ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 144 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 42. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (Cont’d) a. Development on claim against Gemula Sdn. Bhd. (Cont’d) The CIPAA Payment Claim is in relation to outstanding amounts due and payable by Gemula for works completed pursuant to LOA 1 and LOA 2 including additional/variation works ancillary to the said subcontracts. On 6 September 2018, the Adjudicator had determined in EEFAB’s favour that: i. Gemula shall pay EEFAB the total outstanding sum of RM10.22 million; ii. Gemula shall pay EEFAB interest at the rate of 5% per annum on each invoice claimed by EEFAB from its respective due date for payment until full and final settlement; and iii. Gemula shall pay the total costs of adjudication in the amount of RM132,594. (collectively “Adjudication Decision”). On 8 October 2018, EEFAB, applied to the Construction Court (a division of the High Court) in KL to enforce the Adjudication Decision as a judgement or order of the High Court (Ënforcement Application”) as Gemula failed to make payment of the Adjudication Decision within the given time frame. On 1 November 2018, a sealed Originating Summons was served on EEFAB by Gemula to set aside the Adjudication Decision on the grounds that the Adjudicator had acted in excess of his jurisdiction and had not acted impartially. On 8 January 2019, the High Court held: a. Gemula’s application to set aside the Adjudication Decision for CIPAA Payment Claim was dismissed with costs in the sum of RM15,000; and b. the Enforcement was allowed with costs in the sum of RM10,000 to be paid by Gemula. On 29 January 2019, EEFAB received a Notice of Appeal from Gemula to appeal against the decision of the High Court dated 8 January 2019 (collectively “CIPAA Appeals”). On 4 March 2019, EEFAB, through its solicitors, served Notice of Demand to Gemula demanding payment of the sum totalling RM10.38 million. Subsequently, on 27 March 2019, EEFAB, through its solicitors, filed a winding up petition at the High Court against Gemula as they had failed to pay the sum owing set out in the Notice of Demand after the expiration of 21 days from the date of the service of the said Notice of Demand (“Winding Up Petition”). On 25 June 2019, the Kuala Lumpur High Court granted the Winding up Petition initiated by EEFAB against Gemula together with RM15,000 costs to be paid by Liquidator out of assets of Gemula (“Winding Up Order”). On 23 July 2019, Gemula served a Notice to Appeal the Winding Up Order (“Winding Up Appeal”). On 9 January 2020, Gemula filed a Notice of Discontinuance of the Winding Up Appeal. The Winding Up Appeal is discontinued and withdrawn without liberty to file afresh. On 20 January 2020, Gemula filed a Notice of Discontinuance of the CIPAA Appeals which was confirmed by the Court of Appeal on 5 February 2020 by way of e-review. The CIPAA Appeals are discontinued and withdrawn without liberty to file afresh. In short, the written orders of the High Court for the enforcement of the Adjudication Decision is in favour of EEFAB and the winding up of Gemula has been obtained and remains valid.