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Telekom Malaysia (TM) sued for over RM400 million

Malaysia’s broadband champion, Telekom Malaysia (TM) said that Malaysian Football League LLP (MFL) has filed a legal suit against the company.

Malaysian Football League Sues Telekom Malaysia TM

In a filling to Bursa Malaysia yesterday, the “champion” said it has been sued for RM428.49 million.

MFL said TM has violated a sponsorship contract by failing to make payments on sponsorship and broadcasting rights for the 2019 Premier League. It is seeking for RM51.7 million for sponsorship and broadcast consideration for 2019, and another RM376.6 million for the years 2020 to 2025, as per the terms and conditions agreed and sealed in January 2018 with TM. It also wants TM to pay RM186,844 as the amount due for Season 2018.

On Monday, TM confirmed that it is no longer a sponsor for the Malaysian League from 2019 onwards following media reports. “We would like to clarify that TM and Malaysian Football League LLP (MFL) were unable to mutually agree on several fundamental commercial terms necessary for the intended collaboration. Despite several extensions of the agreed deadline to sign the definitive agreement, both parties were unable to arrive at an understanding. In view of this, on 1 November 2018, TM duly notified MFL in writing that the partnership has come to an end. ”

Below is the full announcement made by Telekom Malaysia to Bursa Malaysia:

Telekom Malaysia Berhad (TM) wishes to announce that TM has today received a Writ of Summons and Statement of Claim (Claim) dated 18 March 2019 from Malaysian Football League LLP (MFL) seeking for the following reliefs from TM:

  • A Declaration that the Term Sheet dated 29 January 2018 (Term Sheet) had not expired on 31 October 2018 and is subsisting beyond 31 October 2018;
  • A Declaration that TM had breached the Term Sheet;
  • A Declaration that MFL had lawfully terminated the Term Sheet by way of its Notice of Termination dated 16 March 2019;
  • An Order that TM is liable to pay MFL the amount of RM186,844.00 being the amount due for Season 2018 within seven (7) days of the date of this Judgment;
  • An Order that TM is liable to pay MFL the costs incurred by MFL for the removal of all TM’s unifi marks and/or references to TM from all of MFL’s property and merchandise for the year 2019 within seven (7) days of this Judgment;
  • An Order compelling TM to remove, take down and delete all references of TM as a sponsor or Official Telecommunication and Broadcast Partner of MFL in all TM’s materials published or issued by TM or TM’s directors, partners, officers, employees, representatives or agents within forty eight (48) hours from the date of this Judgment;
  • Pre-judgment interest at the rate of 5% p.a. on the amount in prayer (4) and (5) above from 18 March 2019 until the date of the judgment in accordance with section 11 of the Civil Law Act 1956;
  • An Order that TM is liable to pay MFL the amount of RM25,850,000.00 being Payment 1 for the Sponsorship and Broadcast Consideration for year 2019 within seven (7) days of the date of this Judgment;
  • Pre-judgment interest at the rate of 5% p.a. on the amount in prayer (8) above from 2 January 2019 until the date of the judgment in accordance with section 11 of the Civil Law Act 1956;
  • An Order that TM is liable to pay MFL the amount of RM25,850,000.00 being Payment 2 for the Sponsorship and Broadcast Consideration for 2019 on or before 2 June 2019;
  • An Order that TM is liable to MFL the amount of RM376,600,000.00 being the remaining Sponsorship and Broadcast Consideration for years 2020, 2021, 2022, 2023, 2024, and 2025 within seven (7) days of the date of this Judgment;
  • Damages for breach of contract to be assessed by Senior Assistant Registrar;
  • Alternatively, an Order that TM is liable to pay MFL the difference between the total amount of Sponsorship and Broadcast Considerations MFL is entitled to receive from TM under the Term Sheet and any other amount MFL secures in place of the Sponsorship and Broadcast Considerations for years 2020, 2021, 2022, 2023, 2024, and 2025;
  • Post-judgment interest at the rate of 5% p.a. on the judgment sum in prayers (4), (5), (8), (11), (12) and (13) above from the date of Judgment until the date of full and final satisfaction of the Judgment;
  • Costs; and
  • Any further reliefs and/or other Order that the Honourable Court deems fit and proper.

The Claim is not expected to have any operational impact to TM Group. The financial impact, if any, cannot be ascertained at this juncture as it will depend on the outcome of the legal proceedings of the Claim.

TM has instructed its solicitors to take the necessary steps to defend the Claim.

TM shall make further announcement if there are any material developments in respect of this matter.

This announcement is dated 21 March 2019. – [Bursa Malaysia]

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy