High Court upholds RM77mil award against Merdeka 118 subcontractor

KUALA LUMPUR: The High Court has affirmed a RM77 million arbitration award in favour of the main contractor for the Merdeka 118 tower, dismissing nearly 70 challenges brought by its subcontractor.

Judicial Commissioner Rajes Raghavuji ruled that the complaints raised by Global Wall (Malaysia) Sdn Bhd (GWM) failed to meet the legal threshold under the Arbitration Act to set aside the final award and related costs awarded to Samsung C&T Corporation UEM Construction JV Sdn Bhd (SUJV).

The ruling requires GWM to pay SUJV RM77,022,327.67 following a dispute over facade works for the landmark skyscraper project.

GWM had challenged the tribunal's decision on various grounds, including excess of jurisdiction, breach of natural justice, bias, failure to consider evidence, delay damages, extension-of-time claims, loss of profit, and back charges.

Dismissing the application, Rajes noted in his judgment published yesterday that GWM's complaints were essentially disagreements with the tribunal's factual findings, evidentiary choices, and interpretation of the subcontract and law.

The dispute arose after GWM was appointed to undertake facade-related subcontract works for the Merdeka 118 development.

GWM suspended the subcontract works on Oct 27, 2022, while SUJV later terminated the subcontract on Feb 18, 2023.

The matter was referred to arbitration before a three-member tribunal comprising Ian Pennicott KC SC, Richard Wilmot-Smith KC and David Bateson.

The tribunal found that GWM's suspension of works was lawful and that SUJV's termination of the subcontract was unlawful.

However, after determining the parties' respective claims and counterclaims, the tribunal ordered GWM to pay SUJV RM77,022,327.67.

It also awarded SUJV RM4,939,123.37 in interest up to Dec 16, 2025, with further interest of RM14,111.78 per day from Dec 17, 2025 until payment.

A separate costs award apportioned 75 per cent of the arbitration costs in SUJV's favour.

GWM argued that the outcome was inherently unsustainable as the tribunal had found SUJV's termination unlawful, yet still ordered it to pay more than RM77 million.

Rajes rejected the argument, stating that the termination was only one of many issues before the tribunal.

"The tribunal's finding on that issue, in GWM's favour, does not, without more, preclude SUJV from succeeding on other independent issues," he said.

He noted that the largest single component awarded to SUJV was RM33,561,503.39 in delay damages due to GWM's failure to complete works by the extended completion dates.

Rajes added that RM9,691,621.22 in interest stemmed from the reversal of adjudication decisions, while back charges and taking-over items related to findings on work responsibilities.

The court also rejected GWM's attempt to rely on the cumulative effect of its complaints.

Rajes said the number of complaints did not alter their character where they were, in substance, challenges against the merits of the tribunal's decision.

He said the parties themselves had chosen to have their dispute determined by a panel of three experienced arbitrators.

"The parties chose to refer their disputes to a tribunal of three experienced arbitrators, whose award runs to several hundred paragraphs and which, on any fair reading, engaged with the issues placed before it and explained its conclusions," he said.

Citing a Federal Court decision, Rajes also said a party which chose arbitration had to accept the tribunal's judgment.

"A party who chooses to go to Caesar must take Caesar's judgment," he said, quoting the apex court.

Darshendev Singh and Michelle Yap appeared for GWM, while Harold Tan, Serene Hiew and Tan Joon Meng acted for SUJV.