Solitaire Arbitration: Appeal To The High Court In London

Singapore, Nov 26, 2004

SembCorp Industries (“SCI”) announces that the High Court of England has, on 25 November 2004, dismissed the appeal of Sembawang Corporation (“Sembawang”) in respect of the “Choice of Yard” ruling made by the Arbitration Tribunal in the “Solitaire” ship conversion dispute.

The Tribunal had ruled in May 2004 that the owner of “Solitaire”, Allseas, did not breach its contractual obligation to mitigate costs when it chose a Newcastle-upon-Tyne shipyard to complete the conversion work. Sembawang then appealed to the High Court against the standard of mitigation of costs applied by the Tribunal

In the light of the High Court’s decision to dismiss the appeal, the net exposure to Sembawang in the on-going arbitration is expected to increase.  Accordingly, the Board of Directors of SCI has decided to make an additional provision of S$200m. The final exposure to Sembawang will depend on the outcome of further hearings on other claims made by both parties in the arbitration, and the final quantum may differ from the current estimate.  SCI will continue to monitor the developments in this case and assess the adequacy of the provision amount, and make further announcements, as may be appropriate.

Media and Analyst contact:

Michelle Ng
Group Corporate Relations
SembCorp Industries
Tel: +65 6723 3153
Fax: +65 6822 3240

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