The contract, which is 98.9 per cent complete, is for the construction of a wind turbine installation vessel in an US offshore wind farm
[SINGAPORE] Seatrium is starting its own arbitration proceedings against a Maersk Offshore Wind affiliate for the termination of a US$475 million contract that was inked in 2022.
In a bourse filing on Saturday (Nov 29), the offshore, marine and energy specialist said it was seeking a declaration that the buyer wrongfully terminated the contract, confirmation that the contract remains valid, an order for the buyer to take delivery and pay the instalment due, and alternatively, for damages to be assessed.
Seatrium added that 80 per cent of the contract price is to be paid upon delivery – a legacy structure from before Seatrium’s merger with Keppel Offshore & Marine, which is unlike its usual milestone-based contract.
The financial impact of the arbitration can therefore only be ascertained when the group has more visibility on the final outcome, it said.
In early October, Seatrium received a termination notice for the contract with a Maersk affiliate for the construction of a wind turbine installation vessel at an US offshore wind farm. The project was scheduled to be completed in early 2025.
On Oct 22, Seatrium said it rejected the notice of termination, stating that the Maersk affiliate was “in repudiatory breach of the contract”. It added that it “reserved all its rights against the buyer for wrongful termination”.
Seatrium also sent a notice to the buyer that the vessel, which is 98.9 per cent complete, will be delivered on Jan 30, 2026.
In response, the buyer had issued Seatrium a notice of arbitration over the contractual dispute. The notice stated that such disputes are to be referred to arbitration in London, in accordance with the current London Maritime Arbitrators Association terms.
The arbitration notice did not contain any particulars of the alleged disputes, the buyer’s claims or the reliefs sought by the buyer, said Seatrium.
Seatrium shares closed at S$2.15 on Friday, up 0.5 per cent or S$0.01, before the news.
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