Australian livestock carrier operator said it has successfully resolved its arbitration proceedings in London against the Croatian Bank for Reconstruction and Development (HBOR) and is entitled to receive payments plus interest amounting to around $12m within 14 days.
HBOR issued Wellard’s Singapore-based subsidiary, Wellard Ships, refund guarantees supporting Wellard’s terminated 2015 contract with the Croatian Uljanik shipyard (Uljanik) for the building of the livestock vessel to have been known as the Ocean Kelpie.
Following the termination of a shipbuilding contract in 2018, Wellard had taken successful arbitral proceedings against Uljanik in 2019, however, the shipyard had been placed into interim receivership, which eventually led to full insolvency, preventing the reimbursement from being paid to Wellard.
Arbitral proceedings were subsequently commenced against HBOR after it disputed payment under the refund guarantees which secure the advance payments made by Wellard to Uljanik. The refund guarantees were for upfront payments of $8m and €1.6m ($1.8m), plus interest accruing until a full refund was made. Wellard said it would declare the precise amount received in its statutory financial reports.
Wellard’s executive chairman, John Klepec, commented: “Wellard is pleased to have been able to recover these monies after two long and complex arbitrations conducted over several years. This is a fair and appropriate outcome in the circumstances, demonstrating the importance of effective risk mitigation that refund guarantees provide in the shipbuilding industry.”