Proceedings Against Malaysian Port Begin

Malaysia's Centralised Terminals, owned by MISC Bhd and Dialog Group Bhd , has started arbitrage proceedings against Tanjung Langsat Port Sdn Bhd, both companies said in separate filings to stock exchange Bursa Malaysia.

Centralised Terminals' majority-owned subsidiary Langsat Terminal (One) is trying to recover losses and damages from Tanjung Langsat Port for its alleged failure to maintain a minimum draft - or depth - in the port's approaching channel, they said.

Tanjung Langsat Port, which operates and manages the port and jetty facilities, failed to provide a minimum draft of 16.5 meters at the approaching channel so that the port can be accessed by a Very Large Crude Carrier (VLCC), they added.

Centralised Terminals, which is 45 percent owned by MISC and 55 percent owned by Dialog, owns and operates the 476,000 cubic meters tank terminal in Tanjung Langsat in the southern Malaysian state of Johor.

The storage tanks are not as popular as tanks in neighboring Singapore partly due to the draft restriction, oil traders have said.

The arbitration has been referred to the Kuala Lumpur Regional Centre for Arbitration, the companies said.