Green Packet seeks arbitration against MYTV

TheEdge Tue, Mar 19, 2019 09:28pm - 5 years View Original


KUALA LUMPUR (March 19): Green Packet Bhd announced today it has requested to commence arbitration proceedings against MYTV Broadcasting Sdn Bhd, confirming an article in The Edge Malaysia for the week of March 18-24, 2019, that the two parties are embroiled in a contract dispute.

In an exchange filing today, Green Packet said the request was filed with the Asian International Arbitration Centre on March 13, in connection with MYTV's abrupt termination of an agreement inked between the companies for the supply of set-top boxes (STB) to MYTV. The deal was signed in January last year.

Green Packet said MYTV had placed an order with the company for 1.6 million STB units, through purchase orders from in December 2017 and January 2018.

The first batch of 200,000 STB units were supplied and delivered by the company to MYTV between Jan 21 to 24 last year. The remaining 1.4 million STB units were required to be supplied after the shipment and delivery dates had been discussed and agreed in writing between both parties.

However, Green Packet said MYTV abruptly terminated the agreement on Nov 23, 2018, by issuing a termination notice.

Green Packet said it had disputed and rejected the termination notice on Dec 12, 2018, and is now claiming in the arbitration, damages and a declaration that the termination of the agreement is invalid, void and unlawful.

The damages Green Packet sought include RM21 million for the first batch of the 200,000 STB units which it said it had delivered to MYTV, and RM105.84 million for the confirmed order of the remaining 1.4 million units.

MYTV should also pay for the remaining two million STB units under the agreement, said Green Packet, besides costs of the arbitration proceedings, interests, and other futher reliefs.

In response, MYTV has counter claimed against Green Packet for breach of contract, and is seeking as relief RM120.96 million for the 1.6 million replacement STB units, as well as liquidated ascertained damages for each day of the delay.

This is in addition to the sum of RM73.84 million for the 900,000 units of STBs that MYTV said it had to source out from a new supplier, as well as costs of US$300,000 that it said had spent on the purchase of additional tooling to increase capacity and expedite delivery schedule, amongst others.

Green Packet said it is denying and refuting all of MYTV’s allegations of liability and claims for damages.

“In consultation with the company’s solicitors, the company is of the view that it has good claims in this matter.

“The arbitration proceedings are not expected to have a material impact on the earnings per share and the net assets per share of the Company for the financial year ending Dec 31, 2019,” read Green Packet’s filing today.

Shares in Green Packet closed three sen or 8.57% lower today at 32 sen, for a market capitalisation of RM240.32 million.

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