ENRA Group Berhad | Annual Report 2022 168 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 38. LITIGATIONS AGAINST THE GROUP (a) Claim against ESPML On 22 July 2020, ESPML, a 60% owned indirect subsidiary of the Company received from PT Cakra Manunggal Semesta (“PT CMS”), a Notice for Arbitration to commence arbitration proceedings at the Asian International Arbitration Centre, Kuala Lumpur. 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” and a Settlement Agreement dated 9 December 2019 between ESPML, PT CMS, ENRA SPM Sdn. Bhd. and Sea Trust Marine Pte Ltd, a related company to PT CMS (“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. On 6 May 2021, PT CMS served its first memorial and related documents including Witness Statement and expert report on ESPML and claimed approximately USD5.57 million. On 11 August 2021, ESPML served its first memorial together with the related documentary evidence including Witness Statement and expert report on PT CMS to defend itself and to counter claim for loss and damages (including fines and penalties) in the excess of USD10.00 million. On 6 May 2022, PT CMS served its second memorial and related documents including further Witness Statement and expert report on ESPML. ESPML is required to serve its second memorial together with related documentary evidence by 3 June 2022. ESPML had on the evening of 27 May 2022, been served with a Writ of Summons in Action in Rem and Warrant of Arrest on Ratu ENRA (“RE”) by PT CMS (“Arrest of Vessel”). By this arrest, PT CMS is seeking security for their claim in the said arbitration proceedings. ESPML is now seeking to lift the Arrest of the Vessel by offering the Company's undertaking to pay the costs awarded by the Tribunal or the amount settled if there is a settlement between the parties. The hearing is in the Malaysian courts and is scheduled to take place on 27 June 2022. This arrest does not amount to a final judgment against ESPML, nor has there been any award on merits in the arbitration proceedings. ESPML has therefore not made any provision for liabilities in respect of PT CMS's claims beyond what was already recognised up to the financial year ended 31 March 2022 nor recognised any asset arising from the counter claim against PT CMS. Parties are now awaiting hearing of the arbitration scheduled to take place on 22 to 26 August 2022. (b) Claim against SPM Terminal Pty Ltd (“SPMT”) as the “1st Respondent” and ESPML as the “2nd Respondent” On 11 January 2021, ESPML received fromControval USA LLC (“Controval”) a Notice of Arbitration to commence arbitration proceeding following the rules of the Singapore International Arbitration Centre. The alleged dispute arises out of a Purchase Order purportedly entered into between Controval and both Respondents relating to the engineering, procurement and fabrication of a Leased Automated Custody Transfer with 8” Coriolis Flow Meters unit installed on a condensate storing, offloading facilities belonging to ESPML known as “Ratu ENRA”. The Claimant is claiming a sum of USD381,211 allegedly for unpaid invoices under the Contract, interest on the amount awarded from 7 July 2020 until settlement of the award, all arbitration costs including the Claimant’s representative’s costs and expenses and such other amounts deemed appropriate by the Arbitral Tribunal. ESPML served its Defence and Counterclaim on the 9th of July 2021. Controval served their Reply and Defence to Counterclaim on the 6th of August 2021. ESPML served its Rejoinder and Reply to Counterclaim on the 20 August 2021.
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