Keppel O&M suspends business with Viking O&M's entity amidst lawsuit

Viking Offshore is seeking sums over $5m for late construction of a project.

Keppel Offshore & Marine (O&M) has suspended business with a business entity of Viking Offshore & Marine, Marshal Systems, amidst proceedings between Keppel Singmarine (KSM) and Viking’s subsidiary Viking HVAC.

“Marshal has no relation to the issues in dispute in the present proceedings and should not have to suffer collateral damage from commercial pressure directed at the company,” Viking said in an announcement.

Viking HVAC’s claim arises out of a subcontract between Viking HVAC and KSM dated on or around 26 March 2013 for the design, supply and installation of a heating, ventilation, air-conditioning, and refrigeration system, wherein KSM was the main contractor and Viking HVAC the subcontractor.

Viking HVAC is claiming against KSM for a sum of $1,250,346.97 in respect of invoices issued to KSM, another sum of $3,822,898.00 in respect of variation claims against KSM, and damages for prolongation of the contract period.

On 19 April 2018, KSM filed its defence and counterclaim (D&CC), denying Viking’s claims and counterclaimed, amongst others, for alleged backcharges amounting to $3,831,999.21. “The majority of these backcharges were in the company’s opinion, unsubstantiated, excessive and/or grossly inflated, and had been previously rejected by the company with detailed reasons,” Viking said.

It replied on 28 April 2018 and a pre-trial conference (PTC) was convened by the High Court (Court) on 23 May 2018. At the PTC, KSM sought an adjournment of three weeks on the basis that it had just appointed co-counsel to represent it in the proceedings. The Court declined KSM’s request and gave timelines for parties to provide disclosure of relevant documents and fixed a further PTC on 6 July 2018.

An urgent PTC was again convened on 13 June 2018. During this PTC, KSM informed the court that it had just appointed an expert to review all of Viking HVAC’s claims and KSM’s counterclaims and on account thereof, it was requesting for four weeks to tender a revised draft of its Defence and Counterclaim (D&CC).

After hearing parties at the 13 June 2018 PTC, the Court directed for KSM to furnish its revised draft D&CC within three weeks of the PTC and convened a further PTC on 18 July 2018.

“The company trusted that KSM would have properly assessed the company’s claims and only advanced counterclaims that KSM could properly and fairly substantiate,” Viking said. “However, the company is of the view that the majority of KSM’s backcharges were unsubstantiated, excessive and/or grossly inflated.”

Viking said Viking HVAC is taking all necessary steps to expedite these proceedings and obtain early recovery of the sums due to it from KSM. “The company has given strict instructions to Viking HVAC to vigorously resist any attempts by KSM to delay the progress of this matter,” it added.