Singapore: Marco Polo granted stay of legal action in rig dispute case

Marco Polo Marine, a Singapore-based marine logistic services provider, has won a grant of stay of legal proceeding initiated by the PPL Shipyard against the company.

To remind, the PPL Shipyard, a Sembcorp Marine subsidiary, in December 2015 started a legal action against Marco Polo over a jack-up rig contract termination the company had ordered in 2014. The shipyard was demanding that Marco Polo pays the second 10% of the contract price amounting to US$21.43 million, plus interest.

Marco Polo dismissed the PPL move, saying the shipyard had no basis to start legal action against the company in the Singapore courts.

In response to the legal proceedings initiated by PPL, Marco Polo then applied for a stay of the court proceedings in favour of arbitration.

In a statement on Monday, Marco Polo said: “The Board is pleased to inform Shareholders that the Court has on 22 April 2016 granted the Company’s application for a stay of the entirety of the court proceedings instituted by PPL in favour of arbitration. In addition, the Court has ordered costs of the application to be paid by PPL to the Company on an indemnity basis.”


The contractual dispute between the parties began in November 2015, when Marco Polo Drilling broke off a rig construction deal it had with the PPL Shipyard, a Sembcorp Marine subsidiary.

At the time, Marco Polo said it would terminate the $214 million rig construction deal it had signed in February 2014, with PPL Shipyard, citing cracks found on the jack-up unit’s legs. Marco Polo then sought a $21.4 million refund from the yard, which was a 10% instalment it had paid to the shipyard.

Responding to Marco Polo’s claims, the shipyard said it disagreed with the allegations, adding it would regard the Marco Polo move as a repudiatory breach of the contract, and would terminate the contract and claim amounts due under the contract against MP Drilling and its guarantor Marco Polo Marine Ltd.

The two companies are now looking to resolve the dispute through arbitration proceedings, as announced on April 7, 2016.

In a separate statement issued on Tuesday, Sembcorp Marine said that the stay of the action started by PPL Shipyard in the Singapore High Court is not a dismissal of PPLS’ claim against Marco Polo Marine for the amounts due under the Contract.

According to SembMarine, PPL Shipyard will pursue the claim either by way of an appeal against the stay to continue the action in the High Court, or pursue the claim at the arbitration proceedings.

The article has been updated with Sembcorp Marine’s statement.

Offshore Energy Today Staff

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