Jiangsu Guoxin has finally settled its disputes with Precious Shipping over 11 ultramax bulkers after years of arbitration proceedings.
The Shenzhen-listed company said Precious will receive $40.5m by the end of this month for all disputes related to those ships, including refunds, associated interests and alleged quality issues.
Legal fees will be split equally among the parties, the shipbuilder formerly known as Sainty Marine said.
In 2013 and 2014, Bangkok-based Precious ordered a total of 14 64,000-dwt bulkers at Sainty Marine for nearly $389m.
The bulker owner took delivery of the first two vessels, namely the Issara Naree and Inthira Naree (both built 2014), but asked for compensation on claims that their fuel consumption was higher than contracted specification.
Precious then rejected the next four and alleged that they were designed or built in a defective manner and were susceptible to stern tube bearing failures.
Sainty Marine claimed this was unlawful, which the shipbuilder said was partly because it had rectified the defect before tendering the vessels to Precious.
Precious offered to take delivery of the ships if the yard was to make hefty cuts on the contract prices, but the two sides could not reach an agreement.
Eventually, Precious kept the first two ships and cancelled the other 12 newbuilding contracts. The Bangkok-listed shipowner received refunds for three of the cancelled orders but sought to recover $64m for the rest.
This has prompted a series of arbitration proceedings between the two companies since 2015.
Sainty Marine, ultimately controlled by the Jiangsu province, was renamed Jiangsu Guoxin in 2017 after corporate restructuring.
According to the company's website, it now focuses on energy and electricity markets and is no longer in the shipbuilding business.
In a regulatory filing, Precious managing director and Khalid Hashim and executive director Gautam Khurana wrote the two sides had executed an “amicable” settlement agreement to “fully and finally settle any and all” disputes and claims.
“There shall be no remaining and/or outstanding issues whatsoever between the parties,” the filing said.
