TENAGA Nasional Bhd (TNB) has won its appeal to set aside a High Court order for it to pay RM4 million in damages to a steel manufacturing company for alleged negligence over electricity supply disruptions to its factory.

A panel comprising justices Abdul Karim Abdul Jalil, Abu Bakar Jais and M. Gunalan allowed TNB’s appeal after ruling the power company cannot be held liable for Southern Steel Bhd’s (SSB) claim.

It also set aside the High Court’s order for UEM Construction Sdn Bhd to indemnify TNB to the tune of RM2 million with respect to TNB’s liability to SSB.

In the Court of Appeal grounds of judgment dated May 3 this year, justice Abu Bakar said SSB’s damages claim for tort of negligence cannot stand as it is based on pure economic loss.

“Looking at the plea, it could not be denied that the relief sought by SSB was not for financial loss due directly to physical damage to SSB’s property,” he said, adding the court will be minded to allow damages for SSB if the company pleaded for physical damage due to electricity supply disruption.

Abu Bakar said there is no obligation on TNB to pay RM4 million in damages to SSB. He also said since TNB is not liable to SSB, the order by the High Court against UEM Construction to indemnify TNB must also be set aside.

The panel dismissed SSB’s appeal against the quantum of damages awarded to it by the High Court. SSB had claimed over RM8 million in general damages and/or special damages against TNB.

SSB filed a suit against TNB alleging the utility company failed to supply electricity to its factory from August 26 to September 1, 2008.

The company said it could not produce steel and suffered losses due to the cut.

TNB brought in UEM Construction as a third party in SBB’s suit to bear any liability as TNB claimed UEM Construction caused the power cut to SSB.

TNB said the cut was due to third-party negligence in its construction work, which damaged TNB cables that supplied electricity to SSB premises.

In 2015, the High Court allowed SSB’s claim against TNB and ordered the utility company to pay RM4 million in damages to SSB.

It also allowed TNB’s claim against UEM Construction and ordered UEM Construction to bear half of the RM4 million after finding that the company shared half the contributory negligence in the incident that caused damage to TNB cables, which directly resulted in SSB factory power cut. – Bernama, May 29, 2023.