Singapore's Keppel has initiated arbitration proceedings against local shipbuilder Seatrium for a S$68.4 million ($53.33 million) claim related to a corruption crackdown in Brazil, the companies said on Tuesday.
In 2023, Seatrium had made provisions worth S$82.4 million to pay Keppel against claims related to the crackdown, named Operation Car Wash.
Seatrium noted the obligation to pay Keppel expired in February of this year and there were no binding and legally enforceable agreements signed with the Brazilian authorities before that.
Earlier this year, Seatrium had said it will pay 728.9 million Brazilian real ($134.45 million) to the authorities in the South American country, as part of leniency agreements.
Keppel on Tuesday said S$68.4 million was due from Seatrium upon the latter's signing of its final agreement.
Seatrium said it is reviewing the claims and allegations made in the arbitration proceeding and will defend the claim vigorously.
Keppel's offshore and marine segment merged with Sembcorp Marine in 2023 to create Seatrium. Authorities in Brazil had searched Sembcorp's shipyard as part of a graft investigation.
The investigations were part of Brazil's Operation Car Wash, launched to crack down on corruption. The operation began in 2014, to expose sprawling corruption schemes across the region and send dozens of Latin American political and business leaders to jail, including several former presidents.
(Reuters)