Sembcorp - Marco Polo Dispute Update
Rig-builder Sembcorp Marine (SembMarine) is currently embroiled in a dispute with Marco Polo Marine over a US$214.3 million rig construction contract that Marco Polo wants terminated.
In a statement on Monday, Macro Polo reiterated its position that it is not obliged to take delivery of the rig, as Sembcorp Marine unit PPL Shipyard had failed to comply with certain contractual obligations.
A unit of Marco Polo Marine has found cracks on all three legs of the rig and is seeking a refund of about $21.4 million it paid initially from PPL. The rig builder filed a case against Marco Polo in the Singapore High Court.
Macro Polo alleged that 70 cracks were found on all three legs of the rig during a test, and more than 180 new cracks were found during a partial second test.
Marco Polo sought in November to unilaterally terminate the contract and demanded the refund of payments made.
The dispute over an order its subsidiary PPL Shipyard Pte received to build a jack-up rig for $214.3 million has begun in February 2014.
SembMarine said that Marco Polo is in "repudiatory breach" of contract and that the purported termination "is wrongful and without any justification whatsoever". It said that the rig, due to have been delivered on Monday, was "more than 98 per cent" completed when Marco Polo terminated the order.
In the latest turn of events, Marco Polo on Monday rebutted SembMarine's claim, citing defects found on the rig as grounds to terminate the contract and request a refund.
