Shipbuilding Agreement - From jubilation to the brink of bankruptcy

"What was initially billed as a lucrative order from a European customer has pushed a Shandong Province shipbuilding company to the brink of bankruptcy and ruined its relationship with one of China’s biggest banks…..

Shipyard industry experts in China said Rushan was apparently trapped as a consequence of its own inexperience.
A Jiangsu Province shipbuilder’s legal affairs manager said that a smart shipbuilder “should sign a supplemental agreement with a buyer, agreeing that if the buyer makes any changes to a ship, resulting in changes to deadweight tonnage, the buyer cannot hold the shipbuilder accountable.” This is something Rushan apparently failed to do.
“Without experience,” a bank source familiar with Rushan’s dilemma said, “you have to accept possible risks.”

Read more in CAIXIN Online, Shandong Shipyard’s Lesson: Don’t Rock the Bank

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