Algoma Wins Court Dispute against Bankrupt Mingde Heavy
- Business & Finance
UK Arbitration Tribunal in London has ruled in favour of Canadian Algoma Central Corporation with regard to a contract dispute involving three shipbuilding contracts between Algoma and Chinese shipbuilder Nantong Mingde Heavy Industries Stock Co. Ltd.
“We are extremely pleased that the Tribunal has acted quickly to decide on this matter, given the bankruptcy of the shipyard”, said Ken Bloch Soerensen, President and CEO of the Corporation.
“We will now proceed to make a formal demand for reimbursement of our instalment payments as provided for under the terms of the contracts. The funds intended for these ships will be redirected towards investment in replacement fleet renewal contracts that we have announced in recent months.”
Algoma signed contracts in 2010 to build six Equinox Class bulk freighters to replace aging ships in its domestic dry-bulk fleet. As a result of the bankruptcy of the shipyard, only two of these vessels have been delivered and the company has cancelled the four remaining contracts.
The Tribunal decision has resolved three of the outstanding claims and claims for the remaining contract are being pursued.
Algoma operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes – St. Lawrence Waterway, including 18 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and seven product tankers. The company has announced contracts for seven domestic dry-bulk vessels as part of its on-going fleet renewal program.