Keppel to start arbitration against Seatrium for S$68.4 million related to Brazil corruption probe
Seatrium says it is seeking legal advice and will defend the claim ‘vigorously’
[SINGAPORE] Asset manager Keppel is starting arbitration proceedings against Seatrium for a S$68.4 million claim related to Brazil’s corruption crackdown, Operation Car Wash.
Seatrium had made provisions of S$82.4 million in its 2023 financial year, ended December, to indemnify Keppel against claims related to Operation Car Wash. That year, Keppel Offshore & Marine merged with Seatrium, formerly known as Sembcorp Marine. (*see amendment note)
In July this year, Seatrium announced that it would have to pay 728.9 million reals (S$168.4 million) to the Brazilian authorities, as part of leniency agreements related to the probe.
In a bourse filing on Tuesday (Aug 26), Keppel said that the S$68.4 million sum was due from Seatrium upon the latter’s signing of its final leniency agreements, under the terms of the indemnity.
The arbitration will be conducted in Singapore, in accordance with the rules of the Singapore International Arbitration Centre.
On Tuesday evening, Seatrium responded that it was consulting legal advisers on the notice of arbitration and would defend the claim “vigorously”.
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Keppel had previously issued a notice of claim for the S$82.4 million sum in 2024, which Seatrium had then contested.
Seatrium noted that the Keppel indemnity expired on Feb 28 this year, and that there were “no binding and legally enforceable agreements signed with the Brazilian authorities before the expiry”.
Therefore, Seatrium had already reversed its S$82.4 million provision in its 2024 financial year.
Keppel shares ended Tuesday at S$8.35, down 0.6 per cent or S$0.05. Seatrium closed at S$2.33, down 0.4 per cent or S$0.01.
*Amendment note: A previous version of this story said that Seatrium’s S$82.4 million provision was made in 2022. The company has clarified that the provision was recorded in FY2023.
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