Seatrium Limited, a shipbuilder based in Singapore, has settled a complex dispute with an affiliate of Danish shipping company Maersk regarding a nearly finished wind turbine installation vessel. This agreement, announced on Monday, ends two arbitration processes that could have lasted for years.
As part of the settlement, Seatrium Energy (International) Pte Ltd will deliver the vessel to Maersk's affiliate, Phoenix II A/S, by February 28, 2026. Maersk will pay the remaining contract balance of $360 million, which may be adjusted. This development is a significant shift from October when Maersk terminated the contract, leading to separate arbitration proceedings from both parties.
The settlement includes a unique financing plan where Maersk will pay $250 million of the contract price through an interest-bearing loan from Seatrium's wholly-owned subsidiary, Seatrium (SG) Pte. Ltd. This loan will be paid back over a period of up to 10 years using cash generated from the vessel's operations. Seatrium will hold a mortgage on the vessel and have priority rights over the vessel and the buyer's bank accounts as security.
Seatrium stated, "After considering all possible options with the end customer, the Company believes this arrangement is the best way forward for the Group and its shareholders, taking into account financial impacts, recoverability, and the risks of prolonged and expensive legal battles."
Both companies have decided to drop all legal actions, and the contract is now in full effect. This situation is not expected to significantly affect Seatrium's net tangible assets or earnings per share for the current financial year ending December 31, 2025.
The dispute began when Maersk sent a termination notice on October 9, citing breaches of contract. Seatrium contested this termination three days later, claiming Maersk was the one at fault. Consequently, Seatrium filed its notice of arbitration on November 28, seeking a ruling that Maersk wrongfully terminated the contract and demanding that the buyer fulfill its obligations.
The vessel, which is about 99.8% complete, was originally contracted in March 2022 to be used at the Empire Wind 1 offshore wind farm project in U.S. waters. This project has encountered regulatory issues, including a temporary construction halt ordered by the Bureau of Ocean Energy Management in April 2025, which was later lifted.
The contract had unusual payment terms for Seatrium, requiring 80% of the contract price to be paid upon delivery instead of through gradual milestone payments. Seatrium described it as "the only remaining contract in the Group's order book that is not structured with progressive milestone payments," referring to it as a "legacy contract" from before the merger that created Seatrium.
Seatrium is confident in completing the project, stating that the company "is focused on and confident of completing the project under the Contract and delivering the Vessel according to the Contract." They also promised further updates as new developments arise.