BP Exploration Operating Company Ltd v Dolphin Drilling Ltd [2009] EWHC 3119 (Comm) (03 December 2009)

BP Exploration Operating Company Ltd v Dolphin Drilling Ltd [2009] EWHC 3119 (Comm) (03 December 2009)

The contract, including the standard LOGIC terms, gives BP an express right to terminate at its convenience at any time, including before the Commencement Date, with payments limited to work performed and specified upgrade costs. There is no basis to read in a restriction limiting this right to post-Commencement Date. The language is clear and commercially rational in the context of industry practice.

Citation
[2009] EWHC 3119 (Comm)
Parties
Claimant: BP Exploration Operating Company Limited; Defendant: Dolphin Drilling Limited
Jurisdiction
England and Wales
Judgment Date
03 December 2009
Procedural Posture
Commercial Contract Dispute (cpr Part 8 Claim) / High Court (commercial Court) Judgment
Outcome
Declarations granted in favour of BP.
Legal Topics
Contract Construction, Termination for Convenience, Remedies for Breach, Interpretation of Standard Form Contracts
Contract Law Commercial Law Oil and Gas Law Contract Construction Termination for Convenience Remedies for Breach Interpretation of Standard Form Contracts

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Parties

BP Exploration Operating Company Limited

Claimant

Dolphin Drilling Limited

Defendant

Procedural Posture

Commercial Contract Dispute (cpr Part 8 Claim) / High Court (commercial Court) Judgment

Legal Issues

  1. 1 Whether BP is entitled to terminate the drilling rig contract at its convenience prior to the Commencement Date without liability for loss of profit.
  2. 2 Whether the contract's termination provisions apply before the Commencement Date.

Ratio Decidendi

The contract, including the standard LOGIC terms, gives BP an express right to terminate at its convenience at any time, including before the Commencement Date, with payments limited to work performed and specified upgrade costs. There is no basis to read in a restriction limiting this right to post-Commencement Date. The language is clear and commercially rational in the context of industry practice.

Court Disposition

Declarations granted in favour of BP.

Orders

  • BP is entitled to terminate the contract at its convenience at any time, including before the Commencement Date, without liability for loss of profit beyond sums due for work performed and specified upgrade costs.