Friday, 10 December 2010, the state commercial court in Arkhangelsk decided in favour of Odfjell and approved our application concerning the recognition and enforcement of the arbitral award filed against Sevmash shipyard. We have so far only received the decision. Further details with full reasoning is expected within a few days. The decision is a huge step forward for Odfjell in terms of beeing able to collect the outstanding as awarded by the Arbitration Tribunal in Sweden. The yard has a 30 day appeal right.
In 2004 Odfjell placed an order at Sevmash, a large shipyard near Arkhangelsk, for up to 12 chemical tankers, each of about 45,000 tons capacity. The newbuilding contracts included an arbitration clause under Swedish law. Excessive and continuing delays of construction forced Odfjell in 2008 to cancel these contracts.
Odfjell claimed damages from Sevmash, and the Swedish arbitration tribunal unanimously, on 30 December 2009, awarded Odfjell damages of USD 43 million plus reimbursement of legal costs plus 8.5% p.a. interest for any delay in settling the award.
Sevmash has refused to pay Odfjell the awarded amount.
Today the outstanding amount is around USD 47 million, all included.