UK-based offshore drilling contractor Awilco Drilling has expressed disappointment with the arbitration tribunal ruling in favour of Singapore’s Keppel shipyard in the first arbitration case.
Awilco Drilling has been in dispute with Keppel shipyard since 2020 over two rigs – Nordic Winter and Nordic Spring – after the UK-based player cancelled both orders in 2020 due to an alleged breach of contracts, which Keppel denied. Originally, Awilco ordered these rigs in 2018 and 2019, respectively.
As Keppel FELS submitted claims concerning amounts recoverable due to termination provisions in the contracts for both Nordic Winter and Nordic Spring , a statement of claims was received from the firm in the amount of $424.9 million for the first rig and $268.9 million for the second one. However, these claims were vehemently denied by Awilco.
Within its 2Q 2022 update in August 2022, Awilco disclosed that the tribunal hearing for Rig 1 was scheduled to begin in October 2022 with an award expected in 1Q 2023 while the hearing for Rig 2 was likely to follow in May 2023.
In an update on Friday, 21 April 2023, Awilco revealed that it had received the arbitration tribunal ruling regarding the termination of the newbuilding contract between Awilco Rig 1 Pte. Ltd. (AR1) and Keppel FELS Limited for the construction of a semi-submersible drilling rig, as a result of breaches under the vessel construction contract. This ruling was awarded in favour of KFELS.
As a result, the UK player explains that AR1 is “disappointed with the Tribunal’s decision and is currently reviewing the award to establish if grounds exist for appeal and, if so the merits of such an appeal.” The company plans to provide more information once the detailed review of the arbitration award has been completed.
After completing t he sale of the stacked WilHunter rig in June 2022, Awilco Drilling was left with no other rigs in its fleet, thus, its operations consist only of the arbitration proceedings against Keppel FELS. Due to this, the board of directors concluded in November 2022 that the listing of the firm’s shares should be transferred from the main list of the Oslo Stock Exchange to Euronext Growth Oslo.