A new international arbitration proceeding related to Arctic LNG 2 involving Hanwha Ocean has been confirmed. On September 1, 2026, LLC Arctic LNG 2 applied for arbitration against Hanwha Ocean at the Singapore International Arbitration Centre (SIAC). The dispute concerns alleged breaches of Step In Agreements connected to shipbuilding contracts terminated by Hanwha Ocean.
The disclosed claim amount is USD 1 billion. Hanwha Ocean’s filing converted this amount to KRW 1.3703 trillion using the exchange rate of KRW 1,370.30 per U.S. dollar as of September 2, 2026. This represents 22.2% of Hanwha Ocean’s consolidated equity of KRW 6.175 trillion at the end of 2025.
The key point is that KRW 1.3703 trillion is not a confirmed loss, but the initial claim amount presented by the applicant in the notice of arbitration.
Key Development
The key development is that the dispute related to the contract termination has moved to the stage of an international arbitration filing. The applicant is seeking damages not only for the shipbuilding contracts themselves but also for alleged breaches of the Step In Agreements. However, the filing does not provide details of the claim, and states that the applicant believes the claim amount is highly likely to exceed USD 1 billion in the future.
Accordingly, the figure currently available is the size of the claim at the start of the proceedings, not the final amount of damages. The specific damage items, calculation methodology, and case number cannot be confirmed from the publicly available information alone.
Current Status
Hanwha Ocean stated that it will respond to the proceedings by constituting an arbitral tribunal and submitting a response under the Singapore arbitration rules. It also explained that it plans to pursue an amicable resolution in parallel.
The proceedings confirmed so far are as follows:
- LLC Arctic LNG 2’s application for international arbitration at SIAC
- Allegations of breaches involving the shipbuilding contracts and Step In Agreements
- Hanwha Ocean’s preparations to constitute an arbitral tribunal and submit a response
- Ongoing efforts that include the possibility of an amicable resolution
Impact
Because the claim amount equals 22.2% of Hanwha Ocean’s equity, the matter could attract increased attention from investors and raise concerns about the company’s finances. However, the filing of arbitration alone does not determine Hanwha Ocean’s final legal liability or actual payment amount. Based on the currently disclosed filings and reports, the final damages and whether a provision will be recognized also cannot be determined.
The background to the dispute is Arctic LNG 2, an LNG project in Russia’s Arctic region. U.S. Treasury materials describe LLC Arctic LNG 2 as the entity managing the project, which has also been discussed in the context of international sanctions. However, this does not mean that the sanctions status of the Arctic LNG 2 project or Hanwha Ocean’s legal liability in this arbitration has been finally determined.
What to Monitor Next
Going forward, it will be important to monitor whether an arbitral tribunal is constituted, when Hanwha Ocean submits its response, the specific damage items and calculation methodology that the applicant may present, and whether the claim amount changes. Until additional arbitration materials or disclosures are released, the USD 1 billion figure should not be interpreted as the final damages amount.
In summary, this is an international arbitration in which LLC Arctic LNG 2 has brought an initial damages claim of KRW 1.3703 trillion against Hanwha Ocean. What has been confirmed so far is the filing, the claim amount, and Hanwha Ocean’s plan to respond procedurally. Final liability and the actual financial impact must be assessed through the subsequent arbitration proceedings and additional disclosures.