SEOUL -- Samsung Engineering, an engineering, procurement and construction (EPC) company in South Korea, has filed for arbitration over compensation demanded by its consortium partner in the canceled contract to build the third phase of a power and desalination plant on the Red Sea coast in Saudi Arabia.
Samsung Engineering said in a regulatory filing on Monday that the arbitration request was sent to the joint arbitration body of the Dubai International Financial Center and the London Court of Arbitration (LCIA). A stake is about $607.7 million in compensation.
In 2012, Saudi Arabia's national water agency, Saline Water Conversion Corporation (SWCC), awarded the contract to a consortium involving Samsung Engineering and Saudi Arabia's Al Toukhi group. SWCC changed turbine specifications and canceled its contract with the consortium in January 2017 owing to a dispute over new pricing.
At the time of the contract's cancellation, the project was about 55 percent completed. SWCC signed a new deal with China’s Sepco III Electric Power Construction Corp. to finish work on the plant. In November 2017, Samsung Engineering asked the World Bank's International Center for Settlement of Investment Disputes (ICSID) to begin arbitration proceedings against Saudi Arabia.
In its statement on Monday, Samsung Engineering dismissed Al Toukhi's claims as weak and unjust, insisting responsibility rests upon SWCC. The South Korean company promised to file a countersuit and reveal the unfairness of Al Toukhi's claims.
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