US contractor sues Chinese steelmaker for $400m over wind farm

American engineer Fluor has said that it is filing a lawsuit against Shanghai Zhenhua Heavy Industry (ZPMC), a Chinese maker of steel structures. 

ZPMC notified the Shanghai Stock Exchange yesterday that Fluor was seeking $406m in damages in the UK’s High Court related to the Greater Gabbard wind farm off the coast of Harwich.

Fluor has not issued a statement on the lawsuit. However, a spokesman for the company confirmed the legal action tonews website, Recharge. Fluor’s UK operation, which is based in Farnborough, Hampshire, is claiming delays and quality issues in three of the eight batches of monopiles delivered to the project.

The case relates to a 2008 contract whereby Fluor entered into a joint venture with the Airtricity utility company to provide the engineering, procurement and construction contract for the 504MW Greater Gabbard offshore wind farm in the North Sea. 

Later that year it awarded ZPMC a $295m order for monopile foundations and transition pieces to hold the 140 Siemens 3.6MW turbines in place.

By late 2010, however, things began go wrong, and by 2012, Fluor had suffered losses totalling $819m. It tried to sue its Airtricity partners, the energy firm SSE and the German supplier RWE, claiming their demands for additional testing and repairs had added unnecessarily to the schedule and budget overruns. 

For their part, SSE and RWE claimed much of the equipment supplied by ZPMC through Fluor was defective.

In 2012 an arbitration panel ruled against Fluor.

The last press statement Fluor made regarding Greater Gabbard was in March 2013, when it said that "all disputes" with SSE and RWE had been resolved and added that its "involvement in the project" had been concluded. 

The company now seems to have changed its mind and has taken the fight to ZPMC, a company with which it has worked on other infrastructure projects.

The Chinese firm told local media outlets it would vigorously defend itself in the case.

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