Hanwha Ocean faces a second billion-dollar claim over Arctic LNG 2 ships
The project charterer has filed at Singapore while the original owners' arbitration remains unresolved
Hanwha Ocean has disclosed a second international arbitration arising from the cancelled order for ice-class LNG carriers built for Russia's Arctic LNG 2 project, this one brought by the charterer rather than the shipowners.
The shipbuilder told the Korea Exchange that it had received a request for arbitration filed at the Singapore International Arbitration Centre by LLC Arctic LNG 2, the project owner and charterer of the vessels. The claim is for approximately 1.3703 trillion won, about one billion US dollars, and rests on an alleged breach of step-in agreements attached to a shipbuilding contract that has already been terminated.
A step-in arrangement lets a third party enter a contract and exercise certain rights when the original counterparties fail to perform. LLC Arctic LNG 2 was not the party that ordered the ships and so could not arbitrate under the building contracts themselves. It claims instead that Hanwha Ocean infringed the rights granted to it under that separate agreement during the termination process.
The dispute goes back to October 2020, when Daewoo Shipbuilding and Marine Engineering, now Hanwha Ocean, signed contracts with three Russian shipowners, Elixon, Azoria and Glorina, for three 172,500 cubic metre Arc7 ice-breaking LNG carriers. The disclosed contract value was roughly 850 million dollars, with all three due for delivery by 31 July 2023.
Western sanctions on Russia made performance impossible, and the yard terminated the three contracts in May, July and November 2022. The shipowners took the matter to Singapore in May 2023, demanding performance and damages of up to 1.159 trillion won, about 862 million dollars at current rates. That case is still running, with written submissions and evidence exchanged through the first half of 2026.
The new claim is equivalent to 22.2% of Hanwha Ocean's consolidated net assets of 6.175 trillion won projected for the end of 2025. The arbitration notice does not yet specify the individual heads of damage or the basis for calculating them, so the figure is a preliminary one.
Hanwha Ocean said it will constitute an arbitral tribunal and submit its defence under the centre's rules, and that it intends to pursue a robust legal defence while also seeking an amicable settlement. The company noted that the claimed amount could change as proceedings advance.
Two cases from one cancelled batch is the structural point. The yard walked away from a contract it could not lawfully perform, and it is being pursued twice over from two different contractual directions for the same decision.
This story is part of the Maritime Briefing of 11 September 2026.
