250 views
Stock photo. Credits to Unsplash.

Keppel O&M challenges government decision on customer claims on rig contract

The company has already filed an injunction to prohibit payment on a standby letter of credit.

A subsidiary of Keppel Offshore and Marine is challenging a decision by a government authority that the contractual formulas on a rig contract dispute were invalid.

Keppel O&M is referring to an announcement it made on 7 February 2019 on clarifications relating to customer potential claims arising from disputes over the validity of certain foreign exchange fluctuations and cost escalation contractual formulas in a rig contract entered into by an entity which is 75% owned by Keppel O&M.

The Keppel owned-entity had provided a US$126.6m standby letter of credit in favour of the customer for purposes of repayment of amounts received by the entity. The sum was then calculated based on the contractual formula.

Keppel said that on 12 September 2022, following a decision by the relevant government authority that the contractual formulas were invalid, the customer sought to call on the standby letter of credit. 

ALSO READ: FCT to acquire 10% additional stake at Waterway Point for $73.6m

“The company considers that the decision is still subject to possible modification and is not final, and the call was premature. The KOM entity has since applied for an injunction from the Singapore Court on 12 September 2022 to prohibit payment on the standby letter of credit. The KOM entity has also filed legal proceedings in the local court to challenge the decision of the relevant authority,” Keppel said.

Keppel said that it has previously made a provision in its accounts for the full amount payable under the standby letter of credit, and considers that no further provision is required. 

“Accordingly, the Company does not consider there to be any material impact on its overall financial performance. The Company will provide further updates as and when there are any material developments in relation to these legal proceedings,” Keppel added.
 

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

Singapore’s new law weaves safety net for gig workers
Gig workers will be enabled to secure their retirement, benefit from improved workplace safety, and gain greater visibility within the industry.
Here’s how Gen Z consumer preference reshapes APAC’s marketing landscape
Gen Z consumers are observed to purchase based on pleasure and purpose, whilst being conscious of cost and convenience.

Event News

Event News

SBR National Business Awards 2024 Winner: Wiseasy Technology Pte Ltd Cards & Payments
Lay Cheng Tan, Co-Founder & Chief Investment Officer, and Mayank Raheja, Managing Director (EMEA & SA) of Wiseasy Technology Pte Ltd, provided insights into preventing fraud and inefficiency with the WiseQ QR Payment Solution.
Cards & Payments SBR National Business Awards 2024 Winner: Wiseasy Technology Pte Ltd
Lay Cheng Tan, Co-Founder & Chief Investment Officer, and Mayank Raheja, Managing Director (EMEA & SA) of Wiseasy Technology Pte Ltd, provided insights into preventing fraud and inefficiency with the WiseQ QR Payment Solution.