Singapore’s Keppel Corporation has filed arbitration proceedings against the local shipbuilding firm Seatrium, seeking to recover a claim amounting to S$68.4 million (approximately US$53.33 million). This action relates to the ongoing corruption crackdown in Brazil, as announced by both companies on Tuesday.
In 2023, Seatrium provisioned S$82.4 million to cover potential liabilities to Keppel concerning the crackdown, which is part of Operation Car Wash. Seatrium clarified that its obligation to pay Keppel expired in February of the current year and emphasised that no binding or legally enforceable agreements had been signed with Brazilian authorities prior to that date.
Earlier this year, Seatrium stated that it would pay 728.9 million Brazilian real (about US$134.45 million) to Brazilian authorities as part of leniency agreements. Keppel indicated that S$68.4 million was payable by Seatrium upon execution of its final agreement.
Seatrium announced that it is currently reviewing the claims and allegations presented in the arbitration and intends to defend itself vigorously. Keppel’s offshore and marine segment merged with Sembcorp Marine in 2023, resulting in the creation of Seatrium. Brazilian authorities had previously conducted searches at Sembcorp’s shipyard as part of their graft investigation.
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These investigations are connected to Operation Car Wash, a major anti-corruption initiative launched in Brazil in 2014. The operation aimed to dismantle extensive corruption schemes across Latin America and resulted in numerous arrests, including several former presidents.
This case underscores the ongoing efforts to combat corruption and highlights the legal complexities involved in international corporate and governmental dealings.
