Bangkok based shipowner and operator Precious Shipping won the case in the High Court against Chinese shipyard. United Kingdom Commercial Court dismissed an attempt by Jiangsu Guoxin Shipyard to reverse arbitration awards made in 2018 for canceled bulk carrier contracts.
In 2013, Thailand Stock Exchange-listed Precious Shipping ordered ultramax bulk carriers at Chiese shipyard through the amended Shipbuilders Association of Japan (SAJ) form. After the delivery of new-building bulk carriers, Precious Shipping rejected ships due to faulty design and built. Chinese shipyard claimed that bulk carriers were repaired before delivering to the shipowner. After the Chinese shipyard missed the contractual delivery date, Precious Shipping annulled the contracts.
United Kingdom Commercial Court acknowledged that the prevention principle did not apply to an amended Shipbuilders Association of Japan (SAJ) Form shipbuilding contract. Therefore, the Chinese shipyard obliged to give notice or communicate with Precious Shipping if the Chinese shipyard required to postpone ship delivery dates. However, in an unprecedented move for a first instance court, the judge permitted for Chinese shipyard to take the case to the Court of Appeal.
Shipbuilders Association of Japan (SAJ) Form explicitly states that notification and communication are essential to postponing delivery and cancellation dates. Court of Appeal asserted that conventional notice is required when a shipyard attempts to postpone a newbuilding’s delivery date. Court of Appeal dismissed the case.
Bangkok-based shipowner and operator Precious Shipping lost $32 million arbitration battle and has to pay award to Chinese shipyard over claims that a series of dry bulk carriers did not meet fuel-saving specifications. Chinese shipyard Taizhou Sanfu Ship Engineering won the arbitration battle and London-based arbitrators ruled that Precious Shipping could not withhold payments because the fuel consumption of super-eco dry bulk carriers was higher than specified in the contracts. Precious Shipping CEO Khalid Hashim explained that consumption was as per specification during the shop test but sea trials showed that fuel consumption was between 11% and 17% above what was warranted in the contract. Precious Shipping accepts the arbitration ruling and won’t be appealing.
Precious Shipping’s 2008 built handysize dry bulk carrier 30K DWT M/V Mallika Naree run aground in Elizabeth River Norfolk, Virginia in the USA and no pollution has been reported. American tugs refloated M/V Mallika Naree and steamed to a nearby anchorage. M/V Mallika Naree was carrying cement and steel from France to Virginia.
Thailand based shipowner and operator Precious Shipping posted a $19 million loss in 2016 after losing money on 13 dry bulk carrier sales. Thailand based shipowner and operator Precious Shipping now operating 32 dry bulk carriers and 2 new building orders in China.
Precious Shipping cancelled 3 ultramax newbuildings in Chinese Shipyard called Taizhou Sanfu Ship Engineering. Previously, Precious Shipping ordered to Taizhou Sanfu Ship Engineering 10 dry bulk carriers which costing $27.5m each. Precious Shipping was dissatisfied with the performance of the 63K DWT ultramax bulk carriers which did not deliver the promised fuel savings. Chinese shipyard will give a $2m discount on delivered ultramax bulk carriers and cancelled 3 ultramax newbuilding orders. Precious Shipping asking $4m per dry bulk carrier in damages for breach of contract which is arbitrated in London.