Sainty Marine was hired in December 2013 by SE Shipping to build a multi-purpose 31,200 dwt vessel, which was to be bareboat chartered to Shungao Shipping, a wholly-owned subsidiary of Sainty Marine, for eight years.
After the deposit was paid, the company launched the construction of the ship, the shipbuilder said in a statement.
However, SE Shipping requested to cancel the order as the vessel delivery had been delayed. In addition, the company claims that Sainty Marine was not able to ensure a refund guarantee.
Sainty Marine said that the arbitration proceedings are likely to impact the company’s profit, but that it was still too early to estimate to what extent.
The shipyard has been hit with several cancellations over the recent period, including that from Thailand’s Precious Shipping which declined to take delivery of a 64,000 DWT bulker duo from the yard as it claimed that the bulkers did not meet the required standards.
This case is expected to go into arbitration as well.