x Abu Dhabi, UAEFriday 28 July 2017

Energy company Emas sues for Dh735m over tender bids

Emirates International Energy Services sues Malaysian business over allegedly withdrawing from bid tenders at the last moment to help foreign firms avoid competition from local companies.

Abu Dhabi // An energy company is suing a Malaysian business over what it calls a "malicious" scheme to withdraw from bid tenders at the last moment to help foreign firms avoid competition from local companies.

Emirates International Energy Services (Emas) filed a lawsuit at the Abu Dhabi Commercial Court this month asking for nearly US$200 million (Dh735m) in payments and damages.

The Malaysian firm, Sime Darby Engineering (SDE), is accused of backing out of seven large-scale projects to help other unnamed foreign companies win tenders.

SDE bid for projects in the gas and oil sectors through Emas, which would apply for projects through Adnoc.

By using Emas, which provides gas and oil services and is supported by the Khalifa Fund for Enterprise Development, SDE had an advantage over other bidders, Emas officials claim.

When SDE withdrew a bid that meant the other foreign businesses no longer had to contend with Emas, company officials argue.

"We could put you [ahead] of other companies to execute such projects," the head of Emas said in a letter enclosed with the court file. The withdrawal from bids came at "critical times and last moments, the matter of which raised doubts about our company and defamed our reputation in the national oil and gas companies".

The Malaysian company rejected the "baseless allegations" and said SDE was under no obligation to accept or decline projects in accordance with any deadlines.

"It was our conclusion that the projects you introduced to date were either not viable or were not within our capacity or capability at that particular time," SDE wrote.

Emas officials said they had lost expected revenue from seven projects in the past four years. Projects in the same areas would not be available for five years until the current projects had been completed, said Mansoor Abdullah al Tamimi, chairman of Emas.

"The total number of years which the defendant deprived the plaintiff of benefiting is nine years," Emas told the court.

In one instance, according to the suit, SDE justified pulling out of a bid for a $83m project by stating that the "scope of this work is not within its core competence".

Emas argued SDE was approved by Adnoc after experts travelled to Malaysia and conducted a comprehensive study. SDE is one of the top five companies in Malaysia in terms of market capital, according to several business rating services.

"The plaintiff made available the said projects and exerted the required efforts for more than four years, plus the required costs and expenses for executing its duties," Emas said in court.

Officials from SDE told Emas the issue related to the old management and they were interested in bidding for new projects, according to documents enclosed in the lawsuit.

hhassan@thenational.ae