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Sembmarine, Marco Polo dispute reaches boiling point as firms enter into arbitration
Senior management resolution, mediation couldn’t cut it.
Sembcorp Marine (Sembmarine) and Marco Polo Marine (MPM)'s legal battle is heating up, as Sembmarine announced that the two firms have entered into arbitration.
According to an update by Sembmarine, its subsidiary, PPL Shipyard (PPLS) on December 1 served a termination notice on MPD, terminating a contract after Marco Polo Drilling (MPD) failed to pay the second disbursement of 10% of the contract price.
The expected payment amounts to US$21.43m, or roughly $28.93m. It was due 30 November 2015.
PPLS then commenced an action in the Singapore High Court on 1 December against MPM for the amount due under the two parties’ agreement.
Sembmarine reports that PPLS and MPD referred the dispute to their senior management and to mediation. However, the dispute between the two remain unresolved.
“PPLS has on 7th April 2016 served a Notice of Arbitration to commence arbitration proceedings against MPD,” Sembmarine states.
Following PPLS serving the arbitration notice, Sembmarine further notes PPLS has also separately received a Notice of Arbitration from MPD and MPM purporting to commence arbitration proceedings against PPLS.
Sembmarine reports it will make further announcements when necessary.
“The matter is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending 31 December 2016,” notes Sembmarine.
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