Keppel S$68.4M Claim vs. Seatrium – Brazil Corruption
- Keppel Corporation has commenced arbitration proceedings against Seatrium, seeking S$68.4 million (approximately US$53.33 million as of August 26, 2024) related to fallout from Brazil's extensive corruption investigation, known...
- Operation car Wash exposed widespread corruption schemes throughout Latin America, leading to the imprisonment of numerous political and business figures, including several former presidents.
- In 2022, Seatrium (formed from the 2023 merger of Keppel's offshore and marine segment with Sembcorp marine) had already set aside S$82.4 million to cover potential claims from...
Keppel Initiates Arbitration Against Seatrium Over Brazil Corruption Case
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Dispute Origins: Operation Car Wash
Keppel Corporation has commenced arbitration proceedings against Seatrium, seeking S$68.4 million (approximately US$53.33 million as of August 26, 2024) related to fallout from Brazil’s extensive corruption investigation, known as “Operation Car Wash” (Lava Jato in Portuguese). The claim stems from alleged corruption practices uncovered during the investigation, which began in 2014.
Operation car Wash exposed widespread corruption schemes throughout Latin America, leading to the imprisonment of numerous political and business figures, including several former presidents. The investigation significantly impacted companies operating in Brazil, notably in the oil and gas and shipbuilding sectors.
Seatrium’s Previous Provisions and Leniency Agreements
In 2022, Seatrium (formed from the 2023 merger of Keppel’s offshore and marine segment with Sembcorp marine) had already set aside S$82.4 million to cover potential claims from Keppel related to Operation Car Wash. Keppel stated on Tuesday, August 26, 2024, that S$68.4 million was due following Seatrium’s final agreement.
Though, Seatrium disputes the claim, asserting that the obligation to pay Keppel expired in February 2024 and that no legally binding agreements were finalized with Brazilian authorities before that date. Earlier in 2024, Seatrium agreed to pay 728.9 million Brazilian real (roughly US$134.45 million as of August 26, 2024) to Brazilian authorities as part of leniency agreements.
Seatrium confirmed it is “vigorously” defending against Keppel’s arbitration claim and has engaged legal counsel.The company issued a cautionary notice to shareholders on August 26, 2024, advising them to seek professional financial advice before making any decisions regarding Seatrium shares or securities. This is standard practice when facing notable legal challenges.