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| LS Cable & System's workers check undersea cables on a vessel at a port near its business site in Donghae, Gangwon Province, March 28. Newsis |
By Kim Jae-heun
LS Cable & System (LS C&S) has won a lawsuit against Dutch construction company Boskalis over its unilateral cancellation of a contract and will receive 11.7 billion won ($8.77 million) in compensation, the company said Friday.
According to LS Holdings' report filed to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System, the Singapore International Arbitration Centre (SIAC) recognized Boskalis' wrongful contract termination and its impact on delaying LS C&S' project to supply submarine power cables to SP PowerAssets in Singapore. The payment is the sum of the net amount of LS C&S' additional construction fee, compensation and legal and arbitration costs.
The SIAC has dismissed all the pending cost claims and contract amount changes requested by Boskalis and only recognized the construction progress payment claim.
Earlier in 2020, LS C&S won a bid to supply undersea power cables to SP PowerAssets and signed a contract with Boskalis, which owns a cable lay barge, to conduct the cable installing construction.
The project was an opportunity for LS C&S to gain a solid edge over Chinese firms in the low-voltage cable market with its contract to supply 400 kilometers of high- and low-voltage cables to Singapore.
However, right after signing the contract with LS C&S, Boskalis terminated the agreement unilaterally. The local cable maker immediately applied to the SIAC for arbitration, but Boskalis rejected it.
Instead, the Dutch firm applied its arbitration proposal to the SIAC arguing that LS C&S should compensate for damages. In September 2020, Boskalis requested compensation of 37.24 million euros, which exchanged to 52.3 billion won at the time.
The two companies have since been engaged in a legal fight for more than two years.
