We refer to the announcements dated 16 December 2019, 13 February 2020, 27 March 2020, 22 April 2020 and 12 May 2020.

The Board of Directors of Seal Incorporated Berhad (“SEAL” or “the Company”) wishes to announce that the Company’s subsidiary, SPKL had on 18 May 2020, filed its Reply and Defence to Counterclaim to the Defence and Counterclaim of Wabina Constructions & Engineering Sdn Bhd in respect of Suit No. PA-22NCVC-251-12/2019 in the High Court of Malaya at Penang.

Vide the Counterclaim, Wabina Constructions & Engineering Sdn Bhd ("Wabina") claimed against the SPKL for the following:

1. a sum of RM26,401,538.47 under Final Account Claim dated 20 January 2020;
2. a sum of RM17,500,000.00 as general, aggravated and/or exemplary damages;
3. interest at the rate of 5% per annum on item a and b;
4. cost.

SPKL is disputing Wabina’s Counterclaim on the basis, amongst others, that the Final Account Claim is premature as the dispute resolution process has yet to be fully exhausted whilst the claim for damages is without basis as the Construction Contract had been wrongfully terminated by Wabina themselves.

The matter is fixed for further case management on 20 May 2020.

Furthermore, Wabina had served a Notice of Adjudication pursuant to Sections 7 and 8 of the Construction Industry Payment and Adjudication Act 2012 on SPKL with the intention to refer the following claims to adjudication, namely:-

The progress claim No. 38 under the Notice of Adjudication in the sum of RM21,190,131.97 was submitted by Wabina after the termination of the Construction Contract on 5 August 2019. On 20 January 2020, Wabina submitted the Final Account Claim of RM26,401,538.47 which also includes the sum of RM21,190,131.97 claimed under progress claim No. 38. In the circumstances, there is overlapping and duplicity of the claim for the sum of RM21,190,131.97.

In any event, SPKL has disputed the claim under Progress Claim No. 38 on the basis that Wabina has no contractual basis to submit any further progress payments after the termination of the Construction Contract on 5 August 2019. 

FINANCIAL IMPACT ON THE GROUP

The Claim is not anticipated to have any significant financial and operational impact on the Group’s results for the financial year ending 30 June 2020,  as a  provision of RM8,775,000.00 has been provided and accounted for in the financial statements year ended 2019. The balance progress claim of RM17,626,538.47 claim is under the dispute process and is not yet due and the Company has been advised by its solicitors that the Final Account Claim ought to be referred to arbitration for determination, hence no provision is made at this juncture.

The Company is seeking the necessary legal advice to resolve and/or defend against the claim by Wabina to ensure that the rights and interests of the Company are protected.

Further material development on the matter will be announced accordingly.

This announcement is dated 19 May 2020.