Back in November 2020, Zvezda awarded a contract to Samsung Heavy worth about 2.8 trillion won ($2.04 billion) for the supply of blocks and equipment for 10 ice-class Arc7 carriers intended to serve the Novatek-operated Arctic LNG 2 project, which is currently under sanctions by the US and the EU.
In October 2021, the duo signed another contract for the supply of blocks and equipment for seven icebreaking Arctic shuttle tankers worth about 2.04 trillion won ($1.48 billion).
In June 2024, Samsung Heavy announced that it would sue the Russian shipbuilder Zvezda after the latter decided to terminate contracts for these 17 vessels.
According to Samsung Heavy, Zvezda unilaterally claimed contract default during negotiations and demanded a termination notice and repayment of the advance payment of about $800 million plus delayed interest.
Samsung Heavy filed for arbitration with the Singapore arbitration court in July 2024 to confirm the “illegality of Zvezda’s contract termination.”
The shipbuilder said in two separate stock exchange announcements on Wednesday that it had notified Zvezda of its decision to terminate these contracts due to “illegal termination by the shipowner.”
The shipbuilder stated that it will retain the advance payment of $800 million, comprising $600 million for the LNG carriers and $200 million for the shuttle tankers.
In addition, Samsung Heavy demands compensation for losses exceeding this amount.
“We intend to vigorously pursue compensation for our direct and indirect damages in the ongoing Singapore international arbitration proceedings,” the shipbuilder said.
