MISC’s wholly-owned GKL is claiming approximately $245m from SSPC, wholly-owned by Shell, over a contract for the construction and lease of Gumusut-Kakap semi-floating production system (FPS).
“The legal proceedings were commenced to seek resolution on contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs under the contract,” MISC stated.
GKL filed a notice of adjudication and a notice of arbitration against SSPC on 23 September and 2 September this year, respectively.
However, Shell’s SSPC refuted both the notices and indicated intention to counter-claim based on allegations that GKL had failed to perform the work in accordance with the contract. “The full amount of SSPC’s claim has yet to be quantified,” MISC said. “Appointment of adjudicator and arbitrators are ongoing.”
Meanwhile, SSPC had on 19 October called upon a bank guarantee of $20m which was provided by GKL in favour of SSPC as security for the said contract.
“GKL contested the bank guarantee demand and obtained an interim injunction against the release of the bank guarantee. The court has fixed 3 November 2016 to hear both parties’ arguments on SSPC’s call on the bank guarantee,” MISC mentioned.
The legal battle came to light as MISC announced a third quarter profit of MYR134.16m ($32.08m), a sharp fall of 72.3% from the gain of MYR483.56m in the previous corresponding period.
Revenue for the three months ended 30 September 2016 was recorded at MYR2.29bn down from MYR2.51bn in the year-ago period.
Yee Yang Chien, ceo of MISC, commented: “Moving forward, to fulfill our aspiration of consistently providing better energy-related maritime solutions and services, MISC will capitalise on timely investment opportunities to ensure future business sustainability.”
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