China’s Yangzijiang Shipbuilding has been taken to arbitration in London over cancelled vessel orders worth $900m.
The Singapore-listed group said that proceedings began on 10 June and 26 September against three units: Jiangsu Tianchen Marine Import & Export, Jiangsu Yangzi Xinfu Shipbuilding and Jiangsu New Yangzi Shipbuilding.
The action relates to an alleged breach of contract for 10 orders.
Four unspecified ships were contracted on 5 November 2021, and another six on 30 December 2021.
These shipbuilding contracts were later terminated by the claimants on 24 March and 16 May 2022, respectively.
TradeWinds can see no announcements of new deals or cancellations on the Singapore exchange for these dates.
Arbitration claims total $835m, including loss of profits and a refund of instalments paid of just $3.32m.
Yangzijiang chief executive Ren Letian said: “Following consultation with its legal advisers and an evaluation of the merits of the claims in 2022, the company was advised by its legal advisers that there were no merits in the claims and [they] were highly improbable to succeed.”
The company will “vigorously” defend the legal action at arbitration, he added.
“The company has now been advised by its legal advisers that the respondents continue to have good arguable defences and, accordingly, a good arguable case that the claims should be denied,” Letian said.
Based on the evidence from the yard group’s expert witness, the claim figure has been “incorrectly measured” and is “highly inflated,” he added.
The first tranche of arbitration hearings are scheduled for November.
Yangzijiang is now working closely with its legal advisers on a defence.
