Reference is made to the announcements made by  Malaysia Marine and Heavy Engineering Holdings Berhad (“MHB” or “the Company”) on 18 March 2019, 6 August 2021, 30 September 2021, 30 August 2022, 29 September 2022, 12 July 2024, 9 December 2024 and 24 January 2025 as well as the material litigation updates in the Note B8 of the Quarterly Results duly announced on 26 April 2019, 2 August 2019, 24 October 2019, 12 February 2020, 29 April 2020, 23 July 2020, 27 October 2020, 9 February 2021, 28 April 2021, 30 July 2021, 2 November 2021, 11 February 2022, 20 May 2022,17 August 2022, 10 November 2022, 10 February 2023, 18 May 2023, 16 August 2023, 8 November 2023, 14 February 2024, 23 May 2024, 20 August 2024, 12 November 2024, 19 February 2025, 24 February 2025 and 27 May 2025.

MHB Board of Directors wishes to announce an update regarding material litigation involving its wholly-owned and major subsidiary, Malaysia Marine and Heavy Engineering Sdn Bhd (“MMHE”), and Kebabangan Petroleum Operating Company Sdn Bhd (“KPOC”), [“MMHE and KPOC” are collectively referred to as the “Parties”].

BACKGROUND

On 13 March 2019, MMHE received a notice of arbitration from KPOC in relation to claims arising from the Kebabangan ("KBB") field project. KPOC claimed that MMHE was in breach of contract in respect of matters relating to supply of certain valves. The valves procured by MMHE were claimed to be defective and KPOC suffered substantial loss and damage.

Pursuant to the Statement of Claim by KPOC dated 13 October 2019, total claims of approximately RM93.1 million were made in relation to loss and damage in respect of the valves procured by MMHE. KPOC, subsequently, as part of its Closing Submissions dated 9 March 2021, identified its claim amount as RM58.9 million.

By way of the Final Award dated 23 July 2021 that was made available to MMHE on 3 August 2021 (“Final Award”), the Arbitral Tribunal has ordered that MMHE shall pay KPOC the following:-

1. The sum of RM17,241,178 as damages for the expenses incurred by KPOC for assessment, procurement and replacement of valves in the period of 2016 to 2019, together with interest at the rate of 5% per annum from 11 October 2019 to the date of payment;
2. The sum of RM9,820,770 as damages suffered by KPOC in having to procure 1,365 valves and install 1,454 valves in the future, together with interest at the rate of 5% per annum from 11 October 2019 till the date of payment; and
3. The sum of RM1,029,167 for its legal fees and expenses.

In the Final Award, the Arbitral Tribunal dismissed all of KPOC’s claim for loss of revenue in the sum of RM28,030,906.

On 30 September 2021, MMHE filed an application to set aside the Final Award pursuant to Section 37 of the Arbitration Act 2005, whereby MMHE seeks for the Final Award to be set aside on grounds, amongst others, that there was a breach of the rules of natural justice in connection with the making of the Final Award. KPOC, in this regard, has filed an application to seek leave from the High Court to register and enforce the Final Award as a Judgment of the High Court (collectively, “Applications”).

The Applications were heard by the High Court on 15 April 2022 and 20 May 2022. After the completion of the Hearing, the matter proceeded for Clarification on 21 July 2022.

On 30 August 2022, the High Court allowed MMHE’s application to set aside the Final Award pursuant to Section 37 of the Arbitration Act 2005, amongst others, on grounds that there was a breach of the rules of natural justice in connection with the making of the Final Award with costs in favour of MMHE for the sum of RM30,000 and further dismissed KPOC’s application for leave to register and enforce the Final Award as a Judgment of the High Court with the costs to MMHE of RM10,000.

On 27 September 2022, KPOC lodged Notices of Appeal at the Court of Appeal against the Orders of the High Court dated 30 August 2022. KPOC was instructed to obtain the Grounds of Judgment from the High Court, which was made available on 5 September 2023. In light of the above, at the last case management on 16 October 2023, the Court of Appeal fixed KPOC's Appeals for Hearing on 11 July 2024.

On 11 July 2024, the Hearing of the Appeals was adjourned by the Court of Appeal and the Appeals were instead scheduled for a case management on 12 July 2024, to fix a new Hearing date. On 12 July 2024, the Court of Appeal fixed KPOC’s Appeals for Hearing on 9 December 2024. On 9 December 2024, the Court of Appeal heard the Appeals and fixed 24 January 2025 to deliver the decision thereof.

On 24 January 2025, the Court of Appeal dismissed the Appeals with a total cost of RM65,000.00 to be paid by KPOC to MMHE.

On 24 February 2025, MMHE received a sealed copy of the Notice of Motion together with affidavit in support against the dismissal of each Appeal, being KPOC’s applications seeking leave to appeal to the Federal Court against the decision of the Court of Appeal given on 24 January 2025 in respect of both Appeals.

The Federal Court fixed the hearing of KPOC's leave applications on 17 June 2025.

UPDATE

On 17 June 2025, the Federal Court unanimously dismissed KPOC’s leave applications with a total cost of RM30,000.00 to be paid by KPOC to MMHE.

OPERATIONAL AND FINANCIAL IMPACT ON THE GROUP

There is no material financial and operational impact on the Company for the financial year ending 31 December 2025.

No further announcements on any development with respect to the proceedings are expected to be made to Bursa Malaysia.

The announcement is dated on 17 June 2025.