PUTRAJAYA (Oct 9): Wiradani Development Sdn Bhd — a property developer linked to the son of former finance minister Tun Daim Zainuddin — has on Monday settled its dispute in relation to an arbitration award it obtained against SPNB Aspirasi Sdn Bhd, a wholly-owned subsidiary of Syarikat Perumahan Negara Bhd (SPNB). It also withdrew its winding-up petition against SPNB Aspirasi.
The settlement was reached when SPNB Aspirasi’s appeal over the two matters was struck out by a three-member Court of Appeal (COA) bench due to the settlement.
However, the court also recorded that the terms of settlement do not apply to any other matters between the parties arising from the development agreement (DA) and supplementary development agreement (SDA) from the development of a 1.26-acre land in Ampang, in the Hulu Langat district.
The bench, led by judge Datuk Lee Swee Seng and included Datuk Che Mohd Ruzima Ghazali and Datuk Azizul Azmi Adnan, recorded the following terms as part of the settlement:
- Parties agree that the sum of the RM28 million is to be set off against the arbitration award
- SPNB Aspirasi will relinquish all its interests and rights under the DA and SDA
- SPNB will consent to the revocation of the irrevocable power of attorney (on the said land) dated Nov 24, 2014
- SPNB will withdraw its caveat in the land within 30 days of this COA order, and
- Wiradani will withdraw the winding-up petition against SPNB Aspirasi in winding-up petition No: WA-28NCC-553-06.2023 without prejudice and with liberty to file afresh.
SPNB acting chief executive officer Zahanuddin Kamarudin, who was present at the proceedings, informed the bench that SPNB Aspirasi acknowledged the terms.
Settlement proposed by bench
Following that, the three-member bench agreed to strike out SPNB Aspirasi's appeal on the arbitration and the winding-up petition, which Wiradani Development agreed to withdraw.
Lee, in thanking the parties for the settlement, ordered the parties to bear their own costs.
The settlement was proposed by the bench, as SPNB Aspirasi's counsel RK Sharma submitted to the COA that the arbitration award was against the principle of natural justice and would result in unjust enrichment.
Sharma, who appeared with Ho You Wei and Chew Jia Ying, claimed that Wiradani was to absorb the costs of hiring professionals, like architects and engineers, for the project. The counsel further claimed that their appointments were made without SPNB Aspirasi’s approval as they were made prior to the signing of the DA dated Oct 16, 2014.
Sharma further alleged that there is a conflict of interests as the architect appointed by Wiradani for the project before the DA signing is also a director of Wiradani.
Meanwhile, Wiradani's counsel Datuk Seri Rajan Navaratnam maintained the position of the entire arbitration and said his client is willing to hand over the master title to the said land subject to alienation of the 1.26-acre land in question.
Background to the action
Wiradani had offered SPNB Aspirasi the land to build over 1,000 units of service apartment and 20 commercial units on the property and the DA was signed that 2014.
As a result, SPNB Aspirasi paid RM28 million in land costs between Jan 14 and July 15, 2015.
On Dec 12, 2017, SPNB Aspirasi entered into the SDA that required it to pay the development costs as stipulated in the DA and SDA. The SDA also stipulated that should SPNB Aspirasi fail to rectify any default, Wiradani has the right to claim the loss of profit from the project’s development through the DA and SDA.
On July 25, 2019, Wiradani's managing director issued a letter of demand to seek RM2.566 million from SPNB Aspirasi, and on Sept 6 that same year, Wiradani issued a notice of default on SPNB Aspirasi.
A notice of termination dated Sept 26, 2019 was issued, and on Feb 25, 2020, a notice of claim was issued on SPNB Aspirasi amounting to RM33.125 million in damages.
The matter went on arbitration, where arbitrator Datuk N Sundra Rajoo ruled and required SPNB Aspirasi to pay RM28.219 million as loss of profit for the project as well as RM3.289 million for interim payment certificate.
This arbitration was enforced by the Kuala Lumpur High Court in 2021 and a winding-up petition was filed by Wiradani and enforced in June 2023 for not abiding with the arbitration, resulting in Monday’s appeal.
Last month, SPNB Aspirasi reportedly filed a RM134 million suit against Wiradani, its three directors, the architect firm and former CEO and executive director Datuk Ahmad Azizi Ali for conspiracy and fraud, alleging loss of commercial opportunities.
The suit was filed at the Shah Alam High Court. Besides naming Ahmad Azizi, it also alleged that the late SPNB chairman Datuk Ahri Hashim had caused SPNB Aspirasi to enter into a lopsided DA and SDA.