The subsidiaries of YZJ Shipbldg SGD have been ordered to refund its customers their US$3.32 million ($4.5 million) deposit after an order by the arbitration tribunal in London. The order is said to be final.

Shares of Yangzijiang Shipbuilding fell 4% in the morning trading.

The refund comes after “certain entities” commenced arbitration proceedings against three of the group’s wholly-owned subsidiaries, Jiangsu Tianchen Marine Import & Export Co., Ltd., Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd., in June and September 2022 for an alleged breach of contract over 10 shipbuilding contracts.

The US$3.32 million deposit concerns two contracts, under which the tribunal reserves the jurisdiction to make further awards. Other claims in relation to some US$832.2 million comprising the loss of bargain and profits were not upheld.

The arbitration is not expected to affect Yangzijiang’s financial position for the FY2025 ending Dec 31 materially. The group, in its Oct 12, 2024, announcement, said it had a “reasonably good prospect of success” in the arbitration claims levelled against them.

In its latest filing dated March 3, the group notes that it is “unable to determine” its customers’ next course of action and that it is “closely coordinating with our legal advisors on the remaining matters and potential response strategies”.

Shares in Yangzijiang Shipbuilding closed 4 cents higher or 1.68% up at $2.42 on March 3. Shares in the group are down 18.24% year-to-date after the US proposed fees on China’s commercial ships on Feb 22.