Songa Offshore prevails in rig construction dispute with DSME

The company, which is in the midst of being acquired by Transocean, said in a press release that the English High Court gave judgment striking out DSME's application for permission to appeal the arbitration awards.

DSME was also refused permission to appeal the Court's judgment and Songa Offshore was awarded its costs in relation to the appeal.

“On the basis of the English Court's judgment, the arbitration awards previously made in Songa Offshore's favour in relation to DSME's claims in respect of the Songa Equinox and the Songa Endurance rigs are now final and unappealable,” Songa Offshore said.

“These arbitration awards are determinative of DSME's claims in respect of the Songa Equinox and the Songa Endurance rigs (and in respect of any similar claims that DSME might assert in respect of the Songa Encourage and the Songa Enabler rigs) with the outcome that no payment is due by Songa Offshore to DSME,” it concluded.

DSME had built four Cat D semi-submersible drilling rigs for Songa Offshore but in 2015 launched arbitration proceedings over the construction contracts for the first two rigs, Songa Equinox and Songa Endurance seeking damages of $329m including repayment on liquidated damages of $43.8m. DSME had alleged that inherent errors and omissions in the front end engineering design (FEED) documents had led to cost overruns and additional work. 

An arbitration tribunal in July 2017 ruled in favour of Songa Offshore. DSME then applied for permission to appeal this ruling in September and this application has eventually been struck out.

Songa Offshore added it is evaluating the pursuit of its counterclaims