EA TECHNIQUE (M) Bhd had received a payment claim pursuant to Section 5 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) dated Oct 5, 2018, from Malaysia Marine Heavy Engineering Holdings Bhd (MMHE) via its solicitor, Messrs Mohanadass Partnership for a total amount of US$30.22 million (RM125.54 million) on Monday.
In an exchange filing yesterday, EA Technique noted that the CIPAA payment claim is in relation to the disputes over the alleged non-payment for works done by MMHE and invoices purportedly issued by MMHE in relation to the additional work orders under the conversion contract.
EA Technique had entered into an engineering, procurement, construction installation and commissioning (EPCIC) contract with HESS Exploration & Production Malaysia BV on Feb 13, 2015, for the EPCIC of a floating storage and offloading (FSO) facility to be deployed in the full field project in the North Malay Basin, located 150km North East off Kota Baru, Kelantan.
Pursuant to the EPCIC contract, the company, as the owner and MMHE as the contractor executed a contract under which MMHE agrees to undertake the demolition, refurbishment and conversion of a donor vessel into the FSO facility dated June 9, 2015.
EA Technique also noted the CIPAA payment claim is not expected to have any potential business or operational impact on the company.
“At this juncture, the company is unable to determine reliably the financial impact of the CIPAA payment claim as the company is seeking advice and consultation from its solicitor to contest the matter,” it added.