The subsidiaries of Yangzijiang Shipbuilding will not have to pay the US$832.2 million ($1.12 billion) to its claimants, according to the arbitration tribunal in London. The amount comprises the loss of bargain and profits not upheld, according to a filing by Yangzijiang dated March 3.
The decision on the claimants' US$3.32 million deposit has yet to be determined.
The news comes after “certain entities” commenced arbitration proceedings against three of the group’s wholly-owned subsidiaries, Jiangsu Tianchen Marine Import & Export Co., Ltd., Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd., in June and September 2022 for an alleged breach of contract over 10 shipbuilding contracts.
The arbitration is not expected to affect Yangzijiang’s financial position for the FY2025 ending Dec 31 materially. The group, in its Oct 12, 2024, announcement, said it had a “reasonably good prospect of success” in the arbitration claims levelled against them.
In its latest filing, the group notes that it is “unable to determine” its customers’ next course of action and that it is “closely coordinating with our legal advisors on the remaining matters and potential response strategies”.
Shares in Yangzijiang Shipbuilding closed 4 cents higher or 1.68% up at $2.42 on March 3. Shares in the group are down 18.24% year-to-date after the US proposed fees on China’s commercial ships on Feb 22.
