Yangzijiang Shipbuilding’s Units Ordered to Refund Customers $3.32 Million

Arbitration Award for Customers in Dispute with Yangzijiang Shipbuilding

Customers Awarded Refund of $3.32 Million in Deposits

A London-based arbitration tribunal has awarded customers who initiated arbitration proceedings against three units of Yangzijiang Shipbuilding a right to a refund of US$3.32 million in deposits. The award is in relation to two contracts with the shipbuilder’s units, with room for the tribunal to make further awards.

Details of the Dispute

The customers, who were not named, made claims relating to about US$832.2 million, comprising loss of bargain and loss of profits. However, these claims were not upheld by the tribunal. The dispute arose from the customers’ termination of contracts with Yangzijiang Shipbuilding’s three wholly owned subsidiaries in 2022, shortly after placing orders for 10 vessels worth US$900 million in late 2021.

Arbitration Proceedings

The arbitration proceedings, which were filed in 2022, relate to the 10 shipbuilding contracts. The tribunal issued 10 partial arbitration awards in relation to the 10 shipbuilding contracts. As the awards are partial, further claims can be made in future proceedings.

Company’s Response

Yangzijiang Shipbuilding said that the arbitration is not expected to have a material adverse effect on the group’s financial position for FY2025 ending December. The company is closely coordinating with its legal advisers on the remaining matters and potential response strategies. It will continue to monitor the developments of the arbitration and provide further updates where necessary.

Conclusion

The arbitration award is a significant development in the dispute between Yangzijiang Shipbuilding and its customers. The customers have been awarded a refund of US$3.32 million in deposits, while the company has been ordered to pay no damages for loss of profits or breach of contract. The dispute highlights the complexities of international shipping and the importance of careful contract negotiation and performance.

FAQs

Q: What was the nature of the dispute?
A: The dispute arose from the customers’ termination of contracts with Yangzijiang Shipbuilding’s three wholly owned subsidiaries in 2022, shortly after placing orders for 10 vessels worth US$900 million in late 2021.

Q: What were the claims made by the customers?
A: The customers made claims relating to about US$832.2 million, comprising loss of bargain and loss of profits.

Q: What was the outcome of the arbitration?
A: The arbitration tribunal awarded the customers a right to a refund of US$3.32 million in deposits, but did not uphold their claims for loss of profits or breach of contract.

Q: How will Yangzijiang Shipbuilding respond to the arbitration award?
A: The company is closely coordinating with its legal advisers on the remaining matters and potential response strategies. It will continue to monitor the developments of the arbitration and provide further updates where necessary.