London panel to rule on US$1 billion Malaysia-Singapore dispute, says report
A dispute between Malaysia and Singapore will come to a close in a few weeks when a London arbitration panel decides on a US$1.12 billion (RM3.54 billion) development charge the island state imposed on a joint-development project in which Malaysia has a 60% stake, The Edge Review reported today.
The weekly regional magazine reported in its Informer column that the closed-door hearings in London concluded earlier this month after leading Queen's Counsels representing both nations had argued their case.
Former second finance minister Nor Mohamed Yackop testified for the Malaysian side, while Singapore's former foreign minister George Yeo was the key witness for the island state in the hearings, sources told The Edge Review.
Both parties have resolved to accept the panel's decision, expected in a few weeks.
"The worst case scenario is that the developer will have to pay the charge or an amount ruled by the (arbitration) panel," a senior financial executive figure familiar with the arbitration told The Edge Review.
"But the Malaysian side strongly believes that there should not be a charge because of the history behind the deal," he said, adding that the figure was seen by the government as being on the "high side".
The levy was slapped by Singapore on the joint-development project shortly after its state-owned Temasek Holdings and Malaysia's sovereign wealth fund Khazanah Nasional finalised the deal three years ago.
Under the deal, four parcels of land in Marina South and two in Ophir Rocher are being developed by M+S, the joint-venture company that is 60%-controlled by Khazanah and 40%-owned by Temasek.
Malaysia reportedly demanded that the charge be waived on the grounds that the development project was the result of a unique political arrangement between the two governments.
But Singapore, which imposes the levy on all projects on its shores, is said to have adopted a strict business approach to the dispute.
Both countries decided to proceed with the project and to resolve the impasse through arbitration.
The projects are reportedly a direct result of a breakthrough deal in 2010 to overcome a decades-old dispute for control over a railway corridor that runs from Malaysia to Singapore's central business district.
But the issue comes at a time when relations between the two neighbouring countries are strained by the recent row over toll charges for vehicles crossing the causeway, as well as several large development projects in Malaysia which could have an environmental impact on Singapore.
Earlier this week, former prime minister Tun Dr Mahathir Mohamed took Datuk Seri Najib Razak to task for his handling of foreign affairs, saying the Malaysian government's "humble attitude" towards its neighbouring countries had jeopardised the country and left its domestic affairs subject to their interference.
"But the views of the race and party, which had all this while supported and saved the government, are not given fair treatment," said the country's longest-serving prime minister.
The Edge Review report said discontent against Najib's administration would only worsen should the panel decide to uphold the levy, which will put Khazanah's portion of the bill at S$840 million (RM2.12 billion). – August 22, 2014.
A dispute between Malaysia and Singapore will come to a close in a few weeks when a London arbitration panel decides on a US$1.12 billion (RM3.54 billion) development charge the island state imposed on a joint-development project in which Malaysia has a 60% stake, The Edge Review reported today.
The weekly regional magazine reported in its Informer column that the closed-door hearings in London concluded earlier this month after leading Queen's Counsels representing both nations had argued their case.
Former second finance minister Nor Mohamed Yackop testified for the Malaysian side, while Singapore's former foreign minister George Yeo was the key witness for the island state in the hearings, sources told The Edge Review.
Both parties have resolved to accept the panel's decision, expected in a few weeks.
"The worst case scenario is that the developer will have to pay the charge or an amount ruled by the (arbitration) panel," a senior financial executive figure familiar with the arbitration told The Edge Review.
"But the Malaysian side strongly believes that there should not be a charge because of the history behind the deal," he said, adding that the figure was seen by the government as being on the "high side".
The levy was slapped by Singapore on the joint-development project shortly after its state-owned Temasek Holdings and Malaysia's sovereign wealth fund Khazanah Nasional finalised the deal three years ago.
Under the deal, four parcels of land in Marina South and two in Ophir Rocher are being developed by M+S, the joint-venture company that is 60%-controlled by Khazanah and 40%-owned by Temasek.
Malaysia reportedly demanded that the charge be waived on the grounds that the development project was the result of a unique political arrangement between the two governments.
But Singapore, which imposes the levy on all projects on its shores, is said to have adopted a strict business approach to the dispute.
Both countries decided to proceed with the project and to resolve the impasse through arbitration.
The projects are reportedly a direct result of a breakthrough deal in 2010 to overcome a decades-old dispute for control over a railway corridor that runs from Malaysia to Singapore's central business district.
But the issue comes at a time when relations between the two neighbouring countries are strained by the recent row over toll charges for vehicles crossing the causeway, as well as several large development projects in Malaysia which could have an environmental impact on Singapore.
Earlier this week, former prime minister Tun Dr Mahathir Mohamed took Datuk Seri Najib Razak to task for his handling of foreign affairs, saying the Malaysian government's "humble attitude" towards its neighbouring countries had jeopardised the country and left its domestic affairs subject to their interference.
"But the views of the race and party, which had all this while supported and saved the government, are not given fair treatment," said the country's longest-serving prime minister.
The Edge Review report said discontent against Najib's administration would only worsen should the panel decide to uphold the levy, which will put Khazanah's portion of the bill at S$840 million (RM2.12 billion). – August 22, 2014.
