Announcing the verdict, Justice Abdul Karim Abdul Jalil, who chaired a three-member panel, said TNB could not be held liable for Southern Steel Bhd’s claim.

Also on the bench were Justices Abu Bakar Jais and Gunalan Muniandy.

Bakar, who read out the court’s unanimous verdict, said Southern Steel’s claim for damages could not stand as it was “based on pure economic loss”.

“Looking at the statement of claim, it also could not be denied that the relief sought by Southern Steel is not for financial loss but due to physical damage,” he said.

There was nothing before the court to show the company’s machines were damaged by the power cut, Bakar said.

Likewise, the appeals court set aside a ruling by the lower court requiring UEM Construction Sdn Bhd to indemnify TNB to the tune of RM2 million in respect of its liability to Southern Steel.

Southern Steel had sued TNB, claiming that the utility company failed to supply electricity to its factory over a one-week period from Aug 26, 2008.

It alleged that the power cuts prevented the factory from producing steel, resulting in losses, and asked for over RM8 million in damages.

TNB sought an indemnity from UEM Construction, claiming that the company was liable for the disruption to electricity supplied to Southern Steel.

In 2015, the High Court found TNB liable and ordered the utility corporation to pay Southern Steel RM4 million in damages.

It also ordered that UEM Construction bear half of the award, or RM2 million.