Cosco Corporation (Singapore) in legal spat over drillship deal

Cosco Corporation (Singapore) said a subsidiary, Cosco (Dalian) Shipyard Co, has been served notice by a customer to terminate a deal to build a deepwater drillship valued at more than US$500 million (S$625 million).

This was allegedly due to a delay in the delivery of the ship although contruction work for it is substantially completed, Cosco Corp said.

The customer, Dalian Deepwater Development, has submitted a request for arbitration in London and is claiming a refund on first instalment paid amounting to US$110 million and other advances paid, plus interest, costs and damages.

Cosco Dalian has appointed legal advisers in London and will participate in the arbitration.

Several potential buyers have expressed interest in acquiring the drillship since the notice of termination was received.

Separately, Cosco Corp said that Cosco Dalian had secured a deal to build a cargo and training ship worth 325 million yuan (S$66.2 million). It has also clinched a deal to build a jack-up rig for US$180 million.