Boustead said today its 51 per cent owned MHS Aviation Bhd (MHS) had issued a notice of arbitration against Petronas Carigali (PCSB) over a contract dated June 29, 2011, for the provision of rotary wing aircraft equipment and services (for heavy type aircraft-EC225).

“By the said contract, MHS was engaged by PCSB to provide it with five EC225 helicopters for use in PCSB’s oil and gas exploration and production operations.

“However, the use of all five helicopters was suspended by PCSB unilaterally following two forced landings in the North Sea in May and October 2012 involving EC225 helicopters that were unconnected to the parties in the present case,” it said.

According to a report in The Edge, Boustead said MHS had made eight claims including the RM42.7 million in damages, general damages, and other damages deemed fit by the Arbitral Tribunal.

It is also seeking a declaration that PCSB pays it the monthly standby rate during the period the Emergency Airworthiness Directive issued by the European Aviation Safety Agency remains legally applicable to Malaysian registered EC225 helicopters by virtue of the Department of Civil Aviation regulations/directives.

“The arbitration is part of the company’s ongoing recovery actions to protect and preserve MHS’s rights and monetary claims for various works and services provided in respect of contracts entered into by MHS,” it said.

Boustead said the arbitration action would not have a “material impact” on its operational and financial position for the financial year ending Dec 31, 2016, according to the report.