Westports Holdings Berhad’s wholly-owned subsidiary, Westports Malaysia Sdn Bhd (“Westports”), has commenced legal proceedings against Oracle Corporation Malaysia Sdn Bhd (“Oracle”) and Bank of America Malaysia Berhad (BoA) at the Kuala Lumpur High Court over the termination of two agreements.
On 30 November 2018, Westports had subscribed into the Oracle ERP Software System by executing two agreements with Oracle. The first agreement, Oracle Cloud Services Agreement, entails an Oracle license fee of RM15.7 million (US$3.7 million).
The Malaysian port operations manager had also entered into another agreement with Oracle and a contract with Oracle’s outsource partner, the total value amounting to RM15.3 million (US$3.6 million), for the implementation of the Oracle ERP Software System and a payroll system. Oracle subsequently assigned the first agreement to BoA, and Westports is required to pay the license fee payments directly to BoA, according to Westports' announcement.
The Oracle ERP Software System project commenced in February 2019, said Westports in a statement, and during the User Acceptance Testing (UAT) phase Westports claims it observed either data discrepancies or an inability of the system to execute the purported requirements.
"Highlighted technical requests remained outstanding," said Westports, which added it could not proceed to go-live with the system and, eventually, terminated the two agreements on 30 December 2019.
Westports stated that prior to the terminations, it had paid RM6.8 million (US$1.6 million) and after the terminations, it received a letter of demand from BoA for RM0.6 million (US$150,000).
Oracle made a counter-claim of RM4.1 million (US$950,000) for the services rendered, according to a statement, and Westports is disputing the counter-claim on the basis that the two agreements have been terminated, and that the system could not proceed to go-live despite the purported completed milestones.
Westports wants the high court to rule that the agreement terminations have negated the obligation to pay BoA. The case management has been fixed at the Kuala Lumpur High Court on 8 July 2020.