Judge puts off decision on defence contractor's suit

The Kuala Lumpur High Court has today postponed a decision on the controversial case involving a RM480 million law suit against the government by a defence contractor.

The decision has now been pushed to July 9, pending further written submissions from the contending parties.

Langkawi R&D Academy Sdn Bhd (Lardac) had filed a suit over four years ago against Defence Ministry's secretary-general, its then minister Najib Abdul Razak and the government for breach of contract.

The presiding judge, justice Abdul Wahab Patail - who in late April was elevated to the Court of Appeal - had last month turned down the company's request for a full trial and instead would deliver his verdict based on written statements.

According to Langkawi R&D Academy’s lawyer M Manogaran, the company is flabbergasted over Wahab's decision against a full trial despite all witnesses, including the ministry's former secretary-general Hashim Meon, who had been summoned by the company to testify, being ready to take the stand.

Besides Hashim, four other witnesses for the plaintiff and four more from the government were to testify.

Three days had initially been fixed for the trial, but all of a sudden the witnesses were told that they were not required to  take the stand.

Instead Justice Wahab opted to look at the statement of claims and the defence's statement, an exercise that Manogaran said could have been easily done and would have not taken more than four years for court to deliberate.

An open trial would have shed light on the often hidden world of multi-billion-ringgit contracts involving government officials and defence contractors.

According to Bernama, Justice Abdul Wahab has today ordered the plaintiff, Lardac, an aerospace, research and development company, and the defendants - the Defence Ministry secretary-general, minister and the government - to file written submissions before that date.

He said that if he did not receive the submissions, the court would consider the parties as having elected not to submit the submissions and deliver its decision.

‘Secret dealings’

Lardac's statement of claim, filed on Sept 2, 2005, stated its contract was to carry out avionics upgrading and refurbishment works involving the first of 10 RMAF Northrop F5/F fighter jets, which were subsequently grounded on Oct 11, 2001.

It claimed that the defendants suddenly terminated the contract on Sept 6, 2002 without giving reasonable grounds.

It also claimed to have learnt about 'secret dealings' made directly with its partner - the UK-based Caledonian Airbone Systems Ltd - to continue with the contractual work.

Lardac is seeking RM48 million in general damages and another RM432 million in future losses, exemplary damages, costs and other reliefs deemed fit by the court.

The company said that it signed an agreement with the defendants on Jan 11, 2001, witnessed by the then prime minister, Dr Mahathir Mohamad, for refurbishing work of the fighter jets.

According to the agreement, the defendants would pay RM4.8 million a year for a maximum of 10 years, totalling RM48 million, to the company on completion of the refurbishment work.

The agreement also stated that in the event of a breach of agreement by the company, the defendants must issue a written notice and the contract could be terminated only after 30 days.

The company said it carried out refurbishment of the fighter jets with CAS Ltd, a company appointed as sub-contractor and completed the job and ended the services of CAS Ltd on Jan 26, 2002, after it found the sub-contractor's commitment to the upgrading work unsatisfactory.

However, the plaintiff claimed that the defendants held private negotiations with CAS Ltd to continue the job without its knowledge and it was barred from entering the RMAF base in Butterworth to continue the refurbishment work.

It also claimed that on May 21, 2002, it was announced that CAS Ltd had obtained approval from the defendants to continue the refurbishment work, through a news report published in the Malay Mail.

The company claimed that it received the contract termination letter from the defendants on Sept 6, 2002 to rescind the agreement on grounds that the plaintiff did not produce the implementation bond within 14 days from the date the contract was signed and had failed to send a flyable technology demonstrator
unit before Oct 15, 2001, as stated in the agreement.

The defendants, in their statement of defence, said the company had failed to perform and that the contract was given to another party.