Algoma Central Corporation says it has received payments totalling $41.7 million from two Chinese banks on refund guarantees related to the cancellation of three ocean tanker shipbuilding contracts which occurred in 2010.
In 2007, Algoma, through its wholly owned subsidiary, entered into contracts to build three 16,500 - deadweight ton product tankers in China.
Each contract contained provisions that permitted cancellation under certain conditions. These conditions were met in 2010 and Algoma accordingly issued notices of rescission to the shipyard seeking to cancel the contracts and demanding reimbursement of the instalments that had been advanced.
The matter was taken to arbitration by the shipyard and hearings were conducted before a Tribunal in London in September, 2012. The Arbitration Tribunal found in favour of Algoma in all matters in April, 2013 but the shipyard sought leave to appeal.
However, the UK commercial courts rejected the shipyard's application in November 2013 and Algoma commenced collection action immediately thereafter.