Songa Dismisses DSME Claim

By Aiswarya Lakshmi November 17, 2015

Norway's Songa Offshore SE referred Tuesday to its announcement July 15 regarding the receipt of notices of arbitration from South Korea's Daewoo Shipbuilding & Marine Engineering (DSME) in respect of the construction contracts for the Cat D rigs.

On November 16, 2015, Songa Offshore received claim submissions from DSME related to Songa Equinox, the first Cat D rig, in which DSME asserts a claim of USD 179 million, along with a request for repayment of liquidated damages in a total amount of USD 22 million.

The claim that is asserted relates to alleged cost overruns and additional work in relation to Songa Equinox rig due to what DSME alleges were inherent errors and omissions in the design documents (as often referred to as the FEED package).

Songa Offshore has performed an initial review of the claim and does not consider that there is any substance to the claims asserted by DSME.

The Company is confident of its position, since it is of the view that DSME is responsible for the delays and any attempt to recover cost overruns is of no merit due to the "turn-key" nature of the construction contract.

Songa Offshore has obtained legal opinions from highly reputable law firms in the UK and Norway and from a Queen's Counsel all of which confirm the Company's position.