Kuwait Finance House (Malaysia) Bhd (KFH) won a legal battle against rail contractor Emrail Sdn Bhd over an LRT3 project performance bond. The High Court dismissed Emrail's RM59.1 million claim. The court allowed KFH's counterclaim. It ordered Emrail and three guarantors to pay KFH RM39.09 million.
The dispute concerned KFH's obligation to issue a performance bond in a specific format required by the LRT3 project's delivery partner. The court ruled that financing documents gave KFH the right to determine the bond's form and wording acceptability. The judge stated Emrail could not impose obligations on KFH based on a separate contract to which the bank was not a party.