Water consortium goes to Federal Court over damages on 2006 agreement

PUTRAJAYA: NS Water Konsortium Sdn Bhd has gone to the Federal Court to seek multi-billion ringgit damages over the water supply agreement entered into with the Negeri Sembilan government in 2006.

Lawyer Krishna Dallumah, representing NS Water Konsortium, said they had filed eight constitutional and legal questions to obtain leave from the apex court.

“We believe the questions posed are novel and are being raised for the first time or for public advantage as required under Section 96 of the Courts of Judicature Act,” Dallumah told FMT.

On Feb 13, the Court of Appeal ruled that there was no contract between the state government and NS Water Konsortium for a concession relating to water supply over a 30-year period.

In the unanimous decision to set aside a High Court ruling, judge Azizah Nawawi said no questions arose over the concept of “frustration” as evidence showed there was no contract between the parties.

She said even assuming there was a contract between the parties in 2006, such frustration could only have begun in January 2008.

Azizah said this was because there was an amendment to the Federal Constitution that shifted the water services from the states to Putrajaya.

However, she said the federal government could not act until Parliament passed the Water Services Industry Act in 2006 which only came into effect in January 2008.

The bench also ruled that other respondents – Abdul Rahiman A S Dawood, Azrahi Hotels Sdn Bhd and Drard Holdings Sdn Bhd – were not parties to the contract and could not claim any indemnity against the state.

In April 2007, NS Water Konsortium and its related companies, Azrahi Hotels and Drard Holdings, as well as the company’s director Rahiman filed a suit against the state for breach of contract.

They alleged that the state had in 2006 breached the water concession agreement with them.

The state was represented by GK Ganesan, state legal adviser Mohd Azhar Mohd Yusoff, Muhammad Fairuz Iskandar, Karthigesan Shanmugam and KN Geetha.

Lawyers Cyrus Das and Terrance Kanagaratnam appeared for the respondents.