Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors [2004] EWCA Civ 156 (17 February 2004)

Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors [2004] EWCA Civ 156 (17 February 2004)

The Loss Payment under Clause 11 is due within 90 days of the total loss event, and the correct date for discounting future payments is the end of that 90-day period, not the date of loss. No declaration is required to trigger the obligation; the payment becomes due automatically at the end of the 90 days. The Loss Payment and Termination Payment provisions are not identical in effect.

Citation
[2004] EWCA Civ 156
Parties
Claimant/first Respondent: Petromec Inc; First Defendant/appellant: Petroleo Brasileiro SA Petrobras; Second Defendant/second Respondent: Braspetro Oil Services Company; Third Defendant/third Respondent: Societa Armamento Navi Appoggio SpA; Fourth Defendant: Den Norske Bank ASA
Jurisdiction
England and Wales
Judgment Date
17 February 2004
Procedural Posture
Commercial Contract Dispute (appeal) / Appeal From High Court (commercial Court) to Court of Appeal, on Preliminary Issue
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contract Terms, Liquidated Damages, Total Loss Provisions, Discounting of Future Payments, Overdue Interest, Drafting Errors in Contracts
Commercial Law Contract Law Maritime Law Interpretation of Contract Terms Liquidated Damages Total Loss Provisions Discounting of Future Payments Overdue Interest +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Petromec Inc

Claimant/first Respondent

Petroleo Brasileiro SA Petrobras

First Defendant/appellant

Braspetro Oil Services Company

Second Defendant/second Respondent

Societa Armamento Navi Appoggio SpA

Third Defendant/third Respondent

Den Norske Bank ASA

Fourth Defendant

Procedural Posture

Commercial Contract Dispute (appeal) / Appeal From High Court (commercial Court) to Court of Appeal, on Preliminary Issue

Legal Issues

  1. 1 What is the correct date to which future payments should be discounted under the Loss Payment clause in the event of a total loss?
  2. 2 Does the Loss Payment require a declaration to become due, or is it automatically due after 90 days?
  3. 3 Are the Loss Payment and Termination Payment provisions identical in effect?

Ratio Decidendi

The Loss Payment under Clause 11 is due within 90 days of the total loss event, and the correct date for discounting future payments is the end of that 90-day period, not the date of loss. No declaration is required to trigger the obligation; the payment becomes due automatically at the end of the 90 days. The Loss Payment and Termination Payment provisions are not identical in effect.

Court Disposition

Appeal dismissed

Orders

  • Declaration that the correct amount of the Loss Payment is US$334,557,499.34, discounted to the date 90 days after the total loss event (18 June 2001)