London arbitration - shipbuilding dispute


  • Date: 01/01/2015

An owner Member ordered a series of  ten ships from a Chinese shipyard in 2007. As building of the ships progressed, several issues arose with the quality of construction. A number of disputes arose, most of which were settled with some contracts being cancelled and others amended with delayed delivery dates. Construction for one of the hulls continued but that ship suffered a main engine breakdown during its pre-delivery sea trials. Disputes arose and the Member was eventually successful in recovering the repayment of $19.6m pre-instalments following a two part arbitration hearing.

Russian statutory bans on the import of foodstuff from the US in December, 2009 provoked a claim for damages for wrongful termination of a charter by the Association’s owner Member against its charterer. The case proceeded to a hearing at which the London arbitration tribunal awarded the Member its claim in full. The Member was awarded damages in excess of $850,000, based on the freight that would have been earned had a full cargo been loaded.