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.