Keppel FELS wins! Court ruling: Shipowner's order cancellation is invalid.
2023-04-28 09:00
After two years, the dispute over the cancellation of the first drilling platform between Keppel FELS, a Singaporean offshore giant, and Awilco Drilling, a Norwegian listed drilling platform owner, ended with the shipyard's victory.
On April 21, Awilco Drilling announced that it had received the ruling from the arbitration tribunal regarding the arbitration of its subsidiary Awilco Rig 1 and Keppel FELS on the construction contract of the semi-submersible drilling platform. The court ruled in favor of Keppel FELS. Awilco Drilling is currently reviewing the ruling to determine whether there are grounds for appeal.
According to International Ship Network, Awilco Drilling ordered two Moss Maritime CS60 ECO MW type semi-submersible drilling platforms, "Nordic Winter" and "Nordic Spring," from Keppel FELS, a Singaporean drilling platform builder, between 2018 and 2019. At that time, the price was as low as US\$425 million, setting a record low for such drilling platforms in recent years.
However, in June 2020, Awilco Drilling cancelled the construction contract for the first drilling platform, "Nordic Winter," on the grounds that the shipyard had breached the contract, and demanded that Keppel FELS return the US\$54.7 million installment payment that had already been paid. Keppel FELS then terminated the construction contract on the grounds that the shipowner had not completed the installment payment, refused to refund the money, and initiated arbitration.
In December of the same year, Keppel FELS terminated the construction contract for the second drilling platform, "Nordic Spring," on the grounds that the shipowner was unable to make installment payments as required by the contract. Awilco Drilling subsequently also announced the cancellation of the order for "Nordic Spring," and demanded that Keppel FELS return the US\$43 million installment payment and related interest that had already been paid.
In October 2022, a hearing was held for the arbitration of the cancellation dispute over "Nordic Winter," and the arbitration process was completed on January 13, 2023. In addition, the hearing for "Nordic Spring" is expected to be held in May, and Awilco Drilling estimates that it is unlikely that the arbitration process will be completed before the third quarter.
According to Keppel FELS' claim, Awilco Drilling needs to pay US\$424.9 million in compensation for "Nordic Winter," while the claim amount for "Nordic Spring" is US\$268.9 million. However, Awilco Drilling strongly denies the allegations.
It is reported that these two drilling platforms of Awilco Drilling are designed to operate in harsh environments such as the Norwegian continental shelf, the UK continental shelf, and the Barents Sea. They will be the most environmentally friendly drilling platforms in the harsh environment market, with a maximum operating water depth of 1500 meters, a variable deck load capacity of 5000 tons, and accommodation for 140 people. Equipped with a hydraulic lifting system with a lifting capacity of 2 million pounds, it has an optimized 12-point thruster-assisted mooring system to ensure position keeping. Other features include hybrid power supply and energy saving.
After completing the sale of the idle drilling platform "WilHunter" in June 2022, Awilco Drilling currently has no drilling platforms in its fleet, and its business only involves arbitration proceedings against Keppel FELS. Therefore, the company decided in November 2022 to transfer its stock listing from the Oslo Stock Exchange to the Euronext Growth Oslo.
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