Prosafe to Appeal Westcon Rig Dispute Ruling

Bartolomej Tomic
Wednesday, May 12, 2021

Offshore accommodation provider Prosafe has decided to appeal an April 15 ruling by a court in Norway, ordering it to pay 465 million Norwegian crowns to shipyard Westcon for conversion work on one of its floatels, overturning a 2018 ruling in favor of Prosafe.

Stavanger District Court had in March 2018 issued its judgment in favor of Prosafe in respect of the dispute between Westcon and Prosafe relating to the conversion of the Safe Scandinavia offshore accommodation rig into a tender support vessel, ordering Westcon to pay Prosafe NOK 344 million plus interest and NOK 10.6 million in legal costs. 

Westcon filed an appeal, and the Gulating Court of Appeal in April decided that Prosafe should pay to Westcon NOK 302,510,457 plus interest and legal costs, in total about NOK 465 million (around $55 million at the time of the ruling), with the court decision implying the full payment to Westcon of the amount claimed.

Prosafe at the time said that the judgment was extremely disappointing and surprising, with CEO Jesper K. Andresen saying it was "difficult to understand how two courts can reach such complete opposite results.”

The company at the time also said that a judgment from a Court of Appeal is usually final, "as the possibilities of further appeal are very limited," however adding that it hadn't yet had the time to study the judgment in detail.

In a statement on Wednesday, May 12, Prosafe said it would appeal the ruling.

"Prosafe has decided to address the shortcomings of the judgment by the Gulating Court of Appeal through an appeal to the Supreme Court," Prosafe said Wednesday.

According to information on Prosafe's website, the conflict arose from "a substantial cost overrun of Westcon's price estimate for the conversion of the Safe Scandinavia to a tender support vessel," for which Westcon sought an additional compensation of around NOK 306 million plus interest, while Prosafe denied Westcon's assertion and demanded a substantial repayment.

The conversion was supposed to cost around NOK 1 billion but ended up costing around NOK 2.4 billion, according to a document on Prosafe's website.

The Safe Scandinavia is an anchor-moored semi-submersible tender support and accommodation vessel with beds for 309 persons (NCS: 159) capable of operating worldwide in extreme environments. The upgraded Tender Support Vessel (TSV) capabilities also offer well abandonment, general hook down, and cleaning services to support platform decommissioning.

The vessel, built in 1984 and converted to TSV in 2016, last worked with Aker BP at the Ula Platform on the NCS, completing an accommodation support vessel contract in May 2019. Data on Prosafe's website suggest that the Safe Caledonia has been idle ever since.

Categories: Activity Energy Rigs Industry News Europe Regulations

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