KUALA LUMPUR – A Paris arbitral tribunal has ruled in favour of energy and environmental solutions company Malakoff Corporation Bhd in its litigation with state-owned Algerian Company SPA (AEC) relating to a seawater desalination plant in Tlemcen, Algeria.
In a Bursa filing yesterday, Malakoff said the final award rendered by the tribunal stated that the public-listed company had not breached any of the provisions under the joint venture agreement dated March 28, 2007, as alleged by AEC.
The tribunal also determined that all of AEC’s claims for liability against Malakoff and water treatment firm Hyflux Ltd, which included claims of damages worth US$394.8 million, are dismissed.
The award also called for Malakoff’s indirect 70%-owned Tlemcen Desalination Investment Company SAS (TDIC) to transfer its shares in Almiyah Attilemcania SPA (AAS) to AEC for one Algerian dinar, in accordance with the framework agreement dated December 9, 2007.
TDIC is said to own 51% of AAS, under which the plant is parked, while AEC, which handles power and water privatisation exercises in Algeria, holds the remaining 49% stake.
All other claims and submissions by AEC were dismissed, with respondents told to bear their own legal costs while TDIC has to bear full arbitration costs, comprising the tribunal’s fees and expenses as well as Paris’ International Chamber of Commerce’s administrative expenses.
“In this regard, TDIC is ordered to reimburse AEC the sum of US$882,569.67 towards the said costs of the arbitration (and) TDIC is ordered to reimburse AEC the sum of €1.822 million, being 60% of AEC’s legal costs,” the filing stated.
Malakoff added that the final award it received on September 29 after close of arbitration proceedings on July 18 is “not expected to have any material financial impact” on the company for the financial year ending December 31, 2023 as the group’s carrying amount of investment in AAS had been fully provided for in financial year 2016.
In March 2019, AEC filed for the arbitration against Malakoff, TDIC and Hyflux, alleging breaches of agreement relating to the 2007 joint venture agreement, water purchase agreement and framework agreement for the plant.
In its claim, AEC sought a declaration that Malakoff and Hyflux had breached the joint venture agreement and that TDIC had breached the framework agreement by declining to transfer its shares in AAS to AEC.
Besides seeking damages from the respondents, AEC also alleged that TDIC and Hyflux had caused moral and reputational damage to AEC.
In 2018, Malakoff had reportedly announced that its associate companies AAS and TDIC had received a notice of termination of the water purchase agreement, following an alleged breach of the agreement. – October 3, 2023