General – Arbitration
Seatrium is starting its own arbitration proceedings against a Maersk Offshore Wind affiliate over the termination of a US$475 million contract inked in 2022.
In a bourse filing on Nov 29, the offshore, marine and energy specialist said it is seeking a declaration that the buyer wrongfully terminated the contract, confirmation that the contract remains valid, and an order for the buyer to take delivery and pay the instalment due. Alternatively, it is seeking 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 its merger with Keppel Offshore & Marine, unlike its usual milestone-based contracts.
The financial impact of the arbitration can therefore be ascertained only when the group has more visibility of the final outcome, it said.
In early October, Seatrium received a termination notice for its contract with a Maersk affiliate for the construction of a wind turbine installation vessel at a 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 stating that the vessel, which is 98.9 per cent complete, will be delivered on Jan 30, 2026.
