Star Media's dispute with JAKS Resources goes back to High Court six years after it started

• A three-member Federal Court bench on Thursday unanimously dismissed Star Media Group’s appeal against a decision unfavourable to the media company issued by the Court of Appeal in 2021 — which set aside a prior High Court's summary judgement in 2020 for JAKS to pay RM134.5 million balance of the purchase price of the land and RM50.54 million in late payment interest, and upheld the appellate court's order for the matter to go back to trial at the Kuala Lumpur High Court.

PUTRAJAYA (March 7): The legal dispute between Star Media Group Bhd and JAKS Resources Bhd on the development of a parcel of land in Section 13, Petaling Jaya, has been reverted back to the High Court for trial.

A three-member Federal Court bench on Thursday unanimously dismissed Star Media Group’s appeal against a decision unfavourable to the media company issued by the Court of Appeal in 2021 — which set aside a prior High Court's summary judgement in 2020 for JAKS to pay RM134.5 million balance of the purchase price of the land and RM50.54 million in late payment interest, and upheld the appellate court's order for the matter to go back to trial at the Kuala Lumpur High Court.

“The court finds no merit in the appeal... The appeal is dismissed with costs,” said Federal Court judge Datuk Zabariah Mohd Yusof, who led the bench, as she delivered the oral judgment after hearing the oral submissions from both sides in the case.

The bench also ordered Star Media to pay RM150,000 as costs to JAKS Resources and its subsidiary, while the case will proceed to High Court for trial on Aug 25, 2025.

The legal dispute, which started six years ago, is over Star’s divestment of the land in 2011 to JAKS, in return for the construction of a 15-storey office tower on the land.

JAKS’s unit JAKS Island Circle Sdn Bhd (JIC) committed to a RM50 million bank guarantee to assure the completion and delivery of the office tower. On top of that, JAKS provided its own corporate guarantee in favour of Star Media. But JAKS allegedly missed the deadline in delivering the office tower, with the delay lasting 28 months.

Star Media made a demand for the bank guarantee in 2018, claiming that JIC had failed to deliver the office tower, which the latter disputed. But it later released the sum to Star Media in January 2019.

Star Media, however, still brought the matter to court by filing a suit against JAKS on April 30, 2019, claiming JAKS had failed to perform its obligation under its corporate guarantee for JIC to deliver the office tower. Star Media wanted RM134.5 million from JAKS as the balance purchase price for the land, along with late payment interest of RM43.22 million.

JAKS then filed a counterclaim for the return of the RM50 million bank guarantee, together with RM248.24 million in liquidated and ascertained damages, and to claim RM297.04 million for loss of proceeds from a corporate fundraising as it claimed Star Media's suit against the company had affected its fundraising.

As Star sought preliminary determinations on these suits, both parties made a total of three appeals against decisions not favourable to them, before the Federal Court’s latest decision, which effectively reverted the dispute back to the High Court for trial.

Datuk Dr Cyrus Das, who appeared for Star Media in the case, told the apex court that both High Court judges' decisions in the case — which favoured Star Media — should stand as adjudged or res judicata, on the basis that the High Court judge Datuk Nordin Hassan (now Federal Court judge) at the time had ruled that the proposed completion date and delivery of the tower should be in February 2018, and not June 2020.

Cyrus argued that this was because the sales and purchase agreement for the land was drafted in 2012, with completion date of the building set to be three years after gaining approval from the local authority, which was supposed to be on Aug 16, 2012. But due to five extensions granted to JAKS to complete the project, the final completion and delivery of the project was pushed back until February 2018.

But Datuk Malik Imtiaz Sarwar, who appeared as JAKS's counsel together with lawyer Khoo Suk Yi, said Star Media had requested variations to the building plans, hence amended building plans had to be submitted for approval to the local authority, which delayed the project. JIC, he said, had also issued a letter to the media company to indicate the late delivery of the building was due to the alterations made, as the approval for the amended building plans came only in 2017.

Zabariah, however, said the dispute over the supposed completion date is not the core issue in the case, but rather whether the building was actually completed and delivered.

The other two members of the apex court bench were justices Datuk Hasnah Mohamed Hashim and Datuk Harmindar Singh Dhaliwal.

Disclaimer: The Edge Communications Sdn Bhd, the owner of www.theedgemalaysia.com, holds 5.17% equity interest in Star Media Group Bhd

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