After a decade-long arbitration marathon, China Shipbuilding Industry Corporation (hereinafter referred to as "China Shipbuilding") has recently achieved a pivotal victory.

On the evening of September 2, the company announced that a London ad hoc arbitration case involving its wholly-owned subsidiary, Shanghai Waigaoqiao Shipbuilding Co., Ltd. (hereinafter referred to as "Waigaoqiao Shipbuilding"), which had lasted for nearly ten years, has come to a close. The arbitral tribunal dismissed all claims made by the shipowner, and Waigaoqiao Shipbuilding is not only exempted from repaying the advance payment of USD 18.1 million and its accrued interest, but is also expected to increase its total profit for the fiscal year 2026 by approximately RMB 98.9 million as a result of this ruling.

The trigger for this case can be traced back to June 28, 2016. On that day, the shipowner, ESSM1 LTD of Singapore, issued a notice to Waigaoqiao Shipbuilding, unilaterally terminating the shipbuilding contract previously signed between the parties, citing that Vessel H1368 had failed to be completed within the contractual time frame.

Waigaoqiao Shipbuilding had initially secured an order in July 2013 from ESSM PTE. LTD of Singapore for the construction of one new self-elevating drilling platform. On September 5, 2014, following a tripartite amendment agreement, ESSM PTE. LTD, the original contracting party, transferred all rights and obligations under the contract to the shipowner, ESSM1 LTD. In June 2016, the shipowner issued a notice to Waigaoqiao Shipbuilding terminating the contract on the grounds that Vessel H1368 had not been completed as per the contract terms.

In 2017, the shipowner submitted arbitration claims to the tribunal, demanding that Waigaoqiao Shipbuilding refund the advance payments already made, amounting to USD 18.1 million, along with interest.

After years of legal back-and-forth, particularly following a hearing in London in early April 2019 on preliminary issues, Waigaoqiao Shipbuilding prevailed on those preliminary matters, which laid the foundation for the final award. According to the latest announcement on September 2, the arbitral tribunal ultimately dismissed all claims brought by the claimant shipowner and terminated the arbitration proceedings.