Louis Dreyfus Armateurs (LDA) in its notice alleged that there is a delay in the delivery of the vessel and that even if the vessel is tendered for delivery there will be deficiency in the deadweight capacity, ST Engineering said in a statement.

If the cancellation of the deal to build a roll-on/roll-off passenger ferry for LDA is valid, ST Engineering's ST Marine unit will have to repay S$129 million in milestone payments received so far plus interest.

The unit may also be liable for damages capped at 10 percent of the contract price. ST Marine has referred the matter to its legal advisers, the statement said.