Harland & Wolff wins €33m claim on US order

The troubled Belfast shipyard, Harland & Wolff, has won an arbitration claim for more than £20 million sterling (€33 million…

The troubled Belfast shipyard, Harland & Wolff, has won an arbitration claim for more than £20 million sterling (€33 million) against one of its former customers, the Texan oil giant, Global Marine.

However, the US group plans to protest against the decision by the Court of Appeal in London and will formally apply for leave to appeal to the House of Lords within the next three weeks.

The East Belfast shipyard and Global Marine have been locked in a dispute for the last 18 months over payments, contracts and delivery times for two drill ships which were completed for the US group last year.

During construction of the drill ships, Harland & Wolff said Global Marine asked for major changes to be made to the job specification which it said would push up the costs of the original contract worth about £200 million sterling.

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The shipyard claimed Global Marine was responsible for potential increases in the contract and any slippage in delivery times. Harland & Wolff subsequently demanded that a final payment of £21 million should be paid on the contract and had declined to release the drill ship until payment was received.

The drill ship was released to Global Marine but the US group said it was not finished to its satisfaction and refused to pay the £21 million demanded by Harland & Wolff.

The dispute over the extra payment went to arbitration for the first time last year and Global Marine was ordered to pay the shipyard the additional costs.

However, a High Court appeal against this decision found in the US group's favour and Harland & Wolff embarked on yet another legal challenge to recover its initial claim of £21 million against Global Marine.

Yesterday, three judges at the Court of Appeal in London found in the East Belfast shipyard's favour and ordered the outstanding delivery instalment to be paid by Global Marine.

The US group has said it is "disappointed" with the ruling and that its position on the issue had not changed.

Mr Brynjulv Mugass, chief executive of Harland & Wolff, said it expected Global Marine to honour its responsibilities.

Francess McDonnell

Francess McDonnell

Francess McDonnell is a contributor to The Irish Times specialising in business