Kerjaya Prospek Secures RM75.46 Million in Adjudication Against Yong Tai
Kerjaya Prospek Group Bhd (KL:KERJAYA) has successfully secured a RM75.46 million adjudication award against Yong Tai Bhd (KL:YONGTAI) over an unpaid construction contract related to the ‘The Apple’ mixed development project in Melaka. This marks a significant win for Kerjaya Prospek as the construction giant continues to enforce its rights over contractual disputes.
The Adjudication Outcome
An adjudicator, acting as a neutral arbiter in the dispute, ruled that Yong Tai’s subsidiary, Apple 99 Development Sdn Bhd, must pay the amount to Kerjaya Prospek (M) Sdn Bhd (KPM), a wholly owned subsidiary of Kerjaya Prospek Group. The adjudicator also ordered that the sum be paid with interest.
This decision follows KPM’s filing for adjudication in November 2024, claiming RM105.14 million as the outstanding amount from Yong Tai’s subsidiary. The awarded RM75.46 million represents 71.8% of the total sum claimed, marking a substantial recovery for Kerjaya Prospek.
What Is Adjudication?
Adjudication is a dispute resolution process commonly used in construction contract disagreements. It allows for a quicker resolution compared to lengthy court proceedings, providing a legally binding decision.
Background of the Dispute
The legal battle traces back to a 2016 contract, where KPM was appointed as the main contractor for ‘The Apple’ project in Melaka. The contract, valued at RM213.75 million, included constructing:
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A 16-storey hotel
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A 32-storey serviced suite tower
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An eight-storey parking podium
However, KPM claims that Yong Tai’s subsidiary Apple 99 breached a settlement agreement from February 2020, leaving an unpaid contract sum of RM105.14 million. KPM initiated legal proceedings to enforce both the settlement and hotel sale agreements.
Yong Tai’s Counterclaim
In response, Apple 99 Development countered the claims, arguing that a 2023 supplementary agreement had superseded the original settlement, and that KPM had failed to deliver the project within the stipulated timeframe.
Apple 99 sought RM76.62 million in damages, citing:
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Losses due to delayed completion
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Unrectified contract works
Ongoing Legal Battle
While KPM has secured the RM75.46 million adjudication, the legal dispute is far from over. The lawsuit filed by KPM against Apple 99 continues, with trial dates set for October 2025. Additionally, KPM has initiated a separate lawsuit against Yong Tai Bhd and its CEO, Datuk Boo Kuang Loon, in their capacities as corporate and personal guarantors of the unpaid amount.
Financial and Operational Impact
This adjudication award marks a partial victory for Kerjaya Prospek, allowing it to recover a substantial part of the unpaid amount. However, the continuation of the lawsuit means that the full resolution of the dispute could take more time.
Impact on Yong Tai
For Yong Tai, the adjudication outcome puts additional financial pressure on the company, which has been grappling with project delays and financial strain. The outcome of the ongoing lawsuits could further affect its cash flow and financial stability.
Lessons for Property Developers
The case highlights the importance of:
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Clear Contractual Agreements: Ensuring contracts are well-defined to avoid ambiguities.
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Timely Settlements: Addressing disputes promptly to avoid financial penalties.
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Effective Risk Management: Having contingency plans for project delays and legal battles.
What Lies Ahead?
As the lawsuit progresses, both companies are expected to continue their legal strategies to protect their financial interests. Kerjaya Prospek’s partial win indicates its commitment to enforcing contract compliance, while Yong Tai’s ongoing counterclaims reflect a strategy to mitigate financial liabilities.
Industry Insight
Disputes like this underscore the volatile nature of the construction sector, where legal challenges over unpaid contracts are not uncommon. Property developers and contractors must stay vigilant in managing contracts and proactively addressing disputes to safeguard their interests.
Conclusion
The adjudication outcome marks a significant milestone in the ongoing legal dispute between Kerjaya Prospek and Yong Tai. As the case unfolds, industry stakeholders will be closely watching the implications on both companies’ financial health and reputation. Stay tuned for further updates as the trial progresses later this year.
