KUALA LUMPUR (Jan 30): Sapura Energy Bhd has been served with a €50 million (RM256.16 million) arbitration claim from the developer of the Yunlin offshore wind farm project over alleged contract breaches.
In a bourse filing on Tuesday (Jan 30), the oil and gas engineering firm said it has, together with its wholly owned Sapura Offshore Sdn Bhd (SOSB), been served with a request for arbitration from Yunneng Wind Power Co Ltd, which has made a provisional claim of €50 million for the alleged contract breaches.
Yunneng, it said, also reserved its right to further specify and expand its claims, and to claim for any damages incurred.
SOSB was awarded the contract for the transportation and installation of turbine foundations at the Yunlin project back in March 2019 but pulled out in February 2022, following an alleged material breach of contract by Yunneng that was not disclosed.
When announcing the contract termination, SOSB claimed that the project was initially expected to be completed in September 2020, but was delayed to September 2023 following “unresolved technical and operational issues not attributable to Sapura Energy”.
In contrast, Yunneng, under its request for arbitration, claimed that SOSB did not comply with the agreed schedule under the contract and accused SOSB of being unable to deploy the relevant installation vessels required to conduct the installation of certain structures on time.
It is seeking €22.48 million against SOSB and Sapura Energy as “delayed liquidated damages” and €7.49 million as “further proven damages”.
Yunneng is also seeking an award declaring that SOSB and Sapura Energy are jointly and severally liable towards it for all “further proven delay damages” it allegedly suffered, or will suffer, in excess of €29.97 million for alleged wilful failure by SOSB to comply with the contract.
“[Yunneng] has estimated the provisional amount in dispute under the request to be €50 million,” Sapura Energy said.
Sapura Energy is required to respond to Yunneng’s request for arbitration by March 7 or request an extension of time.
“SOSB and Sapura Energy are currently seeking legal advice from their external counsels on the strength and merits of the claims set out in the request, as well as SOSB’s and Sapura Energy’s legal position in relation thereto,” the company said.
Shares in Sapura Energy ended unchanged at five sen on Tuesday, valuing the group at RM826.92 million.