This was disclosed by non-executive chairman Mohd Anwar Mohd Nor after the property developer’s 40th annual general meeting yesterday.
“We have submitted this for arbitration, which will take place on neutral ground in Singapore. However, the process has been postponed to early February next year,” he said.
He added that the group had invested over RM100 million in the project over the past 28 years and is determined to recover a substantial amount of its losses through the arbitration proceedings.
The dispute stems from the Sarawak government’s decision in May 2021 to forfeit three parcels of land – Lots 48, 49, and 51 – under Section 33(5) of the Land Code. These parcels, intended for the development of Borneo Highland Resort, were taken back by the state due to a lack of development.
The state government had alienated 2,071 hectares of land in 1994 for the development of a holiday resort in Borneo Heights, Padawan, via a joint venture between CHHB and the Sarawak Land Custody and Development Authority.
Under the title conditions, the land must be used as a holiday resort and its development completed by September 1999.
Since the development was not even completed by 2020, and the condition of the developed part of the resort, including the golf course and clubhouse, was in a dilapidated state, the state government served notice on BHSB to remedy the breach of title condition and complete the resort.
However, BHSB failed to comply with the notice to remedy, according to Sarawak media reports. In 2021, the state government forfeited three of the parcels – Lots 48, 49 and 51 – where no development had taken place, bringing it back under its control. Lot 50, which had been developed into residential lots and sold by BHSB, was not forfeited.
BHSB and CHHB subsequently filed a suit seeking a declaration to annul the order of forfeiture. However, in March this year the Federal Court dismissed their application for leave to appeal against the order made by the Sarawak Superintendent and Surveys to forfeit the three parcels of land.
No compensation for forfeited land
CHHB founder and adviser Lee Kim Yew claimed the company had not received any compensation for the forfeited land.
“According to the Federal Constitution, all forfeited land must be compensated. Despite this, we have not received a single cent.
“Shareholders have raised concerns about the lack of compensation over the past two years,” he said after the AGM.
Lee, who established Country Heights in 1984, emphasised the importance of resolving the issue through arbitration in Singapore.
“Both parties, CHHB and the Sarawak government, need to settle this matter to build international confidence, as a public-listed company must fully comply with business law,” he added.
However, neither Anwar nor Lee indicated if the Sarawak government would accept the group’s arbitration proposal.
Country Heights’ shares closed 1.5 sen or 5.1% lower yesterday, giving the group a market capitalisation of just RM83.4 million.