1. Introduction

The Board of Directors of Uzma wishes to announce that the Company's wholly-owned subsidiary, Uzma Engineering Sdn Bhd (“UESB”) has received Notice of Arbitration under the Singapore International Arbitration Centre Rules 2016 dated 1 March 2022 (“Notice of Arbitration”) issued by KHAN Co., Ltd. (“KHAN”) through its solicitors, Messrs Zaid Ibrahim & Co which was served on UESB on 2 March 2022.

2. The arbitration claim

The Notice of Arbitration is in respect of a disputed amount of USD 1,090,218.01 pursuant to Letter of Award dated 24 August 2016 reference THFFSB/ITB/KINABALU/2016-004 (“Letter of Award”) entered into between UESB and KHAN for the Provision of Manpower, Materials, Consumables, Machinery including Marine Spreads for the Completion of Carry Over Work (Offshore) Complete with Novation of Project Materials for KNPG-B Phase II Kinabalu Non-Associated Gas (NAG) Development Project (“KNAG Project”).

The amount claimed by KHAN against UESB is as follows: -

a) Payment for the sum of USD 1,090,218.01;

b) Costs;

c) Interest at 5% per annum form due date of payment until date of actual payment of the same; and

d) Such further or other reliefs that the Arbitral Tribunal may deem fit.

KHAN previously had initiated adjudication proceeding over the same disputed amount under the CIPAA 2012 against UESB and the adjudication decision was given in favour of KHAN by the Adjudicator on 18 November 2019.

Subsequently the adjudication decision was set aside by the High Court of Malaya in Shah Alam on 30 June 2020.

3. Risk factors

The Company has engaged solicitors to advise UESB in relation to the Notice of Arbitration and is currently assessing the risk and possible contingent liabilities against the Company as UESB is a major subsidiary of the Company.

As it is still at the very preliminary stage of the arbitration, no arbitrator has been appointed and no date has been set for the Arbitration hearing.

UESB will be contesting the Notice of Arbitration as UESB has already filed a High Court Civil Suit No.: WA-22C-24-03/2021 against Khan and another company, Kong Offshore Malaysia Sdn Bhd (“Kong”) in March 2021. In this suit, UESB is claiming sums totalling RM63,135,051.46 against both Khan and Kong in relation to the KNAG Project.

4. Financial effects

The expected losses arising from the Arbitration proceedings are the expenses in engaging solicitors to address the Arbitration proceedings and the costs of the arbitrators and Arbitration proceedings.

The Company will make further announcements of any material development on this matter from time to time. 

This announcement is dated 4 March 2022.