Gulf Navigation has suffered a new blow with the announcement that a second London-based arbitration had gone against it.
The arbitration centred on a dispute between the Dubai-based shipping company and a group of Chinese shipbuilders comprising Zhoushan Jinhaiwan Shipbuilding, Grand China Logistics Holding and HNA Group, over a 2011 contract between the parties for the building of two petroleum tankers.
The arbitrators found in the shipbuilders’ favour, and ruled that Gulf Navigation must pay the second part of the the building contract, together with interest.
"The company has the right to appeal, which the counsel of this company will study and advise," Gulf Navigation said in a statement posted this morning on the Dubai Financial Market.
London arbitration awards are typically overturned only when proof exists of fundamental procedural errors in the arbitration proceedings.
The company said that a provision will be taken on its balance sheet in the wake of the award, which will be reflected in its annual report for 2013, to be published shortly.
The news saw Gulf Navigation shares plummet by as much as 7 per cent in early trading.
The decision comes less than two months after a seperate London based arbitration panel found that Gulf Navigation was liable to pay US$10.2 million plus direct costs and calculated interest to Bermuda's Nordic American Tankers (NAT).
The panel found that Gulf Navigation was liable for repair costs for a vessel it was chartering from NAT between 2004-2010.
jeverington@thenational.ae
Follow us on Twitter @Ind_Insights
