Kellogg Brown & Root Inc v Concordia Maritime Ag [2006] EWHC 3358 (Comm) (21 December 2006)

Kellogg Brown & Root Inc v Concordia Maritime Ag [2006] EWHC 3358 (Comm) (21 December 2006)

The court found that the guarantee provided by Concordia Maritime AG did not extend to the full steel replacement costs claimed by KBR, as the contractual and technical requirements were not met as alleged. The court held that the defendants did not owe a special duty of care to KBR in respect of pre-contractual statements, nor did the statements amount to negligent misstatements or collateral warranties. The parties' relationship and risk allocation were governed by the negotiated contract, and KBR's reliance on alleged statements was not reasonable in the circumstances.

Citation
[2006] EWHC 3358 (Comm)
Parties
Claimant: Kellogg Brown & Root Inc; Defendant: Concordia Maritime AG; Defendant: Stena Bulk AB; Defendant: Concordia Maritime AB; Defendant: Northern Marine Management USA LLC (formerly Universe Tankships (Delaware LLC))
Jurisdiction
England and Wales
Judgment Date
21 December 2006
Procedural Posture
Commercial Court Claim / Judgment After Trial
Outcome
Claim dismissed
Legal Topics
Guarantee Liability, Negligent Misstatement, Collateral Warranty, Interpretation of Contract Terms, Ship Sale and Conversion, Damages for Economic Loss
Contract Law Tort Law Commercial Law Guarantee Liability Negligent Misstatement Collateral Warranty Interpretation of Contract Terms Ship Sale and Conversion +1 more

Case Brief

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Parties

Kellogg Brown & Root Inc

Claimant

Concordia Maritime AG

Defendant

Stena Bulk AB

Defendant

Concordia Maritime AB

Defendant

Northern Marine Management USA LLC (formerly Universe Tankships (Delaware LLC))

Defendant

Procedural Posture

Commercial Court Claim / Judgment After Trial

Legal Issues

  1. 1 Whether the defendant is liable under a guarantee for steel replacement costs exceeding 150 tonnes under Petrobras specifications.
  2. 2 Whether the defendants made negligent misstatements or gave collateral warranties regarding the condition and suitability of the vessel for conversion to FPSO.
  3. 3 Interpretation of contractual terms, especially the meaning of 'original plate thickness' in Petrobras specifications.

Ratio Decidendi

The court found that the guarantee provided by Concordia Maritime AG did not extend to the full steel replacement costs claimed by KBR, as the contractual and technical requirements were not met as alleged. The court held that the defendants did not owe a special duty of care to KBR in respect of pre-contractual statements, nor did the statements amount to negligent misstatements or collateral warranties. The parties' relationship and risk allocation were governed by the negotiated contract, and KBR's reliance on alleged statements was not reasonable in the circumstances.

Court Disposition

Claim dismissed

Orders

  • Claim against Concordia Maritime AG under the guarantee is dismissed.
  • Claims for negligent misstatement and collateral warranty are dismissed.