By Melisa Cavcic
Copyright offshore-energy
A subsidiary of the Singapore-headquartered Seatrium has opted to continue its arbitration fight, following a court ruling which dismissed its appeal to halt a multimillion-dollar payment in a legal rig contract dispute.
The Asian giant had previously assumed certain potential claims related to a rig contract, where the original contract value was adjusted for cost escalation, with the validity of those adjustments subsequently challenged in a litigation involving the Singapore-based player’s majority-owned joint venture company, which was commenced and inherited by the firm before the merger.
Given the court’s dismissal of Seatrium affiliate’s appeal for the injunction from the Singapore court to restrain any payment of money under the $126.6 million standby letter of credit (SBLC) issued in favor of its undisclosed customer, this unnamed company is now entitled to payment under the SBLC.
As a result, the Singapore player’s entity will continue to pursue its claims in arbitration proceedings to resolve the contractual dispute with its customer and seek recovery of this payment for which provisions had already been made in its accounts for the full amount payable under the SBLC.
“Shareholders of the company and potential investors should exercise caution when dealing in the securities of the company. They should consult their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubt about the actions they should take,” highlighted the Singapore-headquartered giant.
No adverse impact is expected on Seatrium’s consolidated earnings per share or net tangible assets per share for the financial year ending December 31, 2025, from full payment under the SBLC.
This court ruling comes over a year after Seatrium reached an understanding with the UK-based Awilco Drilling for the settlement of two arbitration cases related to rig termination deals in the wake of arbitration tribunal rulings.
These rulings had different outcomes, with Seatrium New Energy Limited, formerly Keppel FELS, emerging as the winner in the first one, and Awilco in the second.
