PETALING JAYA: An international arbitral tribunal has decided that the Malaysia-Singapore joint venture company, M+S Pte Ltd, need not pay a development charge on the three parcels of former KTM Bhd land in the island republic.
The decision came four years after the Malaysian and Singaporean governments decided to refer to the Permanent Court of Arbitration whether the development charge should be imposed on the original land.
The foreign ministries of Malaysia and Singapore in a joint statement yesterday said that both countries were satisfied with the arbitral process and have agreed to abide by and fully implement the decision of the tribunal.
M+S Pte Ltd is a joint venture company 60% owned by Khazanah Nasional Bhd, while Singapore's Temasek Holdings has the other 40% stake.
"The arbitral tribunal decided that M+S Pte Ltd would not have been liable to pay development charges on the Keppel, Kranji and Woodlands parcels if the said parcels had been vested in M+S Pte Ltd and if M+S Pte Ltd had actually developed the lands in accordance with the proposed land uses set out in the Annexes to the POA," according to the statement.
In September 2010, the Prime Ministers of Singapore and Malaysia announced that both countries had different views relating to the development charges on the three parcels of Points of Agreement (POA) land in Tanjong Pagar, Kranji and Woodlands.
They agreed to settle the issue amicably through arbitration and agreed to accept the arbitration award as final and binding.
In January 2012, Singapore and Malaysia entered into an agreement, submitting the issue to final and binding arbitration.
The Permanent Court of Arbitration acted as Registry in this arbitration.
The arbitration proceedings were conducted in accordance with the procedural rules agreed to by Malaysia and Singapore before a three-man arbitral tribunal appointed by the countries. The tribunal delivered its decision on Thursday.
In Singapore, Prime Minister Lee Hsien Loong in an immediate reaction said the decision would allow both countries to put the matter behind them.
"I am happy that Singapore and Malaysia have been able to resolve this dispute in this impartial and amicable way.
"This was an issue left over from the Points of Agreement (POA) which was signed in 1990. There was a question of whether development charge was payable on the three parcels of POA land in Tanjong Pagar, Kranji, and Woodlands.
"Prime Minister (Datuk Seri) Najib (Tun Razak) and I agreed to resolve it through arbitration. This has been done, and the Tribunal has decided that development charge was not payable," he said.
Lee said the full and successful implementation of the POA in 2011 had paved the way for joint development projects and closer collaboration between Singapore and Malaysia.
"These include links in transport connectivity, and trade and investment. I look forward to making progress on them, and working with PM Najib bilaterally, and in Asean to benefit both countries," Lee added.