One of Sealink's offshore support vessels in action.
KUALA LUMPUR: Sealink International Bhd
has settled a four-year dispute with Boustead Heavy Industries Corp Bhd’s unit Boustead Penang Shipyard Sdn Bhd (BPS) over a shipbuilding contract and is accepting a payment of US$1.5mil (RM6.32mil).
The offshore marine support vessel owner and operator told Bursa Malaysia that BPS proposed and Sealink had accepted the settlement sum as full and final settlement of all claims and counterclaims arising out of the shipbuilding contract dated April 3, 2008, between BPS and its unit Sealink Sdn Bhd.
Sealink began arbitration proceedings against BPS in December 2012 over the contract that was signed prior to Sealink’s July 29, 2008 listing on Bursa Malaysia.
Under the US$32.9mil contract, BPS was to build for Sealink two 7,000 dwt oil or chemical carriers.
Sealink later claimed against BPS the sum of US$4.935mil (RM20.8mil) which was to be refunded and/or paid to it under the contract and/or for interest payable by BPS to it and/or for losses and/or expenses incurred by Sealink pursuant to breaches of the contract.
It inked a settlement agreement with BPS on Wednesday. Each party is to bear its own legal costs in relation to the claims and counterclaims, including but not limited to the costs incurred in the arbitration under the Kuala Lumpur Regional Centre.
The US$1.5mil payment (free of all bank and/or remittance charges) will be made within 14 days from the execution of the agreement.
Sealink said the settlement would be positive for the company as it would receive and recognise a gain of US$1.5mil. “The disputed amounts involved with BPS had previously been written off in the books of the company,” it added.
The company, which incurred after-tax losses of RM15.08mil for the first-half year ended June 30, 2016, said the receipt of the settlement sum would also improve the cash flow position of Sealink Sdn Bhd.
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