Seadrill Management Services Ltd & Anor v OAO Gazprom

Seadrill Management Services Ltd & Anor v OAO Gazprom

The contract did not exclude the implied obligation on Seadrill to exercise reasonable skill and care in operating the rig. The indemnity and risk allocation provisions did not transfer responsibility for losses caused by Seadrill's negligence to Gazprom. Paragraph 606 did not apply because the seabed conditions were as predicted and did not cause the loss; the loss was caused solely by the negligence of Seadrill's master and crew.

Parties
Claimant/appellant: Seadrill Management Services Limited; Claimant/appellant: Seadrill Larissa Limited; Defendant/respondent: OAO Gazprom
Jurisdiction
England and Wales
Judgment Date
17 June 2010
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Construction of Contract Terms, Risk Allocation Clauses, Obligation of Reasonable Skill and Care, Indemnity Provisions
Contract Law Commercial Law Construction of Contract Terms Risk Allocation Clauses Obligation of Reasonable Skill and Care Indemnity Provisions

Case Brief

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Parties

Seadrill Management Services Limited

Claimant/appellant

Seadrill Larissa Limited

Claimant/appellant

OAO Gazprom

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the contractor (Seadrill) is liable for losses caused by negligence of its master and crew under the IDDCO contract
  2. 2 Whether the contract excludes the implied obligation to exercise reasonable skill and care
  3. 3 Whether the operator (Gazprom) bears responsibility for losses under the risk allocation provisions regardless of cause

Ratio Decidendi

The contract did not exclude the implied obligation on Seadrill to exercise reasonable skill and care in operating the rig. The indemnity and risk allocation provisions did not transfer responsibility for losses caused by Seadrill's negligence to Gazprom. Paragraph 606 did not apply because the seabed conditions were as predicted and did not cause the loss; the loss was caused solely by the negligence of Seadrill's master and crew.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; High Court judgment affirmed