Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors

Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors

The correct date for discounting future payments in the calculation of the Loss Payment under Clause 11 is the end of the 90-day period following the total loss, not the date of the loss itself. The Loss Payment becomes definitively due at the end of the 90 days, and the contract does not require or provide for a declaration to trigger payment under Clause 11. The procedures under Clauses 11 and 13 are distinct.

Parties
Claimant/first Respondent: Petromec Inc; Defendant/appellant: Petroleo Brasileiro SA Petrobras; Defendant/appellant: Braspetro Oil Services Company; Defendant/second Respondent: Societa Armamento Navi Appoggio SpA; Defendant/third Respondent: Den Norske Bank ASA
Jurisdiction
England and Wales
Judgment Date
17 February 2004
Procedural Posture
Civil Appeal / Appeal From High Court (commercial Court) on a Preliminary Issue
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contract Terms, Liquidated Damages, Charterparty Agreements, Total Loss Provisions
Contract Law Commercial Law Interpretation of Contract Terms Liquidated Damages Charterparty Agreements Total Loss Provisions

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Parties

Petromec Inc

Claimant/first Respondent

Petroleo Brasileiro SA Petrobras

Defendant/appellant

Braspetro Oil Services Company

Defendant/appellant

Societa Armamento Navi Appoggio SpA

Defendant/second Respondent

Den Norske Bank ASA

Defendant/third Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (commercial Court) on a Preliminary Issue

Legal Issues

  1. 1 What is the correct date to which future payments under the Bareboat Charter and Purchase Agreement should be discounted when calculating the Loss Payment after a total loss event?
  2. 2 Are the procedures and payment triggers under the 'Loss Payment' and 'Termination Payment' provisions identical or distinct?

Ratio Decidendi

The correct date for discounting future payments in the calculation of the Loss Payment under Clause 11 is the end of the 90-day period following the total loss, not the date of the loss itself. The Loss Payment becomes definitively due at the end of the 90 days, and the contract does not require or provide for a declaration to trigger payment under Clause 11. The procedures under Clauses 11 and 13 are distinct.

Court Disposition

Appeal dismissed

Orders

  • Declaration that the correct amount of the Loss Payment is US$334,557,499.34, discounted to the end of the 90-day period after total loss.
  • Costs to follow the event.