KUALA LUMPUR: Sapura Energy Bhd's share price fell 10 per cent after it announced that it received a €50 million (RM256.16 million) arbitration claim from the developer of the Yunlin offshore wind farm project, alleging contract breaches.
It was trading at 4.5 sen, down half a sen, with 80.4 million shares changing hands.
It was the second most actively traded counter on the bourse.
In a filing to Bursa Malaysia Securities Bhd yesterday, the oil and gas company said both itself and its subsidiary Sapura Offshore Sdn Bhd (SOSB) were served with a request for arbitration from Yunneng Wind Power Co Ltd, for a provisional claim of €50 million for the alleged contract breaches.
It added that Yunneng has reserved its right to further specify and expand its claims, including claiming for any incurred damages.
Meanwhile, Yunneng, through its arbitration request, alleged that SOSB failed to adhere to the agreed schedule in the contract and accused SOSB of being unable to deploy the necessary installation vessels promptly for certain structure installations.
It is seeking €22.48 million as "delayed liquidated damages" and €7.49 million as "further proven damages" from SOSB and Sapura Energy.
Additionally, Yunneng seeks an award declaring SOSB and Sapura Energy jointly and severally liable for "further proven delay damages" exceeding €29.97 million, attributing them to SOSB's purported willful failure to comply with the contract.
Sapura Energy stated that Yunneng estimated the provisional dispute amount at €50 million.
Sapura Energy must respond to Yunneng's arbitration request by March 7 or seek an extension.
The company is presently seeking legal counsel from external advisors regarding the claims' strengths and merits, as well as SOSB's and Sapura Energy's legal stance concerning them
In March 2019, SOSB secured the contract to transport and install turbine foundations at the Yunlin project but withdrew its involvement in February 2022, citing an undisclosed material breach of contract by Yunneng.
SOSB mentioned that the project's completion, originally planned for September 2020, was pushed back to September 2023 due to unresolved technical and operational issues not linked to Sapura Energy.