Kuala lumpur: The Court of Appeal has granted an unconditional stay to Pelangi Prestasi Sdn Bhd, owned by business tycoon Tan Sri Syed Mokhtar Al-Bukhary, against a High Court ruling mandating the company to pay RM85.755 million in damages to Sabah Forest Industries Sdn Bhd (SFI) and two others.
According to BERNAMA News Agency, the other two respondents in the case are Grant Thornton Consulting Sdn Bhd and Datuk C. Narendrakumar. The three-member Court of Appeal panel, chaired by Judge Datuk Mohamed Zaini Mazlan and including Justices Datuk Hayatul Akmal Abdul Aziz and K. Muniandy, allowed the stay pending Pelangi Prestasi's appeal against the High Court's decision. Additionally, the bench awarded Pelangi Prestasi RM30,000 in costs.
On October 28, the Kuala Lumpur High Court, under Judge Datuk Su Tiang Joo, ordered Pelangi Prestasi to pay damages amounting to RM85.755 million to SFI, Grant Thornton, and Narendrakumar. The ruling stated that the assessment period for damages would commence from July 2019, with interest applied from September 2021. The High Court highlighted that there was evidence of another potential buyer for SFI, which could have negotiated terms if not for the injunction imposed by Pelangi Prestasi. Furthermore, Pelangi Prestasi was ordered to pay RM100,000 in costs.
The legal dispute stems from a 2018 Sale and Purchase Agreement (SPA) in which SFI agreed to sell its assets to Pelangi Prestasi for RM1.2 billion, contingent upon certain conditions, including obtaining requisite approvals from the Sabah government. After granting six extensions to meet these conditions, SFI declared the SPA automatically terminated on April 30, 2019, due to the state government's decision not to issue a fresh timber licence. Consequently, SFI initiated a fresh tender exercise for its assets.
Pelangi Prestasi maintained that the SPA was still valid and filed a lawsuit on April 12, 2019, claiming a breach of agreement by SFI. Simultaneously, it secured an injunction to prevent SFI from selling its assets until the lawsuit's resolution. However, in 2022, the Court of Appeal dismissed Pelangi Prestasi's lawsuit and lifted the injunction. The Federal Court subsequently rejected Pelangi Prestasi's appeal to reinstate the lawsuit on January 18, 2023, and a notice for damage assessment was filed on February 20, 2023.