KUALA LUMPUR (Dec 30): The High Court has dismissed an application by MISC Bhd to set aside US$330.17 million (RM1.45 billion) representing parts of an arbitration award against its subsidiary involved in the Gumusut-Kakap semi-floating production system (semi-FPS) project in 2014.

The 2020 arbitration award, totalling US$352.44 million excluding costs, was to be claimed by Sabah Shell Petroleum Co Ltd (SSPC) from MISC's subsidiary, Gumusut-Kakap Semi-Floating Production System (L) Ltd (GKL).

In the 2020 arbitration, the Asian International Arbitration Centre ruled that GKL was liable for defects in the Gumusut-Kakap semi-FPS it provided SSPC in 2014.

GKL subsequently made the High Court application in July 2020 to set aside parts of the arbitration award, which was dismissed on Thursday (Dec 29), MISC said.

"The full written grounds of judgement are expected to be made available in January 2023.

"GKL is currently assessing any potential material impact of the High Court's decision on MISC for the financial year ending Dec 31, 2022," MISC said.

"GKL has 30 days from Dec 29, 2022 to file its notice of appeal against the High Court's decision. GKL has been advised that it has legal grounds to appeal against the High Court's decision and will further review its position upon receipt of the full written grounds of judgement," it added.

MISC already booked an impairment of RM1.895 billion in 2020 following the arbitration award. This comprised a provision of litigation claims of RM1.049 billion, as well as RM846.2 million write-off of trade receivables and loss on remeasurement of finance lease receivables.

Shares of MISC settled up 1.49% or 11 sen, ending the year 2022 with a share price of RM7.50. The shipping group has a market capitalisation of RM33.48 billion.