Seatrium, Aibel initiate arbitration proceedings after DolWin 5 dispute

In a statement, Seatrium said its wholly owned subsidiary, Seatrium New Energy Ltd (SNE) has filed arbitration proceedings against Aibel, its partner in respect of the design, engineering, procurement, construction, installation and commissioning of the 900-MW offshore converter platform.

SNE and Aibel entered into a consortium agreement in May 2019 in respect of the project, for which the end-customer is TenneT. The converter platform is based on Aibel’s design intended for the DolWin cluster in the German sector of the North Sea. The platform is currently in the North Sea, and notwithstanding the commencement of proceedings, the parties are continuing to work on the project with delivery targeted in 2026.

Seatrium said that, following discussions between the parties, the companies agreed to file their respective requests for arbitration to the Arbitration Institute of the Stockholm Chamber of Commerce pursuant to the consortium agreement. The requests for arbitration arise out of differences between the parties under the consortium agreement, and the mutual desire for those differences to be amicably resolved by an independent tribunal.

To execute the project, the consortium agreement allocated the scope of work as either direct scope to be discharged by the respective parties solely or as joint scope to be discharged by both parties jointly. 

Seatrium said that, despite Aibel’s failure to achieve a timely design freeze with multiple changes to its design, SNE fulfilled its direct scope in Singapore and the offshore converter platform sailed away from SNE’s yard in Singapore in October 2022, to Aibel’s facility for the Haugesund Phase of works.

The parties also mutually agreed that Aibel would be responsible, after sail away, for work within Seatrium’s direct scope that were not completed due to Aibel’s late design freeze. 

The parties are asserting claims against each other under the agreement for breaches relating to direct scopes of work and in respect of disagreements relating to the allocation of responsibilities of the parties. They are also disputing the distribution of revenue and costs incurred relating to the joint scope of the project.

In respect of direct scopes of work, SNE and Aibel have made demands against each other for sums in the region of €180M (US$211M) and €113M, respectively. Based on preliminary advice received by SNE, claims under the agreement in respect of direct scopes of work, to the extent valid, are to be satisfied from designated reserved consortium funds limited to approximately €5M and should not give rise to further financial exposure beyond that for respective parties.

Seatrium said Aibel’s position is that certain matters fall within the joint scope of the parties. Aibel has claimed approximately €17M as amounts to be contributed by SNE in respect of such matters. SNE is contesting the validity of these claims and in turn is seeking declarations to clarify the parties’ obligations and liabilities under the agreement.

Seatrium said SNE will “prosecute and protect its position and, where appropriate, will vigorously defend Aibel’s claims.” It said that as the arbitration proceedings are at a preliminary stage, the company is unable to definitively ascertain the financial impact, if any, arising from the proceedings.