ONGC's package deal to settle dispute with service provider

Vol 6, PW 14 (11 Sep 02) News in Brief
     

ONGC has agreed to return $2.2m in 'Liquidated Damages' to service provider Asian Marine Contractors after concluding it has no case.

At issue is a dispute from 1998 when ONGC hired Asian Marine Contractors to replace oil and gas risers at a cost of $22m in the Bombay High-Uran main trunk lines. ONGC retained $2.2m as liquidated damages because of delay in project implementation.

For its part Asian Marine Contractors claimed $16m from ONGC as additional costs incurred during execution of the project, refund of liquidated damages and interest on delayed payment. Before embarking on a costly legal battle, ONGC took a second opinion and realised it had no case as it suffered no damage because of the delay.

ONGC has now agreed a settlement in exchange for an undertaking by the contractor not to pursue arbitration.