Keppel has initiated arbitration proceedings against local shipbuilder Seatrium for an S$68.4 million (US$53.33 million) claim related to a corruption crackdown in Brazil, the companies said on Tuesday (Aug 26).
In 2022, Seatrium had made provisions worth S$82.4 million to pay Keppel against claims related to the crackdown, named Operation Car Wash.
Keppel on Tuesday said S$68.4 million was due from Seatrium upon the latter’s signing of its final agreement.
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.
Seatrium “is reviewing the claims and allegations set out in the notice of arbitration and will defend the arbitration claim vigorously”, it said in a notice on Tuesday.
It added that it had engaged and is in consultation with legal advisers.
The company also advised shareholders to exercise caution when dealing with shares or other securities of Seatrium and its subsidiaries. “Shareholders should consult their stockbrokers, bank managers, solicitors or other professional advisors if they have any doubt about the actions they should take,” it added.
Earlier this year, Seatrium had said it would pay 728.9 million Brazilian real (US$134.45 million) to the authorities in the South American country, as part of leniency agreements.
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.
