BP Exploration Operating Company Ltd v Kvaerner Oilfield Products Ltd & Anor

Parties

Procedural Posture

Commercial / Trial of Preliminary Issues

Legal Issues

1. 1 Whether BP was contractually obliged to procure insurance cover for Kvaerner and CCL co-extensive with its own under the Construction All Risks Policy
2. 2 Whether the waiver of subrogation in the policy precludes BP's insurers from pursuing claims against Kvaerner and CCL
3. 3 Whether Kvaerner and CCL are entitled to the benefit of cover as 'Other Assureds' under the policy

Ratio Decidendi

Clause 10.5(b) of the Development Contract is a free-standing provision not qualified by the opening words of clause 10.5; BP was contractually obliged to procure Construction All Risks insurance for Kvaerner and CCL co-extensive with its own cover, entitling them to the benefit of the waiver of subrogation and full cover as 'Other Assureds'.

Court Disposition

judgment for Kvaerner and CCL on preliminary issues

Orders

• Kvaerner and CCL are entitled to the benefit of cover under BP’s Construction All Risks Policy co-extensive with that available to BP.
• BP’s insurers are precluded from pursuing subrogated claims against Kvaerner and CCL in respect of the loss and damage claimed.