Claims amounting to about US$832.2 million against three of Yangzijiang Shipbuilding’s units over alleged contractual breaches have been dismissed by arbitration tribunal in London. The amount comprises the loss of bargain and profits not upheld, based on an announcement by the company on Monday (Mar 3).
The final decision on the claimants’ claim to a right to a refund of US$3.32 million deposit has yet to be determined.*(see amendment note)
The proceedings, which were filed in 2022, relate to orders the customers placed for 10 vessels worth US$900 million.
In total, the tribunal issued 10 partial arbitration awards in relation to the 10 shipbuilding contracts. As the awards are partial, further claims can be made in future proceedings.
Yangzijiang Shipbuilding said the arbitration is not expected to have a material adverse effect on the group’s financial position for FY2025 ending December.
Last October, the mainboard-listed company revealed that these customers had terminated the contracts in 2022, shortly after placing orders for them in late 2021.
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The customers commenced the arbitration proceedings, alleging a breach of the contracts by the three wholly owned subsidiaries of Yangzijiang.
They made claims for US$835 million in compensation, including loss of profits as well as refunds of payments made, which total US$3.3 million.
The shipbuilder said in its filing on Monday that it was unable to determine the claimants’ next course of action, although the tribunal’s decision is final.
“We are closely coordinating with our legal advisers on the remaining matters and potential response strategies,” said the company.
It added that it would continue to monitor the developments of the arbitration and provide further updates where necessary.
Shares of Yangzijiang Shipbuilding ended S$0.04 or 1.7 per cent higher at S$2.42.
*Amendment note: A previous version of this story incorrectly stated that the claimants had been ordered a right to refund of US$3.32 million in deposits.
