Westports opens legal action against Bank of America and Oracle

Kuala Lumpur, Malaysia - March 27, 2011. The Sultan Abdul Samad Building in downtown Kuala Lumpur.

Westports Holdings Berhad (Westports) has commenced legal proceedings against Oracle Corporation Malaysia Sdn Bhd (Oracle) and Bank of America Malaysia Berhad (BoA) at the Kuala Lumpur High Court following the termination of two agreements.

According to a statement, the legal action involves to Westports Holdings Berhad’s subsidiary Westports Malaysia Sdn Bhd.

Westports said it subscribed to the Oracle ERP Software System by executing two agreements with Oracle. The first agreement, Oracle Cloud Services Agreement, entails an Oracle license fee of $3.6 million (RM15.7 million), according to Westports.

The Malaysian terminal operator says it also entered into another agreement with Oracle and a contract with Oracle’s outsource partner, the total value amounting to $3.57 million (RM15.3 million), for the implementation of the Oracle ERP Software System and a payroll system.

Oracle, Westports claims, subsequently assigned the first agreement to BoA, and Westports is required to pay the license fee payments directly to BoA.

The Oracle ERP Software System project commenced in February 2019. During the User Acceptance Testing (UAT) phase, Westports claims to have observed either data discrepancy or an inability of the system to execute the purported requirements.

Highlighted technical requests remained outstanding, according to Westports, and it could not proceed to go-live with the system. Westports eventually terminated the two agreements on 30 December 2019.

Prior to the terminations, Westports had paid $1.59 million (RM6.8 million) and claims to have subsequently received a letter of demand from BoA for $140,000 (RM0.6 million). Oracle made a counter-claim of $960,000 (RM4.1 million) for the services rendered.

Westports says it is specifically disputing against the counter-claim on the basis that the two agreements have been terminated, and that the system could not proceed to go-live despite the purported completed milestones.

“Westports is seeking the court to declare that the agreement terminations have negated the obligation to pay BoA,” it said.

The case management has been fixed at the Kuala Lumpur High Court on 8th July 2020.

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