$Seatrium (S51.SG)$ Singapore International Arbitration Cent...
Singapore International Arbitration Centre found in favour of Norwegian company in historic rigs' termination dispute.
Norway’s Akastor and Seatrium of Singapore have locked horns over the amount of interest due in relation to the recent arbitration award that found in favour of Akastor.
Upstream reported on 18 Apr that Akastor had triumphed in its arbitration with Jurong Shipyard, a subsidiary of the former Sembcorp Marine, which relates to 4 drilling rigs historically ordered from the Singapore contractor.
The drilling rig contracts, which were originally entered into in 2012, were terminated by Jurong Shipyard in 2021 and 2022 after having been suspended for many years.
The Singapore International Arbitration Centre (SIAC) last week awarded Akastor's former subsidiary MHWirth (MHW) US$101.36 million as payment of termination fees. MHW was also awarded reimbursement of legal costs and certain suspension costs totalling some US$7 million, plus interest that was to have been “calculated and resolved in due course”.
Akastor on Mon noted that the arbitration tribunal imposed different orders for interest for the sums awarded, including for unpaid invoices prior to termination and the termination fees - both at a rate of 8.5% per annum, compounded quarterly.
MHWirth and Akastor, together with its claim advisors, completed their calculation of interest awarded pursuant to the tribunal’s arbitration award, concluding that some US$65 million is due as payment of interest - bringing the total gross amount awarded, including interest, to US$173 million.
“The calculation on interest has been shared with Jurong Shipyard, who has responded that it does not agree with the calculation, but Jurong has not shared its own calculation,” said Akastor.
“If the parties are unable to agree on how interest shall be calculated, the tribunal may be asked to issue further directions in that regard.”
Upstream has approached Seatrium for its comment on Akastor’s interest claim.
Akastor added that more information on the accounting impact of the drilling rigs’ arbitration award would be given in its first quarter 2024 results presentation on 25 Apr.
Although the rigs’ contracts are held by MHW, which today is a wholly owned subsidiary of HMH - that was established in Oct 2021 through the merger of Baker Hughes’ Subsea and Surface Drilling Systems business and MHW - Akastor holds full financial interest in these contracts as it was not included in the transaction when HMH was created.
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