Ai Startup Sues Tm For Reneging On Rm42mil Joint Venture

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Twistcode Technologies says Telekom Malaysia breached the terms of their joint venture and the Competition Act 2010, allegations TM denies. (FMT) – A local startup announced that it is in the midst of a multimillion-ringgit lawsuit against Telekom Malaysia Berhad (TM) for reneging on a joint venture entered six years ago to develop accelerated artificial intelligence (AAI) for the country’s oil and gas industry.
In a statement, Twistcode Technologies Sdn Bhd, a specialist in AI and supercomputers, said the suit, brought at the beginning of this year, was over TM’s alleged breach of a teaming agreement and a terms of a letter of award worth almost RM42 million entered in January 2018.
TM sabotaged (the venture) by entering into a memorandum of agreement with a foreign company on July 3, 2020 which Twistcode believes wrongfully hindered healthy competition in local cloud computing, especially AAI, contrary to sections 4(1) and 10 of the Competition Act 2010, the statement read.
Twistcode claims that, as a result, it has lost some RM27.5 million in expenses and commitments incurred, over and above a payment of RM14.2 million made to TM against a purchase order issued under the letter of award.
In its defence, TM denied violating the terms of the contract or any acts of sabotage as alleged. It also said its actions did not give rise to a monopoly and were not in violation of the Competition Act 2010.
TM also denied the existence of the teaming agreement, saying it did not have any internal records approving the document.
Instead, TM said that Twistcode had failed to pay the balance due under the purchase order, and raised a counterclaim for RM26.9 million and an unspecified amount in general damages.
In its reply, Twistcode denied liability for the counterclaim. It said TM failed to complete the work envisaged under the purchase order.
Twistcode also said TM’s deal with the foreign entity and an unfounded police report lodged by TM against the company severely disrupted the joint venture.
As a result, Twistcode claims it has suffered economic, revenue, business and reputational losses.
It seeks an assessment of damages, including for loss of income, business opportunity and reputation, as well as aggravated and exemplary damages.
The company said it has not been prosecuted for alleged offences despite investigations conducted by the police and the Malaysian Anti-Corruption Commission in 2020 and 2021, which greatly disadvantaged, complicated and tarnished (its) good name and business.
The case is scheduled to come up for hearing in the Kuala Lumpur High Court on Oct 8, 2024.
Twistcode is represented by Messrs Mohaji Hazury & Ismail, while TM Berhad is represented by Messrs Wong & Partners.
 
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