South Korean shipbuilder Hanwha Ocean has been hit with an arbitration claim expected to exceed $1bn from Russian LNG project company Arctic LNG 2 over agreements linked to three cancelled Arc7 LNG carriers, according to a regulatory filing.
Arctic LNG 2 filed for arbitration with the Singapore International Arbitration Centre on 1 September. The initial claim is $1bn, or Won1.3703tn (about $1.02bn at the current exchange rate), equal to 22.2% of Hanwha Ocean’s consolidated equity of Won6.175tn (about $4.59bn) at the end of 2025. The $1bn figure was submitted without a detailed breakdown.
Arctic LNG 2 expects the claim to exceed that amount, with the final figure to be refined during the proceedings. The dispute concerns alleged breaches of Step-In Agreements linked to shipbuilding contracts terminated by Hanwha Ocean.
Hanwha said it “intends to actively respond to the arbitration proceedings while continuing its efforts to reach an amicable resolution of the dispute.”
The underlying contracts were signed on 9 October 2020 with Cyprus-based Elixon Shipping Company Limited, Azoria Shipping Company Limited and Glorina Shipping Company Limited for three 172,410-cbm Arc7 icebreaking LNG carriers.
The vessels had an aggregate contracted construction cost of $872.1m and were intended for 30-year charters to Arctic LNG 2.
Hanwha terminated the contracts in 2022, citing contractual breaches by the shipowners and its inability to build the vessels because of export-control restrictions affecting Russia.
The Arctic LNG 2 case is separate from three SIAC arbitrations launched by Elixon, Azoria and Glorina in May 2023. Those claims range from $174.4m to $872.0m.
As of 31 March 2026, tribunals had been constituted in the three proceedings and the parties had exchanged written submissions and evidence.
Hanwha Ocean, formerly Daewoo Shipbuilding & Marine Engineering, is a South Korean shipbuilder active in commercial vessels, naval ships and offshore facilities.
Arctic LNG 2 is the operator of a Russian LNG project in which Novatek holds a 60% interest. Novatek is a Russian natural gas producer.