Zvezda Axes $3.5B Icebreaker Order; Samsung Heavy Calls it "Illegal Termination"

South Korean shipbuilder Samsung Heavy Industries  said on Wednesday that two orders from Russia's Zvezda worth a total of 4.85 trillion won ($3.54 billion) for icebreaker ships were cancelled due to "illegal termination by the shipowner".

Samsung Heavy said in regulatory filings that in June 2024, Zvezda shipyard unilaterally informed the South Korean company of the contract termination and insisted on the return of advance payments.

In July, Samsung filed an arbitration request with the Singapore arbitration court to affirm the illegality of the termination, while engaging in negotiations with Zvezda.

However, as the war between Russia and Ukraine dragged on, uncertainties over contract execution and business increased, and Samsung Heavy decided to terminate the contract and claim damages to protect its rights, it said.

The orders were to supply parts and blocks for 10 icebreaker LNG carriers and 7 icebreaker shuttle tankers, won in 2020 and 2021.

(Reuters)