Singaporean rig builder Sembcorp Marine is headed to court to settle a dispute with Marco Polo Marine over the termination of a $214.3 million jack-up rig construction contract signed in February 2014.
Marco Polo Marine, a Singapore-based logistics company, terminated its contract for the rig with Sembcorp Marine’s subsidiary PPL Shipyard in November 2015 citing the shipyard’s “failure to comply with certain of its material contractual obligations” after cracks were found in all three of the rig’s legs. In addition to terminating the contract, Marco Polo is also seeking a refund from PPL of its initial payment of about $21.4 million.
Sembcorp Marine claims that Marco Polo is the one who has breached the contract by failing to pay a second payment of about $21.4 million due by December 2015. Sembcorp Marine wants Marco Polo to pay the second payment and any other obligations under the original contract.
Marco Polo placed the order in February 2014 calling for one Pacific Class 400 jack-up rig to be built by PPL Shipyard for delivery in Q4 2015.
Arbitration proceedings in the Singapore High Court by both parties commenced Thursday.