Malaysia-headquartered Sapura Energy Berhad (SEB) and its wholly-owned subsidiary Sapura Offshore Sdn. Bhd. (SOSB) have been served with a EUR 50 million arbitration claim from Yunneng Wind Power, the developer of the Yunlin offshore wind farm in Taiwan, over alleged contract breaches.
The company added that Yunneng has reserved its right to further specify and expand its claims, including claiming for any incurred damages.
Sapura, through its subsidiary SOSB, was awarded a contract to transport and install monopiles at the Yunlin offshore wind farm in March 2019, but pulled out in February 2022, citing unresolved technical and operational issues.
Following the termination notice, SEB said it would pursue its claims via the dispute resolution process prescribed in the contract, namely arbitration under the German Institution of Arbitration in Bremen, Germany.
However, Yunneng Wind Power, under its arbitration request, claimed that SOSB did not comply with the agreed schedule under the contract on the alleged basis that SOSB was unable to deploy the relevant installation vessels required to conduct the installation of certain structures on time.
Yunneng is seeking EUR 22.48 million as “delayed liquidated damages” and EUR 7.49 million as “further proven damages” from SOSB and SEB.
In addition, the project’s developer is seeking an award declaring SOSB and SEB jointly and severally liable for all “further proven delay damages” it allegedly suffered or will suffer in excess of EUR 29.97 million for alleged wilful failure by SOSB to comply with the contract.
SEB said that the arbitration request aims to suspend the statute of limitations under German law.
SOSB and SEB are seeking legal advice from their external counsels on the strength and merits of the claims, with responses planned to be filed by 7 March.
Located in the Taiwan Strait some eight kilometres west of the coast of Yunlin County, the Yunlin wind farm will comprise 80 Siemens Gamesa 8 MW wind turbines .
Following Sapura leaving the project, the monopile installation work was picked up by the Abu Dhabi-based National Petroleum Construction Company (NPCC). Fred. Olsen Windcarrier (FOWIC), in cooperation with Shimizu, will be responsible for the transportation and installation of monopile foundations in 2024.
At the beginning of this year, Yunneng received the necessary approvals from Taiwanese authorities to enable the completion of its financial restructuring announced in August 2023.
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The Yunneng Wind Power consortium comprises Skyborn Renewables, TotalEnergies, EGCO Group, and a Sojitz Corp-led consortium which also includes Chugoku Electric Power, Chudenko Corporation, Shikoku Electric Power, and JXTG Nippon Oil & Energy Corporation.
Once completed, the offshore wind project will produce enough renewable energy to serve the electricity needs of more than 600,000 Taiwanese households.