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Seatrium unit ordered to pay US$108 million in arbitration over equipment supply contracts

Seatrium unit ordered to pay US$108 million in arbitration over equipment supply contracts

Source: Business Times
Article Date: 19 Apr 2024
Author: Renald Yeo

The ruling was made by a tribunal operating under the rules of the Singapore International Arbitration Centre. It comprised US$101 million in vendor termination fees, and US$7 million for ancillary, and legal and arbitration proceeding fees.

A unit of offshore and marine giant Seatrium has been ordered to pay US$108 million to MHWirth, a wholly owned subsidiary of US drilling services provider HMH.

The ruling was made by a tribunal operating under the rules of the Singapore International Arbitration Centre. It comprised US$101 million in vendor termination fees, and US$7 million for ancillary, and legal and arbitration proceeding fees.

“The tribunal has also awarded interests which will be calculated in due course,” Seatrium said in a bourse filing on Thursday (Apr 18).

It added: “The US$108 million is within the provision that the company has made in prior years, with the interests to be booked in FY2024.”

The arbitration proceedings, which commenced in December 2021, centred on four separate contracts for the supply of equipment.

MHWirth had contended that Jurong Shipyard was in breach of those contracts. Jurong Shipyard is a wholly owned subsidiary of Seatrium.

The contracts were originally entered into in 2012, and terminated by Jurong Shipyard in 2021 and 2022, Norwegian oil services investment firm Akastor said in a separate release on Thursday.

It added that while the contracts are held by MHWirth, it is Akastor that holds the “full financial interest” in them, as they were not included in the transaction that formed HMH.

MHWirth merged with US energy company Baker Hughes’ subsea drilling systems arm in October 2021 to form HMH.

Shares of Seatrium closed S$0.001 or 1.3 per cent lower at S$0.076 on Thursday, prior to the announcement.

Source: Business Times © SPH Media Limited. Permission required for reproduction.

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