Malaysian Boustead Heavy Industries Corporation Berhad’s (BHIC) subsidiary Boustead Penang Shipyard (BPS) and its compatriot shipowner Sealink International Berhad have settled a four-year dispute over a shipbuilding contract, with Sealink accepting a sum of USD 1.5 million.
The arbitration, which started in December 2012, was related to the violation of the shipbuilding contract signed between BPS and Sealink International Berhad’s subsidiary Sealink Sdn Bhd on April 3, 2008, for the construction and sale of two 7,000 dwt oil carriers/chemical carriers.
In accordance to the settlement, BPS said it proposed and Sealink accepted a settlement sum of USD 1.5 million as full and final settlement of all claims and counterclaims in this reference.
BPS and Sealink have also agreed that the property in and ownership of all and any goods and materials bought or supplied by either party for the construction of the vessels, presently located at BPS’ premises, shall if not already so vested, vest in BPS.
According to BHIC, the settlement is not expected to have any material impact on the earnings of BHIC Group for the financial year ending December 31, 2016.
In addition, Sealink said that the settlement will be positive to the earnings and net assets of Sealink International Berhad for the financial year ending December 31, 2016, also improving the cash flow position of Sealink Sdn Bhd.