KORIDOR PADU SDN BHD v 1. ) LEMBAGA GETAH MALAYSIA 2. ) KLIA ASSOCIATES SDN. BHD. 3. ) KLIA CONSULTANCY SERVICES SDN. BHD.

Case Significance

Illustrates how a work-package contractor's claim in a multi-tiered development is assessed against the contractual matrix and the burden of proof: a contractor must prove its entitlement, including loss of profits, on the balance of probabilities, and the risk allocation between a landowner and its project-delivery partner is governed by the indemnity provisions of their agreement.

This High Court decision, sitting in the Construction Court at Kuala Lumpur, concerns a work-package contractor's claim arising from a large development on land belonging to a statutory body. The first defendant was the Malaysian Rubber Board (Lembaga Getah Malaysia), a body corporate established under the Malaysian Rubber Board (Incorporation) Act 1996 and the owner of the land, a development of roughly 535 acres in Sungai Buloh. The second and third defendants had together formed a project-delivery-partner consortium under a Project Delivery Partner Agreement, responsible for the planning, design, engineering, project management and supervision of the works, and were to contract with work-package contractors. The plaintiff had tendered for and been awarded a work package under a letter of acceptance and sought to recover sums it said were due, including a very substantial claim for loss of profits under its contracts. The court analysed the contractual structure — the relationship between the landowner, the project-delivery-partner consortium and the work-package contractor — and the evidence supporting the plaintiff's claims. It held that the plaintiff had failed to prove its claim on the balance of probabilities and dismissed the plaintiff's case, including the loss-of-profit claim, ordering the plaintiff to pay costs to the first defendant and to the second and third defendants. It also dismissed the second and third defendants' own claim against the first defendant, addressing the contractual indemnity by which the consortium had agreed to indemnify the landowner against claims by work-package contractors. Delivered by Nadzarin Wok Nordin J, the judgment is a useful illustration of how a work-package contractor's claim in a multi-tiered development is assessed against the contractual matrix and the burden of proof: a contractor must prove its entitlement, including any loss-of-profit claim, on the balance of probabilities, and the allocation of risk between a landowner and its project-delivery partner is governed by the indemnity provisions of their agreement.