Seatrium files arbitration against project partner Aibel, claiming 180 million euros
Seatrium finds itself embroiled in another legal dispute. Shortly after finalizing an agreement with Maersk for an offshore wind farm project, the company has initiated arbitration proceedings against its project partner Aibel, seeking 180 million euros due to disagreements over revenue and cost allocation.
In a countermove, the Norwegian firm Aibel is filing a claim for 113 million euros.
The origins of the dispute trace back to 2019, when Keppel Offshore and Marine, prior to its merger with Sembcorp Marine to form Seatrium, secured a contract to construct the 900MW DolWin 5 offshore converter platform.
Keppel O&M won this contract as part of a consortium with Aibel, with TenneT Offshore acting as the customer.
According to an announcement from Keppel on May 7, 2019, the company's share of the contract was valued at $560 million.
The consortium agreement stipulated that the platform would be initially constructed in Singapore before being transported to Aibel's facility for further work, a process completed in October 2023.
Seatrium stated in a January 22 announcement that it has fully met its contractual obligations, despite numerous design changes to the DolWin5 project initiated by Aibel.
The original May 2019 announcement indicated that project delivery was scheduled for 2024.
Seatrium asserts that it is "contesting the validity and substantiation of these claims and in turn is seeking declarations to clarify the parties’ obligations and liabilities" under the consortium agreement.
"As the arbitration proceedings are at a preliminary stage, the company is unable to definitively ascertain the financial impact, if any, arising from the arbitration proceedings.
"The financial impact will also be dependent on the final outcome of the arbitration proceedings," Seatrium added.
In response, DBS Group Research commented that this latest arbitration could potentially dampen Seatrium's near-term rebound prospects.
Even before news of the arbitration emerged, DBS had already removed the stock from its equity picks list yesterday for tactical reasons, citing a near-term resistance level of $2.16.
Seatrium shares saw a modest gain of 0.47%, trading at $2.14 as of 9:52 am.
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