Seatrium is finding itself in yet another legal pickle. Fresh after it reached an agreement on an offshore wind farm project with Maersk, Seatrium has filed arbitration proceedings against its project partner Aibel, claiming 180 million euros over differences in revenue and cost distribution.
Aibel, a Norwegian company, is in turn filing for 113 million euros.
Back in 2019, Keppel Offshore and Marine, which has yet to form Seatrium with Sembcorp Marine, won a contract to build a 900MW offshore converter platform, known as DolWin 5.
Keppel O&M won this contract as a consortium with Aibel. The customer is TenneT Offshore.
According to Keppel's May 7 2019 announcement, its share of the contract was $560 million.
Under terms of the agreement with partner Aibel, the platform was first built in Singapore and then shipped to Aibel's facility for further works, which took place in October 2023.
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According to Seatrium in its Jan 22 announcement, it has fulfilled its job scope despite multiple changes to the design of DolWin5 made by Aibel.
As indicated in the May 2019 announcement, this project was to be delivered in 2024.
Seatrium says it is "contesting the validity and substantiation of these claims and in turn is seeking declarations to clarify the parties’ obligations and liabilities" under the consortium agreement.
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"As the arbitration proceedings are at a preliminary stage, the company is unable to definitively ascertain the financial impact, if any, arising from the arbitration proceedings.
"The financial impact will also be dependent on the final outcome of the arbitration proceedings," says Seatrium.
In reaction, DBS Group Research says that this latest arbitration proceedings may weigh on Seatrium’s near-term rebound potential.
Prior to news of the arbitration, DBS had already removed the stock from its list of equity picks yesterday on tactical grounds, given the $2.16 near-term resistance level.
Seatrium shares gained 0.47% to change hands at $2.14 as at 9.52 am.
