Court ordered KKMBPB to pay ARB’s solicitors RM850,000

The payment shall be made by way of a bank draft

by SHAFIQQUL ALIFF / TMRpic

PENANG High Court have ordered Koperasi Kampung Melayu Bilik Pulau Bhd (KKMBPB) to pay Ark Resources Holding Bhd’s (ARB) solicitors a sum of RM850,000 for failed joint-venture development.

In a filing to Bursa Malaysia yesterday, ARB said the payment was only by way of a bank draft drawn in favour of the plaintiff’s solicitors, CK Lim Law Chambers, within 14 working days from the date of the court’s order yesterday.

ARB said the aforesaid sum of RM850,000 shall be held by plaintiff’s solicitors as stakeholders pending the plaintiff’s compliance.

The plaintiff shall within five working days, thereafter, withdraw all private caveats which were entered by the plaintiff against the titles to the subject lands mentioned in the Joint Venture Development Agreement (JVDA) dated January 30, 2019.

KKMBPB also have to forward the original copy of the revocation of power of attorney, duly signed by the plaintiff’s authorised signatory, to the defendant’s solicitors.

ARB added that their plaintiff’s solicitors are irrevocably authorised to release the aforesaid sum of RM850,000 to the plaintiff or deal with the said sum in any manner as the plaintiff may instruct.

On Jan 30, 2019, ARB entered into a JVDA with KKMBPB to develop a piece of 36.38ha of land in Balik Pulau, Penang, into a mixed-use development with a minimum gross development value (GDV) of RM600 million.

The JV development of the land is on a sharing basis of 20% on the GDV to KKMBPB and 80% to ARB.

The project includes the development of three lots of land with two-storey retail shop blocks, a bazaar, 276 double-storey terrace houses, 214 double-storey semi-detached houses, 91 double storey bungalows, two 16-storey condominium blocks and two 16-storey low-cost apartment blocks.

However, on March 7, 2019, the Penang Island City Council said that the proposed RM600 million GDV township development in Balik Pulau does not exist because no planning permission application has been received from the developer.

Hence, under clause 4.9 of the JVDA, if the intended rezoning and conversion of land use is not successful, or the intended extension of the lease period is unsuccessful, but both parties have renegotiated the terms and conditions of the JVDA, the JVDA will lapse and come to an end accordingly.

After the termination of the JVDA as stated above, the defendant shall return to the plaintiff the deposit amounting to RM900,000 within one month from the date of termination.

On June 30 and July 20, 2020, the lease extension application was approved by the Penang State Authority but with conditions unacceptable to the plaintiff, and on Oct 5, 2020, the Penang Town and Country Planning Department rejected the rezoning application.

As such, the plaintiff wrote a letter to defendant on Jan 22, 2021, to terminate the JVDA and request a refund of RM900,000, as part of the deposit previously paid.

However, the defendant did not agree to the termination of the JVDA and refused to refund any amount of money to plaintiff.