China Ocean Industry has announced that the London Maritime Arbitrators Association (LMAA) has awarded in favour of Jiangzhou Union Shipbuilding’s customer in a shipbuilding contract dispute in relation to four vessels.
The shipyard suspended operations last year due to financial difficulties and went into arbitration with the owner as they couldn’t reach agreement over the termination of the contracts.
The owner is believed to be German owner Auerbach Schiffahrt, who ordered four multipurpose vessels at Jiangzhou Union in 2014.
LMAA has ruled China Ocean Industry to refund $112.11m including relevant interest to the owner and China Ocean Industry said it will settle the payment by financing from banks.
In the meantime, China Ocean Industry plans to sell the undelivered the vessels via auction, and its joint venture partner Yangzijiang Shipbuilding has shown interest of taking over the ships.
China Ocean Industry entered into a joint venture agreement with Yangzijiang last year, under which Yangzijiang will be responsible for managing Jiangzhou Union Shipbuilding and restoring normal production and operations at the yard.