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The engine manufacturer is ordered to pay some €6.8 million to cover a purchase down-payment refund and legal costs.

The latest arbitration forms part of an ongoing dispute in relation to Skaugen’s agreement to purchase 12 marine diesel propulsion systems. The company believes that MAN has misrepresented the fuel consumption on many, or all, of the 12 systems.

MAN has admitted to manipulating the Factory Acceptance Tests (FAT) results on three of the engines in order to conceal the excess fuel consumption.

In a statement issued this week, I M Skaugen says that: ‘We have secured documents showing that these fraudulent manipulations have been performed by MAN on a regular basis for more than 10 years at their company – and for many of their clients.’

MAN has stated that these fraudulent activities ceased by spring 2011, and the company received a fine over these actions imposed by an Augsburg court in March 2013.

However, I M Skaugen says that the engine manufacturer has refused to provide compensation over the admitted fraud and has continued to refuse to repay the gas carrier company for prepayment made for engines not delivered.

The most recent arbitration focused on whether or not Skaugen was entitled to terminate the contract for the purchase of two sets of Type 6L 48/60B marine diesel engines. The tribunal found in favour of Skaugen and also held that MAN ‘had fundamentally violated its obligation to loyally disclose to Skaugen all information about the engines in dispute, which Skaugen had a legitimate interest in receiving.’

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