Malaysian oil and gas services provider Global Mariner Offshore has launched legal action against TH Heavy Engineering, Floatech, Yinson, and several other parties, seeking RM74,800,000 plus interest in damages.

Global Mariner is a 20 percent owner of Floatech, with the remaining 80 percent owned by the Malaysian oil and gas facilities builder TH Heavy Engineering (THHE). The company was previously THHE’s consultant on the acquisition of an FPSO and was also involved as THHE’s project management team for the Layang FPSO project.

Floatech, formed in 2011, was principally engaged in owning and operating the FPSO Deep Producer 1 that was to be delivered by THHE for JX Nippon’s Layang field in Malaysia. 

However, THEE and Floatech were unable to deliver the FPSO, and the contract was eventually novated to Yinson which last year delivered its Helang FPSO for the project. Production from the offshore field started in December 2019.

Now, according to separate statements by THHE on Thursday, and FPSO provider Yinson on Friday, respectively, Global Mariner Offshore has served the companies with the writ of summons and a statement of claim. THHE said the legal action was initiated against it, Floatech and nine other parties.

Yinson said that Global Mariner Offshore has premised its alleged claims based on "Inducement; Fraudulent accounts; Conspiracy; Accounting fraud/fraud on the court, Unjust enrichment."

According to Yinson, the amount claimed (RM74,800,000.00) represents 20% of RM374 million of consideration from novation of the charter contract.

"Claims unfounded"

Apart from the amount claimed, Global Mariner Offshore is seeking a 5% interest per year on the sum of RM74,800,000.00 from 18.2.2014 until the date of judgment, and 5% interest on the judgment sum from the date of the judgment until the date of full realization of the judgment sum.

Global Mariner Offshore has also accused the defendants of defrauding the court to approve THHE's Scheme of Arrangement that stipulated, among other things, the novation of the FPSO contract to Yinson.

Per Yinson, Global Mariner Offshore is seeking an order that the novation of the JX Nippon contract from THHE to Yinson "be set aside."

OEDigital has reached out to Yinson, seeking more info on what is meant by the request for the FPSO contract novation be set aside, given that the FPSO is already at the offshore location, producing oil. We'll update the article if we receive any response.

On top of everything, Global Mariner Offshore is seeking for general damages, and punitive and/or exemplary damages to be assessed "pursuant to the alleged Defendants’ fraudulent conduct."  

Yinson said:" The company has since engaged Counsel to defend GMOS’s alleged claims. Counsel is of the view that the claims are devoid of merit and the Company will defend the alleged claims rigorously."

THHE said: "Upon consulting its solicitors, THHE and Floatech (L) Ltd. [are] of the view that the claims are unfounded and that there are reasonable grounds to challenge the claims.