By Alister Doyle

OSLO, Oct 21 (Reuters) – Norwegian shipowner I.M. Skaugen has disclosed it’s in search of $50 million in compensation from a marine unit of Volkswagen for rigging efficiency checks of ship engines produced over a decade in the past.

I.M. Skaugen alleges that the specs of the six engines it purchased from MAN had been deceptive and it’s in search of compensation for larger gasoline use than specified over the anticipated 30-year lifetimes of the engines.

VW now owns 75 p.c of MAN Diesel and Turbo SE, though it was not an proprietor of MAN when the engines had been made. MAN equipped the engines to Skaugen in 2002-03 and has authorized counter-claims over contracts with Skaugen. VW first acquired a stake of twenty-two p.c in MAN in 2006.

I.M. Skaugen has determined to publicize the case, filed in a Singapore court docket in July, as a result of it sees similarities between MAN’s dealing with of the ship engine checks underneath VW possession and the German firm’s response to the most important scandal in its 78-year historical past, brought on by dishonest diesel automobile emissions checks.

“We have tried to engage MAN for quite some time to sort out these problems. In 2012 we were promised transparency and we were promised that they would do whatever they could to settle the issues,” CEO Morits Skaugen advised Reuters.

“My goal here is to highlight that the method being applied, the software, is the same. The purpose seemed to be the same, to conceal the fact that these engines do not meet the promised standards, whether it is fuel consumption or emissions.”

A VW spokesman contacted by Reuters declined to remark. VW acquired a controlling 55 p.c stake in MAN in 2011, up from virtually 30 it had held since 2007, and now owns 75 p.c.

MAN admitted in 2011 that a few of its manufacturing unit checks of four-stroke marine diesel engines might have been rigged to point out artificially low gasoline use. A MAN spokesman stated the corporate has labored to compensate purchasers since however has not printed a listing of these affected and has been unable to settle with I.M. Skaugen.

In July 2015, I.M. Skaugen filed a $20 million demand in a Singapore court docket for compensation from MAN for the six engines which it says had been underperforming. Skaugen stated the corporate would revise up the quantity to $50 million to replicate new estimates for gasoline and different prices.

“We are just asking for a refund,” Skaugen stated.

Jan Dietrich Mueller, head of group communications and advertising at MAN, stated in an e-mail to Reuters it “had tried to amicably settle these issues out of court and had been negotiating with this customer for several months.”

However, talks between MAN and Skaugen have now collapsed.

“The customer (I.M. Skaugen) had canceled the negotiations unilaterally,” Mueller stated. Skaugen says that the 2 corporations had been close to to an general settlement however that MAN withdrew assist for its chief negotiator, prompting a collapse.

Mueller added that MAN additionally has “substantial outstanding claims” in opposition to Skaugen linked to “different supply contracts.” He declined to offer particulars however Skaugen stated MAN’s greatest demand is for 10.5 million euros ($11.93 million) in damages from I.M. Skaugen within the Danish Institute of Arbitration for failure to simply accept two different engines it had ordered.

Skaugen stated it will not have positioned the order had it recognized concerning the underperformance of the opposite 4.

In 2013, an Augsburg court docket fined MAN 8.2 million euros for violating legal guidelines with the deceptive take a look at outcomes of dozens of marine diesel engines, together with these offered to Skaugen. Software within the manufacturing unit computer systems allowed shows to point out decrease gasoline consumption than in actuality, the court docket stated.

Mueller stated that the corporate had since overhauled the checks and accomplished every little thing potential to settle disputes. ($1 = 8.0570 Norwegian crowns) ($1 = 0.8799 euros) (Editing by Anna Willard)

(c) Copyright Thomson Reuters 2015.

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