Sembcorp Marine has updated that its contractual dispute over the construction of a high-specification jack-up rig with Marco Polo Marine remains unresolved and arbitration proceedings will commence.

Sembmarine’s subsidiary PPL Shipyard has on 7 April served a notice of arbitration to start arbitration proceedings against Marco Polo Drilling, subsidiary of Marco Polo Marine.

Sembmarine added that its shipyard has also separately received a notice of arbitration from Marco Polo Drilling and Marco Polo Marine purporting to commence arbitration proceedings against PPL Shipyard.

In December 2015, PPL Shipyard served a termination notice to abort a contract after Marco Polo Drilling “failed to pay the second disbursement of 10% of the contract price ($21.43m) by 30 November 2015”, Sembmarine stated.

The dispute arose when Marco Polo Marine unilaterally terminated the rig order in November 2015, citing faults over the rigbuilder job such as cracks found on three legs.