China Ocean Industry going to arbitration over undelivered ships

China Ocean Industry going to arbitration over undelivered ships

China Ocean Industry has announced that it intends to settle a shipbuilding dispute regarding undelivered ships by arbitration.

Jiangzhou Union Shipbuilding, a subsidiary yard of China Ocean Industry, has been in negotiations with two shipowners regarding six undelivered vessels. The two owners are believed to be German companies Auberbach Schiffahrt and Briese Schiffahrt, who ordered four multipurpose vessels and two multipurpose vessels separately at Jiangzhou Union Shipbuilding in 2014.

According to China Ocean Industry, a new potential customer has indicated the desire to take over two of the six vessels and has been willing to continue with construction, but one of the two shipowners expressed little desire to accept delivery of the other four vessels.

“In view of the slow negotiation progress and the failure to reach a consensus between the parties, the board was of the view that settling the matter by arbitration as stated under the shipbuilding contracts might be more cost-effective and could allow the group to devote more time to discuss with the customer’s finance bank as disclosed in the announcements. The group is now in the course of arbitration process while negotiation with the customer is still ongoing,” the company said in a release.

In March, China Ocean Industry entered into a joint venture agreement with Yangzijiang Shipbuilding, under which Yangzijiang Shipbuilding will be responsible for managing Jiangzhou Union Shipbuilding and restoring normal production and operations at the yard.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.

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