Analyst Research Report Snapshot

Title:

Flash Note – Gamuda (BUY, maintain) / WCT (BUY, maintain) - Arbitration award against another Gamuda JV

Price:

$23.00

Provider:

Affin Investment Bank

Date:

21 Apr 2013

Pages:

3

Type:

AcrobatPDF

Companies referenced:

WCTE.KL GAMU.KL

Available for Immediate Download
Summary:

Arbitration award against Gamuda-WCT JV on Dukhan Highway claims Gamuda and WCT separately announced that with regard to the Request For Arbitration by Bahrain Asphalt Establishment B.S.C (BAE), the Arbitration Tribunal pursuant to the International Commerce of Commerce Rules of Arbitration has awarded BAE, and the 51:41 Gamuda-WCT Joint Venture, Qatar shall pay BAE, the following:- (i) QAR45.7m (approximately RM38.1m) being the sum of QAR55.7m less the sum of QAR10.0m which the JV is entitled to in respect of its counter claim; and (ii) QAR17.1m (approximately RM14.3m) as legal and other costs and US$0.4m (approximately RM1.3m) for arbitrators’ costs. BAE was appointed as the sub-contractor in Feb 2006 for the granular sub-base and flexible pavement works for the JV’s project known as “Dukhan Highway From Shahaniya to Zekreet” (secured by the JV in July 2005 for a contract sum of QAR750m or approximately RM784m), which involved the construction of a 43 km new highway from Shahaniya to Zekreet in Qatar. In their Request For Arbitration, BAE had sought a total quantified sum of QAR109.3m (approximately RM101.1m) comprising:- (a) QAR94.9m for alleged prolongation, escalation, collateral and associated costs for 728 days’ delay in completion of the sub-contract works; (b) QAR13.4m for alleged Gabbro Aggregate overcharge/wrongful deductions; (c) QAR1.0m for alleged wrongful deduction for supply of bitumen; and further unquantified sums for legal costs, arbitration costs and interest.

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