Seatrium unit files arbitration proceedings over dispute with consortium partner Aibel

SINGAPORE - Seatrium New Energy (SNE), a wholly owned subsidiary of Seatrium, and Norwegian energy services firm Aibel have filed arbitration proceeds in relation to a consortium formed for a converter platform project.

The parties are disputing the distribution of revenue and costs incurred in relation to the project to design, engineer, construct and install a 900MW offshore converter platform for end-customer TenneT Offshore, said Seatrium on Jan 22.

They have also lodged claims against one another for breaches concerning the scope of works and disagreements regarding the allocation of responsibilities under the project, and have agreed to file their arbitration requests to the Stockholm Chamber of Commerce’s arbitration institute.

“The requests for arbitration arise out of differences between the parties under the consortium agreement, and the mutual desire for those differences to be amicably resolved by an independent tribunal,” Seatrium said.

“SNE will prosecute and protect its position and, where appropriate, will vigorously defend Aibel’s claims,” the group said.

Notwithstanding the commencement of proceedings, the parties are continuing to work on the project, with delivery targeted for 2026, said Seatrium. The converter platform is currently in Germany’s North Sea.

The financial impact arising from the proceedings will depend on the outcome of the arbitration, said Seatrium.

The group added that it is currently “unable to definitively ascertain the financial impact, if any”, given that the arbitration proceedings are at a preliminary stage.

The dispute

The consortium agreement had outlined various scopes of work – some of which was to be executed jointly, while others were to be implemented on a solo basis.

Seatrium said that the design of the converter platform, which was provided by Aibel, underwent multiple changes and was not finalised in a timely manner, whereas SNE fulfilled its individual scope of work in Singapore.

Both parties agreed that Aibel would take responsibility for works under SNE’s individual scope that were uncompleted as at October 2023 – when the platform sailed away from SNE’s Singapore yard – as a result of its delay in finalising the design, Seatrium said.

In relation to their claims against one another for breaches concerning individual scopes of work, SNE and Aibel are seeking payment demands of around €180 million (S$270.23 million) and €113 million, respectively, from each other.

Aibel has also made a claim of around €17 million from SNE in relation to issues over both parties’ joint scopes of work, Seatrium said. SNE is contesting the validity of this claim and seeking clarification on the parties’ obligations and liabilities under the consortium.

According to preliminary advice SNE has received, claims under the consortium agreement that relate to individual scopes of work – to the extent that they are valid – must be satisfied using the consortium’s reserve of funds.

Moreover, these claims cannot exceed €5 million to avoid further financial exposure for either party, Seatrium said.

Seatrium shares closed down 0.5 per cent, or one cent, to $2.12 on Jan 22, after the announcement.

THE BUSINESS TIMES