Samsung Heavy Industries said on Jan. 16 that it won the arbitration trial with the U.S. Pacific Drilling VIII Limited (PDC) on the termination of a contract for one drill ship.
According to the company, a court in London ordered PDC to pay damages worth a total of $318 million to Samsung Heavy Industries, judging that the PDC is responsible for the termination of the drill contract.
Samsung Heavy Industries has won a $517 million order to build a drill ship from PDC in 2013 and has been building it normally in the delivery period, but the PDC has unilaterally notified it of the contract termination in October 2015, claiming a delay in the construction.
In response, Samsung Heavy applied for arbitration, citing that the termination of the PDC's contract was unjustified with no legal or contractual basis, and the arbitration court decided to pay Samsung Heavy damages because the termination of the PDC's contract is not legitimate.
“The move is meaningful in that the order holder, whose management has become difficult due to changes in the market environment, unfairly terminates the contract after intentionally delaying the construction process, and puts the brakes on the wrong behavior of transferring the losses to the shipbuilder," said an official at Samsung Heavy Industries.
