Sevmash refuses to pay Norwegian debts

14.04.2010 The Sevmash shipyard in Severodvinsk, northern Russia, refuses to pay Norwegian shipping company Odfjell the 45 million USD, which the latter was awarded in a court rule last year.

As BarentsObserver reported, the arbitration court in Stockholm last year found Sevmash guilty in having failed to meet contract conditions according to which the yard would deliver 12 chemical tankers to Odfjell.

The first ship in the series was to be delivered in October 2007. The vessels in order were IMO type II fully coated vessels of about 45 000 dwt., supposed to replace some of Odfjell's older single hull chemical carriers. Sevmash proved unable to deliver the vessels in line with contract conditions and Odfjell in early 2008 canceled the contract.

Odfjell originally demanded a compensation from Sevmash of more than USD 100 million and was "seriously disappointed" with the 45 million USD award.

Odfjell now has to formally seek enforcement of the award through the courts in Russia, a press release from the company reads. The timing of such process is difficult to assess and it will lead to a delay in receiving the full payment, including however interest of 8,5 percent p.a. as from 30 December 2009, the company informs.

The shipping company is seeking assistance from Norwegian authorities in the upcoming court processes in Russia.

The state-owned Sevmash yard is the biggest shipyard in Russia. It originally specialized in construction of submarines, but has over the last years expanded also into non-military construction.