Zelan Berhad (“Company”) would like to announce that its wholly owned subsidiary, Zelan Construction Sdn Bhd (“the Claimant”) has initiated arbitration proceedings against Landasan Kapital (M) Sdn Bhd (“the Respondent”) on 25 March 2019 in respect of the disputes and differences arising between the Claimant and the Respondent in relation to a project known as Cadangan Pembangunan Pusat Asasi Universiti Islam Antarabangsa Malaysia (“IIUM”) Di Mukim Hulu Lepar, Daerah Kuantan, Pahang Darul Makmur Fasa 3 – Bangunan-Bangunan Akademik Dan Kolej-Kolej Kediaman (“Project”).

The Claimant claims against the Respondent is premised on breach of contract by the Respondent under the Contract Agreement dated 21 August 2013 (“Contract”) entered into between the Claimant and the Respondent. The Claimant, inter alia, seeks the following reliefs against the Respondent:-

(a)    declaration that the Respondent has breached the Contract by failing to carry out its obligations under the Contract;

(b)    declaration that the Respondent has failed to achieve practical completion of the works in accordance with the Contract;

(c)    declaration that the Claimant was entitled to step-in as provided under Clause 40A of the Contract;

(d)    declaration that the Certificate of Practical Completion was issued as a result of the Respondent’s fraudulent and/or negligent misrepresentation;

(e)    payment for direct costs, losses, expenses and/or damages for which the Claimant has incurred pursuant to the Claimant’s measures to prevent or minimize the Respondent’s delay through step-in exercise as provided under Clause 40A.3(a) of the Contract amounting to RM37,824,539.28;

(f)     costs, losses, expenses or damages arising from or in connection with the Respondent’s delay as provided under Clause 40A.3(b) of the Contract;

(g)    payment for the refund on value of cost savings to IIUM for items deviated from original specifications amounting to RM5,969,352.20 that results from the breaches committed by the Respondent;

(h)    payment for the cost of joint inspections carried out resulting from the breaches committed by the Respondent amounting to RM121,610.99;

(i)     costs for payment of consultant fee, electricity bills and petty cash amounting to RM4,055,139.14 that incurred as a result of the breaches committed by the Respondent;

(j)     costs for payment of site overhead, accommodation and other operational cost amounting to RM2,402,458.99 that incurred as a result of the breaches committed by the Respondent

(k)    damages suffered by the Claimant for the breach of Contract by the Respondent;

(l)     damages for fraudulent and/or negligent misrepresentation by the Respondent;

(m)   indemnity for all damages, losses and expenses for which the Claimant is held liable under the Project;

(n)    general damages to be assessed or such a sum deemed reasonable by the arbitral tribunal (“Tribunal”);

(o)    liquidated damages or such a sum assessed by the Tribunal;

(p)    all costs of this arbitration, interest (including pre-award interest) and to reimburse all the arbitration and legal costs incurred by the Claimant on a full indemnity basis; and

(q)    any other further directions, order and/or other reliefs that Tribunal deems appropriate.

The Company will make further announcement(s) as and when there are any material developments in relation to the above matter.

This Announcement is dated 25 March 2019.