[Alpha Biz= Kim Jisun] SEOUL, June 18 – Samsung Heavy Industries (SHI) has announced the termination of two shipbuilding supply contracts with Russia’s Zvezda Shipbuilding Complex and has filed a claim for damages following Zvezda’s unilateral cancellation of the agreements.
The contracts—signed in 2020 and 2021—covered the supply of ship blocks and equipment for ten icebreaking LNG carriers worth KRW 2.81 trillion and seven shuttle tankers worth KRW 2.05 trillion, totaling approximately KRW 4.85 trillion (USD 3.5 billion). While SHI did not disclose the exact amount of the damages being claimed, the company noted that it has retained USD 800 million in advance payments and notified Zvezda of its intent to seek compensation beyond that amount.
Zvezda had unilaterally notified SHI of contract termination in June 2023 and demanded the return of the advance payments. In response, SHI filed for arbitration with the Singapore International Arbitration Centre in July 2023, contesting the legality of Zvezda's action.
"With the prolonged Russia–Ukraine war, uncertainties surrounding project execution and business viability have significantly increased," SHI stated. "To protect our rights, we have decided to terminate the contracts and pursue damage claims."
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
