Malaysia’s Daya Materials has announced that its subsidiary DVL has been given notice of arbitration by SBM offshore in relation to a dispute over the proposed sale of the Diving Support and Construction Vessel ‘SBM Installer’.
To remind, SBM Offshore in November last year announced it had enter into a Memorandum of Understanding with, DVL a subsidiary of Daya Materials Berhad, under which DLV was supposed to acquire the SBM Installer construction vessel for $180 million.
A month after the announcement, SBM Offshore, based in The Netherlands, said that the previously signed MoU would not proceed as planned, saying that DVL failed to secure financing for the transaction and did not receive permission from its parent company Daya Materials Berhad (DMB) to proceed with the deal.
However, Daya Materials Berhad has said that DVL had no intention to purchase the vessel and as such has not attempted to meet any of the terms of the MOA.
“The MOA was signed without the knowledge or prior approval of the Board or board of directors of DVL. No shareholders’ approval of DVL was sought or given. The press release issued by SBM on 11 November 2013 was inaccurate. DVL had notified SBM to terminate the MOA,” Daya Materials Berhad said at the time.
In a Bursa Malaysia filing issued Thursday, August 7, 2014, Daya Materials Berhad said that DVL had through its solicitors, received a letter from SBM’s lawyers dated 6 August 2014 giving DVL notice that SBM has appointed its arbitrator in relation to all disputes arising out of and/or in connection with the MOA.
“DVL is to appoint its arbitrator within 14 calendar days, failing which SBM shall take steps to appoint its nominated arbitrator as sole arbitrator,” the filing read.
“DVL is seeking legal advice from its solicitors and the company will make the necessary announcements as and when there are material developments in this case. At this juncture DVL has not received the details of SBM’s claims and the Company is therefore not in the position to assess the impact of the arbitration on the operations and financial position of DVL, the Company and the group,” Daya Materials Berhad said in a statement.
An arbitration is a procedure described as a fast way to get a decision when one is in a dispute. Arbitration is more flexible and less formal than court. In an arbitration, two sides present their evidence to an arbitrator. The arbitrator decides who wins and who loses. An arbitrator does the job that a judge or jury would normally do in court.