Malaysian marine services and vessel provider Coastal Contracts was recently served with a notice of arbitration from one of its suppliers for an alleged wrongful termination of a shipbuilding contract.
The notice was served to one of Coastal Contracts’ subsidiaries for terminating the shipbuilding contract back in July 2016 due to builders’ alleged failure to deliver the vessel on time and in accordance with the terms and conditions of the shipbuilding contract.
In addition to terminating the contract, Coastal Contracts’ subsidiary had also asked the builders for a refund of all sums paid under the contract and the payment of liquidated damages in accordance with the terms of the contract.
Coastal Contracts informed on Friday that, instead of complying with the obligations under the shipbuilding contract, the builders filed a notice of arbitration alleging that the subsidiary’s termination of the contract was wrongful.
Further, Coastal added, the builders had not quantified their claim under the notice until after the subsidiary had filed its counterclaim. The builders’ current claim is $37.4 million which directly reflects the subsidiary’s counter-claim against the builders in its response to the notice of arbitration.
Coastal also said that the subsidiary is resisting the ‘meritless’ claim while at the same time pursuing its counter-claim.
Offshore Energy Today Staff