Chances of Tabung Haji recovering full Al-Rawda arbitration award balance low – Expert

Experts have stated that the chances of the Tabung Haji (TH) recovering the entire 899 million Saudi riyal arbitration award from Al-Rawda Real Estates Development & Project Management Co Ltd are low. Dr. Mohd Iqbal Mohd Noor, a senior lecturer at the Universiti Teknologi MARA (UiTM) Faculty of Management and Business, clarified that attaining a successful arbitration outcome does not automatically guarantee the full recovery of the awarded sum.

The critical factor in determining recovery, according to Dr. Noor, is the ability to locate and enforce assets belonging to the company or its personal guarantors. At present, only a paltry 14.9 million Saudi riyal, less than 2% of the awarded amount, has been paid to TH. Thailand-based Al-Rawda is claimed to be financially incapable of settling the full compensation.

This situation arose due to TH's leasing of four hotels in Makkah and Madinah to Al-Rawda between 2015 and 2017, with upfront payments of approximately RM1.55 billion. TH also engaged Al-Rawda to manage and operate these hotels under separate management and operating agreements, with rental value totaling 2.49 billion Saudi riyal.