PETALING JAYA: Kuala Lumpur Kepong Bhd

(KLK) announced that its subsidiary, PT Perindustrian Sawit Synergi (PT PSS), is facing arbitration proceedings initiated by PT Pertagas Niaga (PT GN) under Badan Arbitrase Nasional Indonesia (BANI).

In a filing with Bursa Malaysia, KLK noted the dispute stems from the termination of a gas supply agreement (GSA). PT GN is claiming compensation of about US$39mil (RM158.7mil) and an order/declaration of its US$2.78mil (RM11.3mil) bank guarantee drawdown.

PT PSS will counterclaim for RM55mil in damages, alleging PT GN breached the GSA by failing to provide a continuous supply, and will challenge the validity of the bank guarantee drawdown.

KLK stated that PT GN’s claims lack merit and confirmed PT PSS will defend its position vigorously with appointed legal counsel.