Braspetro Oil Services Company & Anor v FPSO Construction Inc & Anor

Braspetro Oil Services Company & Anor v FPSO Construction Inc & Anor

On the true construction of the Side Letter Agreements, each Side Letter Agreement gave rise to an obligation on the part of FCI to repay to Brasoil such sums, if any, paid by Brasoil to a third party supplier following a conforming written request, subject to the aggregate limit. The reservation of claims in the Side Letter Agreements is in wide terms and includes all claims, costs, and expenses due to either party in relation to the projects, including contractual and quasi-contractual claims. The Jurong Settlement Agreement does not preclude FCI from asserting cross-claims against Brasoil when facing claims under the Side Letter Agreements.

Parties
Claimant: Braspetro Oil Services Company; Claimant: Petroleo Brasileiro S. A. Petrobras; Defendant: FPSO Construction Inc.; Defendant: FPSO Engeneering Inc.; Defendant: FSO Construction Inc.; Defendant: FSO Engeneering Inc.
Jurisdiction
England and Wales
Judgment Date
24 June 2005
Procedural Posture
Commercial Contractual Dispute (preliminary Issues) / Judgment on Preliminary Issues
Outcome
Preliminary issues determined: Brasoil is entitled in principle to payment from FCI of amounts paid to third party suppliers under the Side Letter Agreements; FCI is not precluded from asserting cross-claims or defences by reason of the Jurong Settlement Agreement or the Side Letter Agreements.
Legal Topics
Construction of Contracts, Set Off and Cross Claims, Obligations Under Side Letter Agreements, Settlement Agreements
Commercial Law Contract Law Construction of Contracts Set Off and Cross Claims Obligations Under Side Letter Agreements Settlement Agreements

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Parties

Braspetro Oil Services Company

Claimant

Petroleo Brasileiro S. A. Petrobras

Claimant

FPSO Construction Inc.

Defendant

FPSO Engeneering Inc.

Defendant

FSO Construction Inc.

Defendant

FSO Engeneering Inc.

Defendant

Procedural Posture

Commercial Contractual Dispute (preliminary Issues) / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether, on the proper construction of the Side Letter Agreements, Brasoil is entitled to payment from FCI of amounts paid to third party suppliers (including Jurong) by Brasoil pursuant to the Side Letter Agreements
  2. 2 Whether the defendants are precluded from asserting cross-claims or defences by reason of the Jurong Settlement Agreement and/or the Side Letter Agreements

Ratio Decidendi

On the true construction of the Side Letter Agreements, each Side Letter Agreement gave rise to an obligation on the part of FCI to repay to Brasoil such sums, if any, paid by Brasoil to a third party supplier following a conforming written request, subject to the aggregate limit. The reservation of claims in the Side Letter Agreements is in wide terms and includes all claims, costs, and expenses due to either party in relation to the projects, including contractual and quasi-contractual claims. The Jurong Settlement Agreement does not preclude FCI from asserting cross-claims against Brasoil when facing claims under the Side Letter Agreements.

Court Disposition

Preliminary issues determined: Brasoil is entitled in principle to payment from FCI of amounts paid to third party suppliers under the Side Letter Agreements; FCI is not precluded from asserting cross-claims or defences by reason of the Jurong Settlement Agreement or the Side Letter Agreements.