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SWS hit by $19m arbitration claim over delayed jack-up newbuild

SWS hit by $19m arbitration claim over delayed jack-up newbuild
Shanghai Waigaoqiao Shipbuilding (SWS), subsidiary of China State Shipbuilding Corp (CSSC), has been hit by a $19.36m arbitration claim from Singapore-based ESSM over a jack-up drilling rig contract.

CSSC announced to the stock exchange on Friday that ESSM is claiming $19.36m in downpayment and interest from SWS as the yard has failed to deliver the newbuild rig on time.

The arbitration has been filed in London, UK.

The rigbuilding contract was entered into back in July 2013 between ESSM and SWS with the financial details kept confidential. Construction of the rig at SWS had commenced in March 2014 and delivery was planned for late-2015 to early-2016.

On 28 June last year, ESSM informed SWS that it wanted to terminate the contract due to late delivery by the shipyard. The dispute dragged on for a year before ESSM decided to seek arbitration this month.

Privately-owned ESSM, founded in 2013, the same year that it inked the rigbuilding contract, was described as a service provider in the oil and gas exploration sector.

CSSC said the dispute may have a negative impact on the shipyard’s earnings, and the group is actively seeking a resolution.

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