Norwegian shipping company Odfjell broke the contract with Sevmash
05.03.2008 11:44

The reasons are, among others, the increase in the price of the project and also serious delays of the works. The 0.5$ billion contract on the construction of up to 12 vessels 45000 t displacement each was signed in 2004. Later the value of the contract grew up to 544 million dollars. According to the representatives of Odfjell Sevmash has already delayed the terms of the delivery of the ships almost by half a year.

It was supposed that Odfjell will receive the first vessels in 2007. It was the largest order the Norwegian company made in Russia. According to the public statements of the director of Odfjell Terier Storeng now Russian shipyard promises the delivery in 2009. "We constantly kept in touch with the company and were well informed on the situation, however, after the last meeting our patience finished". Norwegians have already got support from the international banks which guaranteed compensation of the already paid sums under the contract. Odfjell itself intends to demand complete reimbursement from Sevmash. Norwegians hope they will not need court trial to get the money back. "Our company worked with many shipyards - Polish, Japanese, Korean, but we for the first time we came across with such a manner to do business as with Sevmash".

Sevmash itself in every possible way denies the claims of Odfjell about allegedly deliberate violation of the delivery terms. However, the company announced it lacks the necessary means for completing the construction of the vessels, but points out that it is due to the «imposed by the customer conditions of fixing the prices on the level of 2004 for all period of the construction". Sevmash officially informed that it will continue the construction of the tanker in order to sell them later. On his side Sevmash does not exclude court trials. Experts believe that the situation will extremely negatively affect the image of Sevmash in the world market. Director of the legal company «Veles Leks» Evgenie Drozdov noticed that if Norwegians prove in court that Sevmash broke the delivery terms it can seriously shake the reputation of all Russian shipbuilding. The lawyer of the lawyers' bureau «Egorov, Puginsky, Afanasyev and partners» Sergey Korolev added that both according to foreign and Russian legislation Norwegians can demand full compensation of their already spent mean. Investment company Finam evaluated the financial claims at about $100 million.

News source: ShipbuildingRu
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