STAR and JAKS Resources dispute to be settled out of court

by TMR

Star Media Group Bhd’s call on a corporate guarantee provided by JAKS Resources Bhd for the delivery of an office tower will be settled out of court after solicitors served an arbitration notice.

In an exchange filing yesterday, JAKS noted the disputes between Star and its subsidiary JAKS Island Circle Sdn Bhd (JIC) will be resolved by way of arbitration, which includes issues arising from the claim made by Star on interest and the call on bank guarantees.

The dispute relates to a sale and purchase agreement reached on Aug 19, 2011, whereby JIC agreed to purchase land and property in Petaling Jaya from Star for RM135 million. In lieu cash, JIC was to build a 15-storey office block known as Tower A in the property located in Section 13 but had delayed the project up to the material date.

Subsequently, on Feb 28 this year, Star served a notice of demand to JIC under the corporate guarantee reached between the two parties on Oct 17, 2013, requiring JIC’s parent company JAK Resources to complete or “cause to be completed” JIC’s obligations under the initial agreement.