PUTRAJAYA, Feb 2 (Bernama) -- The Court of Appeal on Thursday rejected a company's appeal over a High Court refusal of its RM480-million suit against the government and two others for breach of contract to upgrade the Royal Malaysian Air Force's Northtrop F5 Tiger fighter jets.

Justice Datuk Abdul Malik Ishak, presiding over a three-man panel also comprising justices Datuk Ramly Ali and Datuk Seri Mohamed Apandi Ali, dismissed the appeal brought by Langkawi R&D Academy Sdn Bhd (Ladac), an aerospace, research and development company, with RM15,000 costs.

The court made the ruling after hearing submissions from the company's counsel M. Manogar, and senior federal counsel Norhafizza Azizan and Nik Mohd Noor Nik Kar, who appeared for the defence ministry's secretary-general, the minister and the government.

On July 9, 2010, the Kuala Lumpur High Court dismissed the suit without hearing the testimony of witnesses who had been called earlier when the case was fixed for three days of hearing, and ordered Ladac to pay RM20,000 in costs.

Ladac, in its suit filed in 2005, said that it signed an agreement with the defendants on Jan 11, 2001, witnessed by then prime minister Tun Dr Mahathir Mohamad, for refurbishing work of the fighter jets.

Ladac said that according to the agreement, the defendants would pay RM4.8 million a year for a maximum of 10 years, totalling RM48 million, to the company on completion of the refurbishment work.

Ladac said it carried out refurbishment of the fighter jets with CAS Ltd, a company appointed as sub-contractor and completed the job and ended the services of CAS Ltd on Jan 26, 2002, after it found the sub-contractor's commitment to the upgrading work unsatisfactory.

However, the plaintiff claimed that the defendants held private negotiations with CAS Ltd to continue the job without its knowledge and it was barred from entering the Royal Malaysian Air Force base in Butterworth to continue with the refurbishment work.

It also claimed that on May 21, 2002, it was announced that CAS Ltd had obtained approval from the defendants to continue the refurbishment work, through a news report published in The Malay Mail.

The company claimed that it received the contract termination letter from the defendants on Sept 6, 2002, to rescind the agreement on grounds that the plaintiff did not produce the implementation bond within 14 days from the date the contract was signed and had failed to send a flyable technology demonstrator unit before Oct 15, 2001, as stated in the agreement.

The company is demanding RM48 million compensation for termination of contract, RM432 million for loss of future contracts, exemplary damages, interests, costs and other relief deemed fit by the court.

The defendants, in their statement of defence, said the company had failed to perform and that the contract was given to another party.