Australia's INPEX Files Arbitration Request with ICC Regarding Floating Facility Built by Daewoo Shipbuilding & Marine Engineering

Daewoo Shipbuilding & Marine Engineering Seoul Office. Photo by Moon Honam munonam@

[Asia Economy Reporter Jeong Dong-hoon] Australian company Inpex has claimed that the process of the floating production storage and offloading (FPSO) facility constructed by Daewoo Shipbuilding & Marine Engineering (DSME) was delayed, and has filed for arbitration for damages with the International Chamber of Commerce (ICC).

According to the industry on the 6th, DSME announced this through a public disclosure the day before.

Inpex alleges that the production preparation of the FPSO installed offshore Australia by DSME in 2017 was delayed and that the facility has defects. The claimed amount is 970 million USD (approximately 1.2 trillion KRW). In response, DSME stated that most of Inpex’s claims are unfounded and that the amount is excessively exaggerated, and that it will actively respond to the arbitration process.

According to DSME, the facility departed from Okpo Shipyard and completed preparations for production within the contractually required completion date, and Inpex also approved changes and additional costs that occurred during contract execution. They explained that there was already an agreement between both parties regarding the changes that occurred during contract execution.

The FPSO contracted between DSME and Inpex was contracted in March 2012, underwent five years of construction, and departed from Okpo Shipyard in July 2017.

In June 2019, it completed preparations for production locally in Australia and was delivered to Inpex. It is currently stably producing and exporting liquefied natural gas (LNG) and liquefied petroleum gas (LPG), among others.

DSME stated, "We plan to actively respond to the arbitration process to minimize the financial impact on the company and to recover the remaining contract payments."