Guam - As the Guam Shipyard continues to negotiate the terms of a long-term lease with the Navy for the Ship Repair Facility, the company continues to be embroiled in litigation over the sinking of the dry dock machinist, known as Big Blue.  As we first reported last year, the Shipyard and president and CEO Mathews Pothen filed suit against Zurich American Insurance Company and Starr Indemnity and Liability Company, seeking $6.8 million plus an additional $394,000.   

The Shipyard claimed a breach of contract, alleging the companies did not make payment of damages the shipyard incurred to resurface the dry dock after it sunk.  Zurich filed a motion to dismiss and filed its own lawsuit against the Shipyard, claiming the insurance contract was invalid because Big Blue was never certified by the Navy.

Zurich has also asked the court to impose sanctions against the shipyard for not allowing them to conduct a video inspection of the dry dock.  A hearing on the matter is set for next month in the District Court. 

In the meantime, the Shipyard was the only company that responded to the Navy's request for interested companies to enter into a long-term lease of the Ship Repair Facility.  The details of that new contract are still being negotiated but are expected to take affect on October 1. 

The Guam Economic Development Authority's lease with the Navy and the Shipyard's sublease with GEDA for the property is set to expire on September 31.