Keppel Offshore & Marine subsidiaries receive arbitration request

The counterparty has withheld about US$11.3m and claimed payment of US$31.2m from the subsidiaries.

Keppel Corporation Limited said two of Keppel Offshore & Marine Limited’s wholly-owned subsidiaries received a request of arbitration from a counterparty to two contracts over price reduction claims.

Keppel said the claimant was a counterparty to two engineering, procurement, and construction contracts relating to Floating Production Storage and Offloading Units (EPC Contracts).

“The Claimant has withheld a total of approximately US$11.3 million due to the Respondents under the EPC Contracts and has claimed a further payment from the Respondents of approximately US$31.2 million, on the basis that the Claimant is allegedly entitled to a price reduction under the EPC Contracts,” it said in a release on Wednesday.

The two subsidiaries of Keppel Offshore & Marine, in consultation with legal advisors, deny the counter party’s “alleged right to such price reduction” and “vehemently challenge” its right to withhold payments due to them and its “supposed right to claim such price reductions, Keppel said.

“The Respondents intend to vigorously defend the Claim and in addition, seek remedies, including counterclaims for the sums unduly withheld by the Claimant, against the Claimant to the fullest extent under the EPC Contracts and at law,” Keppel said.