Feb 14, 2024 - Keppel DC REIT (KDC) and DXC Technology have found a solution for their payment dispute in Singapore.
On February 13, Keppel shared a document stating that the two had found a "commercial and amicable resolution" in which DXC would pay $9.85 million to KDC by April 2024, representing a "full and final settlement."
Once payment has been received, KPC will file a Notice of Discontinuance for the current proceedings in the Singapore High Course, and both parties will release and discharge each other from all claims related.
According to the Keppel DC REIT release, the amicable resolution has enabled both companies to save "significant time and costs."
However, KDC notes that, had the amount been received in 2023, it would have increased the company's distribution per unit for the year by seven percent.
The lawsuit against DXC was filed in March 2022, and centers on DXC’s partial default of payment in connection with the provisioning of colocation services at Keppel’s DC Singapore 1 facility. DXC disputes its liability to make payment, as the company wanted to reduce its footprint in the data center by two modules and Keppel was refusing.
In January 2024, the Singapore High Court ruled in favor of Keppel, stating that DXC Technology Services Singapore was in breach of its Standard Services Agreement (SSA) over its lease. Justice Hri Kumar Nair ruled that, just because the agreement stated that DXC can request changes to its lease at any time, this "does not stipulate that Keppel is obliged to agree to DXC’s requested changes.”
In addition to the lawsuit against DXC, Keppel DC REIT is currently negotiating late payments with Bluesea Data Development in China after the latter company failed to make payment for rental arrears and coupons for four months, totaling $6.8m including interest. In addition, Keppel was asking for a top-up of security deposits of $4.54m.
The combination of both lawsuits impacted the H2 2023 results for the company, having seen a decline in distributions per unit representing an overall drop in 2023 of 8.1 percent. Distributable income also fell by 9.3 percent to $125m.
