Seatrium unit faces 130 million euros in claims from consortium partner amid arbitration proceedings

[SINGAPORE] Seatrium New Energy (SNE), a wholly owned subsidiary of Seatrium , and Norwegian energy services firm Aibel have filed arbitration proceeds in relation to a consortium formed for a converter platform project.

The parties are disputing the distribution of revenue and costs incurred in relation to the project to design, engineer, construct and install a 900 megawatt offshore converter platform for TenneT Offshore, said Seatrium on Thursday (Jan 22).

They have also lodged claims against each other for breaches concerning the scope of work and disagreements regarding the allocation of responsibilities under the project.

The parties have agreed to file their arbitration requests to the Stockholm Chamber of Commerce’s arbitration institute.

SNE is seeking a payment of 180 million euros (S$270.2 million) from Aibel and faces claims of around 130 million euros from its consortium partner.

“The requests for arbitration arise out of differences between the parties under the consortium agreement, and the mutual desire for those differences to be amicably resolved by an independent tribunal,” Seatrium said.

“SNE will prosecute and protect its position and, where appropriate, will vigorously defend Aibel’s claims,” the group added.

Notwithstanding the commencement of proceedings, the parties are continuing to work on the project, with delivery targeted for 2026, said Seatrium. The converter platform is currently in Germany’s North Sea.

The financial impact arising from the proceedings will depend on the outcome of the arbitration, said Seatrium.

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The group added that it is currently “unable to definitively ascertain the financial impact, if any”, as the arbitration proceedings are at a preliminary stage.

The dispute

The consortium agreement outlined various scopes of work, some of which were to be executed jointly, while others were to be implemented on a solo basis.

Seatrium said that the design of the converter platform, which was provided by Aibel, underwent multiple changes and was not finalised in a timely manner, whereas SNE fulfilled its individual scope of work in Singapore.

Both parties agreed that Aibel would take responsibility for works under SNE’s individual scope that were uncompleted as at October 2023 – when the platform sailed away from SNE’s Singapore yard – as a result of Aibel’s delay in finalising the design, Seatrium said.

In relation to their claims against one another for breaches concerning individual scopes of work, SNE and Aibel are seeking payment demands of around 180 million euros and 113 million euros, respectively, from each other.

According to preliminary advice SNE has received, claims under the consortium agreement that relate to individual scopes of work must be satisfied using the consortium’s reserve of funds.

Moreover, these claims cannot exceed five million euros to avoid further financial exposure for either party, Seatrium said.

Aibel has also made a claim of around 17 million euros from SNE in relation to issues over both parties’ joint scopes of work, Seatrium said.

SNE is contesting the validity of this claim and seeking clarification on the parties’ obligations and liabilities under the consortium.

Seatrium shares fell 0.5 per cent or S$0.01 to close at S$2.12 on Thursday, after the news.