Coral Bay @ Sutera, located within the gated precinct of Sutera Harbour Resort in Kota Kinabalu, Sabah, has encountered a snag.

GSH Corp Ltd, the developer, is reportedly in a dispute with NTSJ Construction, the contractor hired to build the project.

According to a filing made by GSH to the Singapore Stock Exchange last week, Coral Bay @ Sutera was supposed to be completed last December, but NTSJ had only done 45 per cent of the work to date.

Investasia Sdn Bhd, a GSH subsidiary, had appointed NTSJ as the main contractor for the Coral Bay project, to construct the project within 38 months, by December 31, 2021.

GSH alleged that NTSJ made slow progress with deteriorating performance by March 2022.

It also claimed that NTSJ failed to make timely payments to subcontractors and suppliers totaling about RM9 million.

"By March 2022, it was apparent that NTSJ would not be able to progress with the Coral Bay project. Whilst NTSJ had the opportunity to remedy its default, they failed to do so, and the site conditions continued to deteriorate," GSH said.

According to the filing, NTSJ was eventually terminated on April 13 by Investasia.

On June 7, Investasia received a notice of arbitration from NTSJ, claiming RM129.1 million and a declaration of the company's wrongful termination.

Following that, Investasia filed its own RM124.8 million claim against NTSJ.

According to GSH, Investasia will contest NTSJ's claims while appointing a new main contractor to complete the Coral Bay @ Sutera project.

It said Investasia will take all practicable steps to mitigate any impact on the project's completion.

GSH is a growing Asian property developer with five properties under construction in Malaysia and China.

The company owns and operates Sutera Harbour Resort, which includes two five-star hotels (The Pacific Sutera and The Magellan Sutera), a 104-berth marina, and a 27-hole championship golf course, and Sutera@Mantanani Resort on the Mantanani Islands.

Coral Bay @ Sutera is GSH's second residential project in Malaysia, after the highly successful launch of Eaton Residences in Kuala Lumpur in 2016.

Coral Bay @ Sutera is a 12.11-acre oceanfront condominium development with premium finishes and full condominium amenities adjacent to The Magellan Sutera Resort.

It has 460 condominium units spread across eight 12-story buildings, ranging in size from 1,541 to 6,593 square feet (sq ft).