MHWirth, a subsidiary of Norwegian oil services investment firm Akastor, has received an arbitration award issued by a tribunal in a dispute with Seatrium’s subsidiary Jurong Shipyard over the termination of four drilling rig unit contracts.
As part of the ruling, MHW has been awarded an amount of $101 million as payment of termination fees.
In addition, MHW has been made eligible for the reimbursement of legal costs and certain suspension costs (totaling about $7 million), as well as interest.
Although the drilling rig unit contracts are held by MHW, which is a wholly owned subsidiary of HMH Holding, Akastor holds full financial interest in these contracts as this was not included in the transaction when HMH was created in 2021.
To remind, HMH was created through the merger of Baker Hughes’ Subsea Drilling Systems business and Akastor’s MHWirth, to form a global offshore drilling equipment company. Baker Hughes and Akastor own equal equity in HMH.
The drilling rig unit contracts were originally entered into in 2012 and were terminated by Jurong in 2021 and 2022 after having been suspended for many years.
The contracts form part of the intended deliverables under the drilling rig contracts that Jurong had entered with Sete Brasil and where a full and final settlement agreement was reached between Jurong and Sete Brasil in 2019.
Pursuant to the rule of of the Singapore International Arbitration Centre (SIAC), the arbitration award is full and final. However, the parties may within 30 days of receipt of the award request the tribunal to correct any error in computation, any clerical or typographical error or any error of a similar nature, Akastor noted.
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