Songa Offshore emerges victorious from rig spat with DSME

Offshore driller Songa Offshore has won what it has described as the “final win” in its rig construction dispute with South Korea’s Daewoo Shipbuilding & Marine Engineering.

To remind Daewoo Shipbuilding and Marine Engineering, DSME, which built four Cat D semi-submersible drilling rigs for Songa Offshore, in 2015 launched arbitration proceedings in respect of the construction contracts for the two first Cat D rigs, Songa Equinox and Songa Endurance.

The claims were related to alleged cost overruns and additional work on the rigs due to what DSME alleged were inherent errors and omissions in the design documents.

DSME sought damages of $373 million including repayment on liquidated damages of $44 million.

However in July 2017, an arbitration tribunal  ruled in favor of Songa Offshore and against the Korean rig builder.

Daewoo then sought to appeal the tribunal’s ruling at the English High Court.

In a statement on Monday, March 19, 2018, Songa said that the English High Court gave judgment striking out DSME’s application for permission to appeal the arbitration awards.

DSME was also refused permission to appeal the Court’s Judgment and Songa Offshore was awarded its costs in relation to the appeal.

On the basis of the English Court’s Judgment, the arbitration awards previously made in Songa Offshore’s favor in relation to DSME’s claims are now final and unappealable, and Songa Offshore is not to pay anything to DSME.

“Songa Offshore is evaluating the pursuit of its counterclaims,” the driller said.

Offshore Energy Today Staff

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