Kelington in arbitral proceedings over alleged outstanding payment for construction job

• Kelington disputed the claim in June 2021 and decided to counterclaim against JCT for an outstanding sum of RM6.27 million.

KUALA LUMPUR (April 23): Kelington Group Bhd said it is seeking an alleged outstanding payment of RM6.27 million in arbitral proceedings relating to a construction job it had undertaken in Kedah.

In a bourse filing, the engineering services provider said it had on Monday served a statement of case to JCT Industries Group Sdn Bhd, which had in 2018 appointed the group to build a factory and warehouses in Kuala Muda.

According  to Kelington, the work was completed in August 2019. However, Kelington received a notice of arbitration from JCT in November 2020 claiming that the group had failed to complete the work within the completion timeframe as stipulated in the contract. Kelington disputed the claim in June 2021 and decided to counterclaim against JCT for an outstanding sum of RM6.27 million.

JCT withdrew its notice of arbitration in August 2022 "in order for both parties to resolve all the disputes as soon as possible via commencement of fresh arbitration proceedings." Subsequently, Kelington initiated the new arbitral proceeding against JCT within the same month.

In its filing on Monday, the group said the statement of case is not expected to have any material financial and operational impact on the group for the financial year ending Dec 31, 2024 (FY2024).

For FY2023, Kelington reported a net profit of RM102.65 million, nearly double the previous year's RM55.75 million. Its revenue rose 26% to RM1.61 billion from RM1.28 billion, due to increased project recognition across Kelington's key operating markets, significant process engineering projects in Malaysia, and heightened sales of liquid carbon dioxide and other gases.

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