COSCO resolves drillship spat
- Business & Finance
China’s Cosco Dalian shipyard has, through arbitration in London, resolved a dispute it had with its client Dalian Deepwater Developer, regarding a contract termination for the construction of a deepwater drillship. The shipyard does not need to make any further payments to its client.
To remind, on August 5, 2013, Dalian Deepwater Development served a notice to COSCO Dalian to terminate the $500 million worth contract for the Dalian Developer drillship, ordered in July 2010.
According to the original agreement from 2010, the vessel was supposed to be delivered to the owner in the third quarter of 2012.
Since that did not happen, Dalian Deepwater Developer decided to cancel the contract citing delay in the delivery of the vessel as the reason behind the decision.
Upon informing the shipyard of the decision to terminate, the client then, in September, 2013, filed for arbitration in London, seeking a refund of the first instalment ($110 million) paid on the drillship contract and other advances.
COSCO said that on October 7, 2013, the shipowner rejected COSCO Dalian’s proposal to settle the matter.
In a statement issued on Friday, September 4, COSCO said the arbitration award had been issued, ruling that COSCO Dalian, having repaid to the shipowner the first instalment together with interest was not liable to the shipowner for any further liabilities.
“The Company will make announcements of any material development in relation to the DP3 Deepwater Drillship at the appropriate junctures,“ COSCO added.
Offshore Energy Today staff