Odfjell got $50 million from Sevmash

Odfjell received some USD 50.7 million from Sevmash on Tuesday, the company reports. The appeal from Sevmash in the long-running compensation dispute was rejected by the Supreme Court on Thursday last week.

Kalistratov leaves office
The board of directors of Sevmash on Monday this week decided to suspend the powers of General Director Nikolai Kalistratov after what the shipyard says was “his personal application.”

There are officially no direct links between Monday’s decision by the board of directors to replace Kalistratov and the ruling in the Supreme Court in Moscow in favor of the Norwegian shipping company Odfjell.

BarentsObserver reported already in April that Kalistratov was on his way to resign from the post as boss for the state owned Sevmash shipyard in Severodvinsk near Arkhangelsk.

Bad reputation for Sevmash
It is however no secret that the dispute between Sevmash and Odfjell had turned into a case creating a negative reputation of Sevmash regarding deals with foreign clients.

When Odfjell in 2004 signed the deal with Sevmash to build the chemical tankers, the order was the single largest ever placed in Russia by a Norwegian company.

Norwegians are pleased with result
- We are pleased that this case has now come to a satisfactory close, says Odfjell CSO Jan A. Hammer to the press on Tuesday.

The amount paid from the Severodvinsk based shipyard includes the award from the arbitration court in Stockholm, legal cost and accumulated interest.

In 2009 Odfjell accounted for the awarded amount with USD 43.3 million as income. The shipping company’s efforts to enforce the payment of the award have been ongoing since December 2009, and the first ruling in favour of Odfjell was in the Court of Arkhangelsk in December 2010.

Read also: Arkhangelsk court ruled in favour of Odfjell

Sevmash informs on Tuesday in a statement on their portal that the amount is transferred to Odfjell in line with the decision in the Arbitration Court of the Chamber of Commerce in Stockholm.

One-sixth of original claim
Sevmash says in their short statement that it is important to note that the original claim by Odfjell was USD 303.860.000.

Largest business order
Odfjell in 2008 decided to cancel the major contract with Sevmash following the latter’s reported inability to follow up contract terms. The contract from 2004 was of 12 chemical tankers, each of about 45,000 dwt. The construction of the chemical tankers was the single-largest Norwegian business-order ever placed in Russia.

The Norwegian shipping company claimed for damages and was awarded USD 43 million plus interest by the Stockholm Arbitration Tribunal in Sweden on December 30, 2009. The Russian shipyard failed to honour the international award, forcing Odfjell to seek enforcement within Russia. A ruling was made by the State Commercial Court in Arkhangelsk on 10 December 2010, in Odfjell’s favour. However, Sevmash appealed the decision and in March this year the Cassation Court in St. Petersburg turned down the appeal and ruled in favour of Odfjell. Sevmash again appealed the court order.

Case closed
On Thursday last week, Russia’s Supreme Court made a final review of the case and turned down the appeal from Sevmash as reported by BarentsObserver on Friday.