Transocean Drilling UK Ltd v Providence Resources Plc [2016] EWCA Civ 372 (13 April 2016)

Transocean Drilling UK Ltd v Providence Resources Plc [2016] EWCA Civ 372 (13 April 2016)

Clause 20 of the contract, properly construed, excludes liability for wasted spread costs as consequential losses, as the language is clear and unambiguous and the mutual exclusion applies to such costs. The contra proferentem rule and restrictive construction are not applicable in this context. Clause 13.6 does not create a substantive right to set-off where the underlying claim is excluded by clause 20.

Citation
[2016] EWCA Civ 372
Parties
Claimant/appellant: Transocean Drilling U. K. Ltd; Defendant/respondent: Providence Resources Plc
Jurisdiction
England and Wales
Judgment Date
13 April 2016
Procedural Posture
Appeal (commercial Contract) / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Exclusion Clauses, Interpretation of Contracts, Consequential Loss, Set Off, Freedom of Contract
Commercial Law Contract Law Exclusion Clauses Interpretation of Contracts Consequential Loss Set Off Freedom of Contract

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Parties

Transocean Drilling U. K. Ltd

Claimant/appellant

Providence Resources Plc

Defendant/respondent

Procedural Posture

Appeal (commercial Contract) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether 'spread costs' incurred by Providence as a result of Transocean's breach are 'consequential losses' excluded by clause 20 of the contract
  2. 2 Whether Providence can recover spread costs by way of set-off under clause 13.6

Ratio Decidendi

Clause 20 of the contract, properly construed, excludes liability for wasted spread costs as consequential losses, as the language is clear and unambiguous and the mutual exclusion applies to such costs. The contra proferentem rule and restrictive construction are not applicable in this context. Clause 13.6 does not create a substantive right to set-off where the underlying claim is excluded by clause 20.

Court Disposition

Appeal allowed

Orders

  • Judgment below set aside to the extent appealed; Providence's claim for spread costs dismissed as excluded by clause 20; set-off argument rejected.