Seatrium to start its own arbitration in US$475 million contract termination dispute
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Seatrium is seeking a declaration that the buyer wrongfully terminated the contract, among other things.
PHOTO: SEATRIUM
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- Seatrium is initiating arbitration against a Maersk affiliate over the termination of a US$475 million wind turbine vessel contract.
- Seatrium claims wrongful termination, seeking contract validation, delivery order, payment, or damages, noting the vessel is 98.9% complete.
- The financial impact is uncertain; Seatrium will deliver the vessel by January 30, 2026, despite the dispute and Maersk's arbitration notice.
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SINGAPORE - 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, 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 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 stating that the vessel, which is 98.9 per cent complete, will be delivered on Jan 30, 2026.
In response, the buyer 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 $2.15 on Nov 28, up 0.5 per cent, or $0.01, before the news.
