*The story has been updated for accuracy, with clarifications from SPYTL*
KUALA LUMPUR (May 21): The Federal Court has ruled in favour of TSR Capital Bhd (KL:TSRCAP) in its dispute with Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (SPYTL) over payments withheld following the termination of a sub contract for the electrified double-track project from Gemas to Johor Bahru.
In a filing with Bursa Malaysia on Tuesday, TSR Capital said the Federal Court had dismissed SPYTL’s leave applications in the suit. SPYTL, also known as YTL Construction, is the wholly-owned construction arm of YTL Corp Bhd (KL:YTL).
Hence, TSR Capital's wholly-owned TSR Bina Sdn Bhd will receive the other half of the adjudicated sum of RM1.11 million (plus other costs) that was previously awarded to the company. This has been placed with TSR Bina's solicitor as stakeholder, pending the disposal of the applications.
The RM307 million contract was terminated in 2019, following which TSR Bina initiated arbitration proceedings against SPYTL that same year, claiming that the latter had wrongfully terminated the subcontract following a dispute, and claimed about RM35 million from SPYTL. In response, SPYTL made a counterclaim against TSR Bina for about RM22 million. This arbitration is still ongoing.
Concurrently, TSR Bina had refered the payment of certain interim certificates that were withheld following the termination of the subcontract to adjudication under the provisions of the Construction Industry Payment and Adjudication Act 2010. The adjudication decision was issued in favour of TSR Bina in 2020.
While SPYTL managed to set aside this adjudication decision at the High Court, the Court of Appeal (COA) subsequently affirmed TSR Bina's right to enforce the award in October 2023. The Federal Court's decision upholds the COA's ruling.
"SPYTL wishes to clarify that the dispute regarding the termination of the sub-contract between SPYTL and TSR Bina that was referred to arbitration in 2019 has not been determined at this juncture. The arbitration proceedings are on-going and an arbitral award has not been issued to-date," SPYTL clarified in a statement.
"The Federal Court’s decision on May 21, 2024 pertains solely to the leave to appeal and enforcement of an adjudication decision under the Construction Industry Payment and Adjudication Act 2010. This decision is not a decision as to the merits of the dispute regarding the termination of the sub-contract between SPYTL and TSR Bina, which is pending arbitration," SPYTL added.
Shares of TSR Capital last closed on Monday at 26 sen, with a market capitalisation of RM45.36 million. On the other hand, YTL's shares closed up one sen, or 0.26%, at RM3.82 on Tuesday for a market capitalisation of RM42.19 billion.