ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 146 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 43. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD (Cont’d) b. Claim against ESPML On 22 July 2020, ESPML a wholly-owned indirect subsidiary of the Company received a Notice for Arbitration to commence arbitration proceedings (“Notice of Arbitration”) by PT Cakra Manunggal Semesta (“PT CMS”). The alleged claim arises out of a BIMCO Standard Bareboat Charter “BARECON 2001” (“Charterparty”) dated 16 October 2017 between ESPML and PT CMS for the vessel known as “MT. BRATASENA” (“Vessel”) and a Settlement Agreement dated 9 December 2019 entitled “Mutual Agreement on Exit Terms” between ESPML, PT CMS, ESPM (the parent company of ESPML), and Sea Trust Marine Pte Ltd, a related company to PT CMS (the “Settlement Agreement”). PT CMS allegedly claimed that ESPML is in breach and/or repudiatory breach and/or anticipatory repudiatory breach of the Charterparty and/or Settlement Agreement. PT CMS’ claim for damages is currently unspecified. Pursuant to the arbitration agreement under the Charterparty, the arbitration is referred to the Asian International Arbitration Centre (formerly known as the Kuala Lumpur Regional Centre for Arbitration). Based on preliminary legal advice obtained, the Directors are of view that the Notice of Arbitration is without merit. ESPML intends to vigorously defend its position and is seeking legal advice for a counter claim against PT CMS for their breaches of the Charterparty and for damages arising under the tort of conversion. No provision has been made to the financial statements in relation to the claim against ESPML. ESPML and ESPM, had through their solicitors filed a Writ of Summons (in rem) (“Singapore Writ”) at the High Court of the Republic of Singapore on 25 July 2020 against PT CMS and/or Demise Charterer of “MT BRATASENA” and filed a Writ in Action in rem at the High Court of Malaya at Kuala Lumpur and at the High Court of Sabah and Sarawak at Kota Kinabalu on 27 July 2020 (collectively “the Writs”), against PT CMS or other persons interested in the Vessel for claims on damages in relation to the breach and/or repudiatory breach and/or anticipatory repudiatory breach of the Charterparty and/or Settlement Agreement. c. COVID-19 Pandemic As at the date of authorisation of the financial statements, the COVID-19 situation is still evolving and unpredictable. Consequently, the Group and the Company are unable to estimate the financial effects of COVID-19 pandemic at this juncture. The Group and the Company are actively monitoring and managing the operations of the Group and of the Company to minimise any impact arising from the COVID-19 pandemic.