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As disclosed earlier, TM had on 10 February 2003 issued a Notice of Arbitration to the GoG for the commencement of arbitration proceedings under the United Nations Commission on International Trade Law ("UNCITRAL") Arbitration Rules in accordance with the Bilateral Investment Treaty between the Government of Malaysia and the GoG ("the BIT").

The arbitration hearing commenced from 5th to 15th July 2004 at the Permanent Court of Arbitration in The Hague, Netherlands, before a three (3) member Arbitral Tribunal. The said hearing dealt with issues pertaining to jurisdiction and merits of TM's claims and the GoG's jurisdiction to bring counterclaims against TM. The Arbitral Tribunal had indicated that the decision based on the July hearing is anticipated to be delivered in early September 2004.

In the event that the Arbitral Tribunal decides that the GoG is liable to TM, a second hearing scheduled from 8th to 12th November 2004 will be held whereby this hearing will deal with the quantum of TM's claims.

On the other hand, if the Arbitral Tribunal decides that the GoG has jurisdiction to bring counterclaims against TM, a further written pleadings to address the merits and quantum of the GoG's counterclaims will be submitted by both parties and dealt with at the said November hearing.

TM will announce further development on the arbitration proceedings as appropriate.