Otto Marine disputes newbuilding cancellation
Otto Marine is disputing the cancellation by GC Rieber Shipping of a second newbuilding at its Batamec Shipyard.
Otto Marine said Polar Marine II, a joint venture 51% owned by GC Rieber, had agreed a rescheduled delivery date of October 30 this year for an offshore support vessel newbuilding being built at Batamec.
According to Otto Marine on September 25 Polar Marine II said it would issue notice to cancel the contract if the refund guarantee was not extended before September 27. However Polar Marine II said that if the refund guarantee was extended before October 1, it would withdraw notice of cancellation.
On September 27 the joint venture issued notice of termination of the contract, while Otto Marine extended the refund guarantee on September 28.
Singapore-listed Otto Marine said Polar Marine II has since refused to withdraw the notice of termination.
Otto Marine is now seeking to commence arbitration proceedings in Singapore. The company said it would “pursue the claims vigorously as it believes that it has acted properly under the terms of the shipbuilding contract”.
The contract is worth €23.5m ($35.3m) and the shipyard has so far received €4.7m in desposits and milestone payments.
The newbuilding is the second cancelled by GC Rieber at Batamec. In July Polar Marine 1 cancelled the first in a series of four offshore support vessels being built at the Indonesian yard as it was not delivered on time.
Otto Marine said Polar Marine II, a joint venture 51% owned by GC Rieber, had agreed a rescheduled delivery date of October 30 this year for an offshore support vessel newbuilding being built at Batamec.
According to Otto Marine on September 25 Polar Marine II said it would issue notice to cancel the contract if the refund guarantee was not extended before September 27. However Polar Marine II said that if the refund guarantee was extended before October 1, it would withdraw notice of cancellation.
On September 27 the joint venture issued notice of termination of the contract, while Otto Marine extended the refund guarantee on September 28.
Singapore-listed Otto Marine said Polar Marine II has since refused to withdraw the notice of termination.
Otto Marine is now seeking to commence arbitration proceedings in Singapore. The company said it would “pursue the claims vigorously as it believes that it has acted properly under the terms of the shipbuilding contract”.
The contract is worth €23.5m ($35.3m) and the shipyard has so far received €4.7m in desposits and milestone payments.
The newbuilding is the second cancelled by GC Rieber at Batamec. In July Polar Marine 1 cancelled the first in a series of four offshore support vessels being built at the Indonesian yard as it was not delivered on time.