PETALING JAYA: KNM Group Bhd’s wholly owned subsidiary KNM Process Systems Sdn Bhd has issued and submitted a request for arbitration against Lukoil Uzbekistan Operating Company LLC with the Institute of the Stockholm Chamber of Commerce (SCC) in Sweden, seeking for claims and damages in excess of US$96 million (RM393 million).
The request concerns a dispute arising from a contract for the supply of technical documentation and equipment for development of gas-condensate fields Adamtash, Gumbulak and Djarkuduk-Yangi Kilzilcha in Uzbekistan entered into between the claimant KNM Process Systems and the respondent Lukoil on Dec 3, 2010.
Under the contract, the SCC rules shall apply to this arbitration and the seat of arbitration shall be at Stockholm, Sweden.
KNM Process Systems was engaged by Lukoil as contractor for the supply of technical documentation and equipment for development of gas-condensate fields Adamtash, Gumbulak and Djarkuduk-Yangi Kilzilcha.
The original contract price was US$212.11 million and after subsequent addenda for change orders, the final contract price was US$272.03 million.
In commencing arbitration, KNM Process Systems is seeking for claims and damages in excess of US$96 million in relation to unpaid invoices for work done, costs arising from breach of the contract, costs arising from design changes, additional works performed, prolongation of contract and financial losses.
“This arbitration is part of the claimant’s on-going recovery actions to protect and preserve the claimant’s rights and monetary claims under the contract pursuant to all of the claimant’s efforts to resolve the matter in an amicable way with the respondent,“ KNM said.
It said the arbitration is not expected to have any material operational and financial impact on the group’s earnings for the financial year ending Dec 31, 2019 and Dec 31, 2020.
Source: The Sun Daily