Oxley unit starts legal proceedings against ex-contractor of Cambodia project

OXLEY Holdings' subsidiary, Oxley Gem (Cambodia), on April 1 commenced formal legal proceedings in Singapore against its former contractor Sino Great Wall Engineering (SGW).

This is to seek compensation from SGW for all damages suffered due to repeated breaches of its contractual obligations, real estate developer Oxley Holdings said in a filing late Thursday night.

SGW was the main contractor for The Peak, a 55-storey mixed hotel development project in Cambodia.

In February this year, Oxley Gem had said it was planning to seek compensation for damages suffered, laying the blame for project delays on SGW. Oxley Gem called on the two performance bonds provided by SGW for the project, and terminated their contract in October 2019.

In mid-March 2020, SGW had applied to the Cambodian courts to get Oxley Gem to suspend work on The Peak, Oxley Holdings disclosed on Thursday.

However, that hearing was rescheduled to a future date to be determined by the Cambodian courts, after SGW failed to attend the hearing for its own application.

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"Oxley Gem has been advised by its lawyers that SGW has no basis for its application and is seeking to dismiss SGW's application," Oxley Holdings said.

SGW has been evicted from the project site with effect from Feb 25, after Oxley Gem obtained an injunction order from the Cambodian courts, as it said SGW refused to vacate the site and was wrongfully occupying it. This resulted in further delays as the new contractor could not begin work.

SGW sought to object to the eviction order, but the Cambodian courts rejected this objection, Oxley Holdings said on Thursday. The eviction order thus remains effective.

The mainboard-listed developer added that its new contractor China Railway Urban Construction Group has since started work on The Peak and construction has "smoothly resumed".

Currently, none of the above legal proceedings has any impact on the progress of the project, Oxley Holdings noted. Construction is set to complete progressively from mid-2020 to 2021.

Shares of Oxley Holdings closed at 21.5 Singapore cents on Thursday, down 0.5 cent or 2.3 per cent, before the announcement.