DSME Takes Songa Offshore to Arbitration
Songa EquinoxSouth Korean shipbuilding giant Daewoo Shipbuilding & Marine Engineering (DSME) is seeking arbitration against Norwegian drilling contractor Songa Offshore for refusing to pay for losses arising from delayed construction of four semi-submersible drilling rigs due to Songa’s faulty designs, according to local media.
DSME filed a compensation claim against Songa with the London Maritime Arbitrators Association (LMAA).
A DSME spokesman was reported as saying that the shipbuilder incurred almost USD 844 million loss stemming from the delays in the construction of the rigs ordered by Songa in 2011 and 2012, due to their faulty designs.
”DSME has delivered notices of arbitration in respect of the construction contracts for Songa Offshore’s Cat D-rigs. No details regarding the dispute have been included by DSME in the notices,” Songa said in an official statement.
”As informed by Songa Offshore in its first quarter 2015 interim financial report, DSME has experienced significant delays and cost overruns during the Cat D project. Irrespective of that, the Company continues to be of the view that any attempt to recover cost overruns is of no merit and will defend its position vigorously.”
DSME delivered the first of four rigs - Songa Equinox - in June 2015, after an approximate 12-month delay.
The remaining three rigs are scheduled for delivery in the coming months, regardless of the outcome of the arbitration, DSME says.
DSME, one of South Korea’s big three shipyards, posted an operating loss of KRW 2.39 trillion (USD 2.1 billion) for the quarter ended June 30, confirming media predictions that saw the shipbuilder’s shares plunge by 30 % earlier this month.
World Maritime News Staff
