Reference is made to the Malaysia Marine and Heavy Engineering Holdings Berhad (“MHB” or “the Company’s”) announcements dated 26 June 2018, 2 October 2018, 5 October 2018, 29 May 2019, 31 May 2019, 4 June 2020, 28 October 2020, 12 November 2020 and the material litigation update Note B8 of the Quarterly Results for the period ended 31 December 2020 dated 9 February 2021.

1. INTRODUCTION

MHB's wholly-owned subsidiary Malaysia Marine and Heavy Engineering Sdn Bhd (“MMHE”) had on 27 September 2018 received a Notice of Arbitration from E. A Technique (M) Berhad ("EATech") for a number of claims in relation to the contract for Provision of Demolition, Refurbishment and Conversion of Donor Vessel into a Floating, Storage and Offloading Facility for Full Development Project, North Malay Basin, hereinafter referred to as “the Contract”.

2. BACKGROUND

EATech had, via a Letter of Award dated 9 June 2015 appointed MMHE as the Main Contractor for the Contract.

During the period of the Contract, MMHE issued Additional Work Orders (“AWOs”) to EATech claiming payments for the work done. Disputes and differences have arisen between the parties in respect of the sum arrived under the Invoices and the AWOs.

On 22 June 2018, EATech and MMHE had entered into an agreement via a Letter of Undertaking (“LOU”) in their effort to settle the sums due under the Invoices and the AWOs. The parties were unable to reach an amicable settlement paving the way for both parties to proceed with legal proceedings including Arbitration.

The claims made by EATech in Arbitration are as follows:

a) USD8,733,753.97 being the over payment made by EATech in respect of the Re-measured Contract price;

b) USD9,000,000.00 being the sum paid by EATech under the LOU; and

c) USD4,009,643.75 being the expenses and costs incurred pursuant to the Contract.

MMHE disputed the claims and counter claimed for the AWOs issued, the costs incurred as a result of extensions of time, and legal costs.

3. RECENT DEVELOPMENT IN RESPECT OF THE ARBITRATION PROCEEDINGS

MMHE was informed by its solicitors Messrs Mohanadass Partnership that they received the Final Award dated 10 November 2020 (“Final Award”) on 11 November 2020. Pursuant to the Final Award, the Arbitral Tribunal, amongst others, ordered EATech to pay MMHE a total of USD29,520,172.65 and costs in the sum of RM4,686,398.16 (together with interest at 5% per annum from date of Award to the date of full payment). Under the Final Award, MMHE is not liable to pay any sum to EATech.

Thereafter, EATech mounted several challenges to the Final Award including an application to refer questions of law arising from the Final Award pursuant to s.42 of the Arbitration Act 2005 (“Reference Application”) and an application to set aside the Final Award pursuant to s.37 of the Arbitration Act 2005 (“Setting Aside Application”) to the High Court of Kuala Lumpur.

In parallel, MMHE applied to the High Court of Kuala Lumpur, on an ex-parte basis, for leave to enforce the Final Award pursuant to s. 38 of the Arbitration Act 2005 (“Enforcement Application”). On 15.2.2021, the Final Award was recognised as binding and MMHE was granted permission to enforce the Final Award as a judgment of the High Court in terms of the Final Award (“Judgment”).

On 8 March 2021, the parties entered into a settlement agreement whereby EAT agreed to pay an agreed amount in full and final settlement of the disputes between the parties, subject to MMHE’s enforcement or execution rights to the amount due under the Judgment , less any payments made, in the event of EATech’s default of the settlement terms. The parties also agreed to withdraw all pending Court actions.

This announcement is dated 9 March 2021.