Sembcorp Marine’s subsidiary PPL Shipyard has settled a dispute with offshore services provider Marco Polo, over a 2015 canceled jack-up rig order.
The contractual dispute between the two Singapore-based parties began in November 2015, when Marco Polo Drilling broke off a rig construction deal it had with the PPL Shipyard, a Sembcorp Marine subsidiary.
At the time, Marco Polo said it would terminate the $214 million rig construction deal it had signed in February 2014, citing cracks found on the jack-up rig’s legs. Marco Polo then sought a $21.4 million refund from the yard, which was a 10% installment it had paid to the shipyard. The rig had had been 98% completed at the time when the dispute started.
On the other hand, the shipyard had said it disagreed with the allegations adding Marco Polo was in a repudiatory breach of contract, accusing the latter of an attempt to avoid paying second disbursement of 10% of the contract price ($21.4 million).
Days later, the shipyard itself served its own termination notice on Marco Polo Drilling over the latter’s failure to pay the second disbursement of 10% of the contract price by November 30, 2015. It still maintained that Marco Polo owed it $21.4 million, plus interest.
The two companies then in April 2016 initiated arbitration proceedings against each other.
In two separate statements on Monday, Sembcorp Marine and Marco Polo said the arbitration was settled.
Under the agreement, a consent award will be given in favor of PPL Shipyard for the whole of its claim and interest, and Marco Polo will withdraw its claims against PPL.
Marco Polo said the decision to settle was a commercial one, made in view of the ongoing refinancing and debt restructuring exercise.
Offshore Energy Today has reached out to Sembcorp Marine, seeking more details on the settlement agreement, and on the status of the rig in question.
A Sembcorp Marine spokesperson said the company would as and when necessary “issue an announcement on the outcome of this matter.”
As for the rig in question, the spokesperson said the rig was recently sold to Borr Drilling, as part of the driller’s nine-rig order.