Contract conflict becomes uglier as SembMarine asserts deal with Marco Polo still valid

Termination is “wrongful” and “without justification,” says SembMarine.

In what is turning out to be an ugly kerfuffle between the two marine firms, Sembcorp’s marine arm has once again stood its ground that its contract with Marco Polo is still in effect.

SembMarine’s retaliation came about a day after Marco Polo announced that it is employing legal action to resolve the conflict.

SembMarine, in a statement, said that when Marco Polo claimed to terminate the contract, the rig was already substantially cleared for delivery.

“Based on the construction schedule, more than 98% of the Rig had been completed. The final phase of construction included a pre-load test and a jacking trial followed by non-destructive testing,” the statement said.

The statement added that any defect discovered after the period will be duly made good and retested to the standards of the Classification society and Marco Polo before delivery.

“Notwithstanding the 30 November 2015 delivery date, the contract provided that PPLS has an additional 210 days after 30 November 2015 to deliver the Rig. PPLS therefore has more than enough time to make good any defect and deliver the Rig to MPD in accordance with the contract,” the statement added.

SembMarine claims that the purported termination of the contract is wrongful and without justification.

“PPLS is of the view that the purported termination by MPD is to avoid its obligation to pay the 2nd disbursement of 10% of the contract price (US$21.43 million), that has already accrued and due to PPLS immediately on the execution of the contract,” the statement said.

“As for dispute resolution, as the contract is still subsisting, and the disputes are technical in nature, PPLS will be inviting MPD to refer the disputes to the Classification Society, whose decision shall be final and binding on the parties as provided for under the contract,” the statement added.