Samsung Heavy Battles Legal Storm Over $3.54 Billion Russian Icebreaker Deal
Samsung Heavy Industries faces legal battles after Russia's Zvezda cancels orders for icebreaker ships worth $3.54 billion, citing 'illegal termination.' The South Korean company seeks arbitration in Singapore and plans to claim damages due to escalating uncertainties amid the Russia-Ukraine war.
In a significant development, South Korean shipbuilder Samsung Heavy Industries has announced the cancellation of two major orders from Russia's Zvezda, valued at $4.85 trillion won ($3.54 billion). These orders, critical for the production of icebreaker ships, were terminated by Zvezda, which Samsung claims was illegal.
The South Korean firm revealed through regulatory filings that Zvezda unilaterally informed them of this contract termination in June 2024, demanding the return of advance payments. In response, Samsung Heavy Industries has appealed to the Singapore arbitration court, seeking a declaration of the termination's illegality and is continuing negotiations with Zvezda.
The prolonged Russia-Ukraine conflict has only exacerbated uncertainties concerning contract execution, prompting Samsung Heavy to terminate the agreement and pursue damages to safeguard its interests. Originally, the orders involved supplying components for 10 icebreaker LNG carriers and 7 icebreaker shuttle tankers, secured in 2020 and 2021.
(With inputs from agencies.)
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