Judicial review challenging KVDT2 contractor's termination to commence

PUTRAJAYA (July 16): The Court of Appeal has dismissed an appeal by the federal government and transport minister against the High Court's decision to grant a stay to Dhaya Maju LTAT Sdn Bhd.

This will prevent the government from calling for a public tender and halt the termination of its contract with Dhaya Maju for the controversial Klang Valley Double Tracking Phase 2 (KVDT2) project.

With this, the three-man bench led by Judge Datuk Lee Swee Seng dismissed the government's appeal, upholding the decision made by the Kuala Lumpur High Court on April 14.

High Court Judge Justice Datuk Noorin Badaruddin had previously granted leave to Dhaya Maju LTAT to commence a judicial review to seek a certiorari order to quash the government's decision to cancel the project, which the government had unsuccessfully appealed at the appellate court.

The judge also allowed a stay on the government's decision to call for a public tender pending the disposal of the judicial review application, where it named the government and the minister in its judicial review application filed in last September 2020.

"The threshold with respect to leave is a rather low one. Dhaya Maju LTAT (respondent) has satisfied the threshold test whereby they are adversely affected by the decision of the government in exercising its public function," the judge said in his brief decision today.

He said that ordinarily, the termination of a construction contract is a private law matter; however in this case, the judge surmised that there is a public element to this matter because according to the government, the reason for termination of the contract was on the grounds of national and public interest as well as security.

The judge also added that there is no reason for the appellate court to interfere with the powers of the High Court judge in exercising her discretion to allow the stay against the government's decision to call for a public tender on KVDT2 pending Dhaya Maju's hearing.

"The reason for termination is amenable to judicial review as it is infused to the public law element. We do not see any good reason to interfere with the exercise of discretion for a stay of the decision," he said, adding that the appeal is dismissed.

The judge also ordered the government to pay RM15,000 in costs.

The other judges on the bench were S Nantha Balan and Datuk Mohd Sofian Abd Razak.

The company was represented by lawyers Datuk Dr Cyrus Das and Datuk Lim Chee Wee while senior federal counsel Ahmad Hanir Hambaly @ Arwi and Nor Atikah Zainal Abidin appeared for the government in proceedings held via Zoom this morning.

The company is seeking a declaration that the government's decision to cancel the KVDT2 project, which was awarded on Aug 19, 2019, and to subsequently reopen the tender for the project, is invalid, null and void.

Dhaya Maju LTAT also wants a certiorari order to quash the government's decision to cancel the project and a mandamus order compelling the government to execute all documents and agreements.

The government terminated the company from continuing the project last August.

Last week, the High Court also dismissed the company's inter partes injunction to prevent the government, ministry officials and Keretapi Tanah Melayu Bhd officials from entering the project site, which the company has indicated it is appealing, and granted an Erinford injunction.

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