Introduction
This announcement is now made pursuant to the announcements made on 25 November 2022, 1 December 2022, 10 May 2023, 15 May 2023, 16 May 2023, 30 May 2023, 16 June 2023, 27 June 2023, 10 July 2023, 12 July 2023 and 5 October 2023.
The Board of Directors of Cahya Mata Sarawak Berhad (the "Company" or "Cahya Mata") wishes to announce that Syarikat SESCO Berhad ("SESCO") had, through their advocates, filed a Notice of Arbitration dated 24 November 2023 ("Cahya Mata & SESCO Arbitration") and also served the said notice on Cahya Mata today.
Background Information
There is an ongoing arbitration between a subsidiary company of Cahya Mata, Cahya Mata Phosphates Industries Sdn Bhd ("Phosphates") [formerly known as Malaysian Phosphate Additives (Sarawak) Sdn Bhd] and SESCO regarding the Power Purchase Agreement dated 15 January 2019 ("PPA") between SESCO and Phosphates. The evidentiary hearing has been fixed on 26 August 2024 to 30 August 2024 before the Arbitral Tribunal in AIAC Arbitration No. AIAC/D/ADM-1135-2022 ("Arbitration 1135").
In the interim, the Cahya Mata & SESCO Arbitration is in relation to the Sponsor Guarantee dated 3 May 2019 ("Sponsor Agreement") entered into between Cahya Mata and SESCO wherein Cahya Mata agreed to be a guarantor for 72.83% of Phosphates' obligation under the PPA.
The balance of 27.17% guarantee was via another Sponsor Guarantee dated 3 May 2019 entered between Malaysian Phosphate Additives Sdn Bhd ("MPA") and SESCO, of which a separate Notice of Arbitration also dated 24 November 2023 ("MPA & SESCO Arbitration") has also been commenced by SESCO against MPA.
In the Notices of Cahya Mata & SESCO Arbitration as well as MPA & SESCO Arbitration, SESCO is seeking relief of RM 81,569,600.00 (or such other sum as the Arbitral Tribunal may determine) against Cahya Mata, whereas SESCO is seeking relief of RM 30,430,400.00 or such other sum as the Arbitral Tribunal may determine) against MPA.
SESCO has also filed a formal request that Cahya Mata & SESCO Arbitration as well as MPA & SESCO Arbitration be consolidated which would mean a joint hearing with Arbitration 1135 before the same Arbitral Tribunal which has been constituted in Arbitration 1135.
The Business, Financial and Operational Impacts of SESCO’s commencement of arbitration
The commencement of the arbitration by SESCO does not affect or cause any impact on any material business, financial or operational impact on the Cahya Mata Group.
Steps Taken
Cahya Mata has appointed several law firms in Malaysia to represent and assist Cahya Mata in the arbitration proceedings. The Company will announce any further developments on the matter as and when they arise.
This announcement is dated 24 November 2023.