Firm ordered to pay $27.4mil to hospital for breach of agreement

JOHOR BARU - Kumpulan Perubatan Johor Sdn Bhd (KPJ) has been order­ed to pay RM70.486mil (S$27.4 mil) in damages to Hospital Penawar Sdn Bhd after it breached a joint venture agreement between the two.

The summons was filed by Hospital Penawar chairman Dr Mohd Adnan Sulaiman and managing director Azizan Sulaiman following KPJ's decision to set up a hospital in Pasir Gudang - less than a kilometre from Hospital Penawar.

In the agreement, KPJ, which owns about 30 per cent of shares in Hospital Penawar, should be responsible for mobilising resources and expertise for the mutual benefits of both hospitals.

High Court's Justice Datuk Abdul Rahman Sebli said KPJ had breached several terms and conditions in the agreement.

He set the amount even though Hospital Penawar, represented by Datuk Mohammad Adam Abdullah, claimed for damages amounting to RM155.6mil.

He ordered KPJ to pay an additional interest of 5 per cent per annum if it failed to settle the amount within two weeks.

Abdul Rahman also ruled that KPJ should settle the legal costs of RM150,000 for the claimants.

KPJ was represented by S.Youggeswary and Jagjit Kaur.

The agreement between both hospitals was signed on May 30, 1995.

Hospital Penawar was set up in 1993 but KPJ announced that it would build the new specialist hospital in October 2009. Hospital Penawar then filed a civil case against KPJ in May last year.

In their statement of claim, besides general damages, Hospital Penawar sought RM115mil in compensation or get KPJ to purchase shares in its company totalling RM142mil.