Samsung Heavy ordered to compensate $290 mn over defects in LNG carriers

Seoul: Samsung Heavy Industries, a South Korean shipbuilder, said on Monday it has been ordered by an arbitration centre in London to compensate $290 million to SK Shipping Co. over defects in two liquefied natural gas (LNG) carriers.

In a regulatory filing, Samsung Heavy said the London arbitration center found that the shipbuilder is responsible for failing to fix the defects in the LNG carriers, reports Yonhap news agency.

Due to the defects, an affiliate of SK Shipping was forced to suspend operations of the LNG carriers, according to the filing.

Shares of Samsung Heavy dived 6.28 per cent to 7,460 won at one point in Monday trading.

A core subsidiary of the Samsung Group, South Korea's largest conglomerate, Samsung Heavy’s main focus is on the engineering, procurement, construction, commissioning and the delivery of transportation ships for the commercial industry, topsides modules, drilling and floating production units for the oil and gas sector, gantry cranes for fabrication yards, digital instrumentation and control devices for ships, and other construction and engineering services.

The Geoje Shipyard in particular, SHI's largest shipyard in South Korea, boasts the highest dock turnover rate in the world.