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Atlantic Navigation, unit receive arbitration notices for US$3m and US$5.8m for balance payment, cancelled order
ATLANTIC Navigation Holdings (Singapore) Limited and its subsidiary Atlantic Maritime Group FZE (AMG) have received notices of arbitration from a Chinese shipbuilder regarding a balance payment of about US$3 million for a shipbuilding agreement, and damages of US$5.8 million on a cancelled order.
In a Singapore Exchange filing on Thursday, Atlantic Navigation said the supplier, Guangxin Shipbuilding & Heavy Industry Co Ltd, had entered into a contract in Sept 2013 to construct a 75-metre platform supply vessel, which it would sell to AMG. As AMG's parent company, Atlantic Navigation guaranteed the outstanding sum to Guangxin.
Guangxin issued its first arbitration notices when AMG failed to make the balance payment of US$3 million.
In a separate contract dated April 2014, Guangxin was to construct a liftboat vessel for AMG, and Atlantic Navigation also executed performance guarantees on the contract. Guangxin later served a notice of rescission to AMG on the liftboat vessel contract on March 8, 2017. It then sold the vessel to a third party, and issued a second round of arbitration notices to claim damages of US$5.8 million suffered from the sale of the liftboat to the third party, as well as related interests and costs.
Atlantic Navigation and AMG have appointed a legal advisor in Hong Kong to respond to the arbitration notices, and are negotiating with Guangxin to amicably settle the disputes. The group said it has paid US$500,000 to the supplier under the first arbitration notices, and discussions are ongoing for a proposed instalment payment plan.
Guangxin has agreed to withhold the arbitration proceedings under the second arbitration notices until Sept 28, on the condition that they receive the US$500,000 payment negotiated under the first arbitration notices.
Atlantic Navigation and AMG are currently waiting for Guangxin to confirm that it has received the funds and will withhold the arbitration proceedings. Atlantic Navigation will make further announcements at the appropriate juncture if there are any material developments on this matter.
Amendment note: An earlier version of this article incorrectly stated that Atlantic Navigation and AMG had received arbitration notices on US$3 million owed on a cancelled order for a 75-metre liftboat vessel. They in fact received arbitration notices on two contracts. The article above has been revised to reflect this.