Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors [2007] EWHC 1589 (Comm) (06 July 2007)

Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors [2007] EWHC 1589 (Comm) (06 July 2007)

Petromec must plead and prove its claim by identifying the work done and costs incurred for each change to specification, demonstrating instructions from Petrobras/Brasoil under clause 10 for clause 12.2 claims, and showing reasonableness of work and costs; a global claim methodology is insufficient and does not satisfy contractual requirements.

Citation
[2007] EWHC 1589 (Comm)
Parties
Claimant: Petromec Inc; Defendant / Part 20 Claimant: Petroleo Brasileiro S.A. Petrobras; Defendant / Part 20 Claimant: Braspetro Oil Services Company; Part 20 Defendant: Petro-Deep Inc.; Part 20 Defendant: Maritima Petroleo e Engenharia Ltda
Jurisdiction
England and Wales
Judgment Date
06 July 2007
Procedural Posture
Commercial Contract Dispute / Preliminary Issues Hearing
Outcome
Petromec's global claim methodology rejected; Petromec must plead and prove claims in accordance with contract requirements.
Legal Topics
Contract Interpretation, Variation Orders, Global Claims, Compensation for Specification Changes
Contract Law Construction Law Commercial Law Contract Interpretation Variation Orders Global Claims Compensation for Specification Changes

Case Brief

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Parties

Petromec Inc

Claimant

Petroleo Brasileiro S.A. Petrobras

Defendant / Part 20 Claimant

Braspetro Oil Services Company

Defendant / Part 20 Claimant

Petro-Deep Inc.

Part 20 Defendant

Maritima Petroleo e Engenharia Ltda

Part 20 Defendant

Procedural Posture

Commercial Contract Dispute / Preliminary Issues Hearing

Legal Issues

  1. 1 Proper construction of clauses 12.1, 12.2, and 12.3 of the Supervision Agreement
  2. 2 Methodology for assessing reasonable extra costs
  3. 3 Necessity for separate ascertainment under clauses 12.1 and 12.2

Ratio Decidendi

Petromec must plead and prove its claim by identifying the work done and costs incurred for each change to specification, demonstrating instructions from Petrobras/Brasoil under clause 10 for clause 12.2 claims, and showing reasonableness of work and costs; a global claim methodology is insufficient and does not satisfy contractual requirements.

Court Disposition

Petromec's global claim methodology rejected; Petromec must plead and prove claims in accordance with contract requirements.

Orders

  • Petromec must particularise claims by identifying work, instructions, and costs for each change under clauses 12.1 and 12.2.
  • Petromec must produce evidence of expenditure and reasonableness for each element claimed.