[Alpha Biz=(Chicago) Reporter Kim Jisun] Samsung Heavy Industries announced on the 18th the outcome of its arbitration court's ruling on damages caused by defects in the cargo windows of two liquefied natural gas (LNG) carriers it built.

The London Arbitration Tribunal decided to pay $290 million on the 15th (local time), judging that the defects in the cargo windows of two LNG carriers delivered to SK Shipping's Special Purpose Act (SPC), SHIKC1 and SHIKC2, were not fully repaired within a reasonable period.

The arbitration court judged that Samsung Heavy Industries is not responsible for compensation for SK Shipping's losses caused by LNG carriers' failure to operate normally due to defects such as cold spots. However, it was partially admitted to the shipper's claim that the value of the ship decreased because the repair was not fully carried out even after the expiration of the reasonable repair period.

Earlier, Samsung Heavy Industries signed a contract to build two LNG carriers with the Korean cargo KC-1 in January 2015 and delivered them in February and March 2018, respectively.

However, the shipper stopped the operation and left it for repair, saying there was a problem with the cargo window. It also sought damages with the Arbitration Tribunal against Samsung Heavy Industries, claiming that the delayed repair of the cargo window of the ship caused damages such as a drop in the value of the ship and the loss of the ugly port.

Samsung Heavy Industries stressed that defects related to the LNG cargo window were the responsibility of the Korea Gas Corporation, which developed the KC-1, and said it would file a lawsuit against the agency for compensation.

"We will recover the compensation through a lawsuit against Korea Gas Corp. seeking compensation," a Samsung Heavy Industries official said. "We will continue consultations to end multilateral disputes such as SK Shipping and Korea Gas Corporation."

 

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