What are the most significant cases or transactions that your legal team has recently been involved in?

Aerotrain Replacement Project: Malaysia Airports awarded the Aerotrain Replacement project to Pestech Technology who will be working with Bombardier Transportation, a subsidiary of well-known rolling stock manufacturer, Alstom France, which project encompasses the replacement of the aerotrain system from the main terminal building to the satellite building and vice versa at Kuala Lumpur International Airport. This design and build project is valued at RM650m and is scheduled to be completed within three years.

Some of the pertinent issues that Malaysia Airports managed to secure after lengthy negotiations are the issuance of a Letter of Guarantee from Bombardier (Malaysia), a Parent Corporate Guarantee from Alstom, France and a Parent Corporate Guarantee from Pestech’s parent company, Pestech International, a company listed on the KL Stock Exchange, guaranteeing the due performance of the contract.

The in-house legal team worked very closely with all stakeholders, both internally and externally, as well as the external lawyers in order to ensure all our rights are protected, legal risks are minimised and controlled in the best possible ways, and the board of director’s directions and suggestions are embedded into the contract. We also engaged a legal firm in France to advise us regarding the enforcement of the guarantee issued by a company incorporated in France.

Baggage Handling System (BHS) Replacement Project: A Letter of Award was issued in October 2022 to a consortium comprising T7 Kemuncak, a Malaysian-based company and Siemens Logistic, a Singapore-based company. To undertake the abovesaid project valued at RM900m. The project encompasses the replacement of the current baggage handling system at Kuala Lumpur International Airport and is targeted to be completed within three years. This project is very complex as it involves a live environment where the current BHS still needs to run whilst the new BHS is being constructed. Besides the construction contract, we also reviewed and negotiated the terms for the deferred payment agreements in respect of the funding and payment via the deferred payment mechanism. Malaysia Airports also managed to negotiate and obtain parent corporate guarantees from the parent companies of both T7 Kemuncak and Siemens Logistics.

The in-house legal team worked very closely with all stakeholders, both internally and externally, as well as the external lawyers in order to ensure all our rights are protected, legal risks are minimised and controlled in the best possible ways, and the board of director’s directions and suggestions are embedded into the contract.

Land Lease Agreement with the Federal Lands Commissioner (FLC): MAHB successfully secured and was granted of a 99-year development rights and lease of 41 lots KLIA lands from 25 years previously. This entails amendments to the current operating agreement and main lease agreement to carve out the 41 lots from these documents and drafting of new lease agreement and development agreement, with new terms and conditions with the FLC.

The in-house lawyers together with the external lawyers reviewed the drafted and negotiated the terms and conditions of the agreements to ensure the company’s interests are well protected and legal risks are minimised in the best possible ways.

How important is choosing to work with external lawyers who align with your company’s values? Are you likely to reconsider what firms you work with based on this?

Choosing external lawyers who align with our company values has always been a key factor to us here in Malaysia Airports. We acknowledge that lawyers have different styles of practicing. Likewise, clients have their own manner of conducting business. The culture and values of the law firm should be compatible with the culture and values of the client. For example, to what degree do we wish the external lawyers to become involved in such areas as governance, business strategy, and other services that are not purely legal in nature? They must understand our tolerance for risk and whether it is compatible with theirs.

We choose lawyers who know how we conduct our business, what values that are important to us as well as the outcome that we desire to achieve. Hence, the relationship should be collaborative and trusting. Only by fully understanding the business outcome and values, external counsel be able to communicate clearly and succinctly what the company’s legal position is and what its realistic options are.