.
Syarikat Ong Yoke Lin has been in arbitration with Grand Dynamic Builders since Jan 3 this year over Syarikat Ong Yoke Lin's claim that Grand Dynamic Builders owed it some RM8 million in certified payments and over RM20 million in recurring costs.
Prior to that, Syarikat Ong Yoke Lin filed a suit last December to seek the injunction to restrain Grand Dynamic Builders from calling on the bank guarantee issued in Grand Dynamic Builders' favour before the disposal of the arbitration.
In its affidavit in support of its injunction application, Syarikat Ong Yoke Lin said Grand Dynamic Builders is obliged to pay it certified sums for work done, but had failed to make such payments.
Instead, it said Grand Dynamic Builders had, without reasonable cause, instructed Syarikat Ong Yoke Lin to suspend its subcontract works for over three months, which resulted in the latter sustaining the recurring costs, which are increasing.
Subsequently, Syarikat Ong Yoke Lin on Dec 19 issued a notice of determination of the contract to discharge its obligations due to the alleged non-payment of sums owed by Grand Dynamic Builders, which the latter is disputing.
Grand Dynamic Builders, meanwhile, had its contract for 8 Conlay terminated by the project's developer, KSK Land Sdn Bhd last month due to failure to achieve agreeable solutions to various disputes relating to the project's construction in the nine months before that. These include the scope of works, construction programme and instalment payments.
In announcing the termination on April 20, KSK Land said it was in talks for a new potential main contractor to replace Grand Dynamic Builders, which is wholly-owned by GDB.
GDB, on the other hand, claimed its unit had been wrongfully terminated, stating that mandatory contractual procedures and notices prior to the determination have not been complied with. It also said KSK had no right to terminate the unit's employment given its continuous breaches of their contract by failing to pay certified sums due and owing to Grand Dynamic Builders.