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Biz News Korea(Eng)
Hyundai Heavy reaches an agreement with Fred Olsen on drilling rig dispute
- Collected
- 2016.08.23
- Distributed
- 2016.08.24
- Source
- Go Direct
The two companies announced on Tuesday that they have reached a settlement to terminate their dispute and deal. According to the agreement, Hyundai Heavy will pay back the first installment of $176 million to the Norwegian company. The Korean shipbuilder won the order in May 2012 with the delivery was set for March 2015. But the delivery was delayed after Fred Olsen repeatedly found fault with design and other procedures.
Hyundai Heavy in October last year sought arbitration from the London Maritime Arbitrators Association (LMAA) on October last year to ask for an additional payment of $167 million from Fred Olsen and extension of delivery date.
Fred Olsen countered back by demanding Hyundai to repay its advance payment of $186 million plus accrued interest in liability for the delay, and Hyundai filed another counter suit claiming $519 million in damages.
They struck out-of-court settlement with Hyundai Heavy agreeing to return the advance payment of $176 million and withdraw suits.
Hyundai Heavy said that the repayment would not translate into additional losses as it had already reflected losses of 220 million won worth in the balance sheet of the third quarter last year.
By Park Yong-beom
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