Malaysia-listed shipbuilder Coastal Contract is seeking damages of USD5.65 million from China’s Yantai CIMC Raffles Offshore and Dynamic Driller over delays in construction of a jack-up drilling rig.
The claim is made by Thaumas Marine, a subsidiary of Coastal Contracts, which filed a notice of arbitration with the Singapore International Arbitration Centre on 9 October against the Chinese firms.
Initially, the shipbuilding contract was for a new JU2000E F&G design jack-up drilling rig. The rig was scheduled for delivery on 30 April 2015 or no later than the cancellation date of 30 June, failing which the builders would be liable for liquidated damages of USD50,000 per day, up to a maximum of USD5 million.
Thaumas Marine did not receive the rig within the appointed timeframe. It arrived on 11 September, or 73 days after the cancellation date, making the Chinese shipbuilders liable to pay Thaumas Marine a late-delivery settlement of about USD3.65 million.
Thaumas Marine discovered in April that several critical and major non-conformities in the vessel’s parts and equipment had significantly deviated from the technical specifications agreed upon within the rig construction contract.
As such, Thaumas Marine said it had incurred damages amounting to USD2 million and the offshore services provider will be claiming that from the Chinese firms as well, making the total claim USD5.65 million.
Coastal Contract reported in a filing to Bursa Malaysia that Thaumas Marine was seeking to settle the shipbuilding dispute amicably.