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 only per day, up to a maximum of USD5 million only.
Thaumas Marine did not receive the rig on the appointed time frame until on the 11 September, or 73 days after the cancellation date, making the Chinese shipbuilders liable to pay Thaumas Marine for late delivery at around USD3.65 million.
Thaumas Marine discovered in April that several critical and major non-conformities of the vessel’s parts and equipment had significantly deviated from the technical specifications as agreed upon the rig construction contract.
As such, Thaumas Marine stated that 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 claims amount to USD5.65 million.
In the meantime, Coastal Contract mentioned in its filing to Bursa Malaysia that Thaumas Marine is also seeking to settle the shipbuilding dispute amicably.