Braspetro Oil Services Co & Anor v FPSO Construction Inc & Anor [2007] EWHC 1359 (Comm) (12 June 2007)

Braspetro Oil Services Co & Anor v FPSO Construction Inc & Anor [2007] EWHC 1359 (Comm) (12 June 2007)

The Side Letter Agreements created a binding obligation on FCI to repay Brasoil for sums paid to third party suppliers upon a conforming written request, subject to the aggregate limit. Where payments were made outside the Side Letter Agreement regime but on behalf of FCI, Brasoil is entitled to restitution. FCI's persistent procedural defaults, failure to provide disclosure, and non-participation justified striking out its cross-claims and entering judgment for Brasoil on the admitted and proven claims.

Citation
[2007] EWHC 1359 (Comm)
Parties
Claimant: Braspetro Oil Services Company; Claimant: Petroleo Brasileiro S. A – Petrobras; Defendant: FSO Construction Inc.; Defendant: FSO Engineering Inc.; Defendant: FPSO Construction Inc.; Defendant: FPSO Engeneering Inc.
Jurisdiction
England and Wales
Judgment Date
12 June 2007
Procedural Posture
Commercial Claim for Recovery of Sums Paid Under Side Letter Agreements and in Restitution / Final Judgment After Trial on Quantum and Liability, Following Preliminary Issues and Strike Out of Defendants' Cross Claims
Outcome
Judgment for the claimants (Braspetro Oil Services Company and Petroleo Brasileiro S.A – Petrobras) against the defendants (FSO Construction Inc., FSO Engineering Inc., FPSO Construction Inc., FPSO Engeneering Inc.) for the admitted and proven sums, with interest. Defendants' cross-claims struck out.
Legal Topics
Enforcement of Side Letter Agreements, Restitution for Unjust Enrichment, Contractual Construction, Strike Out for Procedural Default, Jurisdiction and Forum
Commercial Law Contract Law Restitution Enforcement of Side Letter Agreements Restitution for Unjust Enrichment Contractual Construction Strike Out for Procedural Default Jurisdiction and Forum

Case Brief

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Parties

Braspetro Oil Services Company

Claimant

Petroleo Brasileiro S. A – Petrobras

Claimant

FSO Construction Inc.

Defendant

FSO Engineering Inc.

Defendant

FPSO Construction Inc.

Defendant

FPSO Engeneering Inc.

Defendant

Procedural Posture

Commercial Claim for Recovery of Sums Paid Under Side Letter Agreements and in Restitution / Final Judgment After Trial on Quantum and Liability, Following Preliminary Issues and Strike Out of Defendants' Cross Claims

Legal Issues

  1. 1 Whether FCI is liable to repay Brasoil sums paid to third party suppliers under Side Letter Agreements
  2. 2 Whether Brasoil is entitled to recover further sums in restitution where no Side Letter Agreement or payment exceeds Side Letter Agreement limit
  3. 3 Effect of defendants' procedural defaults and non-participation

Ratio Decidendi

The Side Letter Agreements created a binding obligation on FCI to repay Brasoil for sums paid to third party suppliers upon a conforming written request, subject to the aggregate limit. Where payments were made outside the Side Letter Agreement regime but on behalf of FCI, Brasoil is entitled to restitution. FCI's persistent procedural defaults, failure to provide disclosure, and non-participation justified striking out its cross-claims and entering judgment for Brasoil on the admitted and proven claims.

Court Disposition

Judgment for the claimants (Braspetro Oil Services Company and Petroleo Brasileiro S.A – Petrobras) against the defendants (FSO Construction Inc., FSO Engineering Inc., FPSO Construction Inc., FPSO Engeneering Inc.) for the admitted and proven sums, with interest. Defendants' cross-claims struck out.

Orders

  • Defendants to pay claimants US$ 87,225,217.64 in P38 proceedings, less admitted sums and abandoned claims, plus interest.
  • Defendants to pay claimants US$ 185,714,463.12 in P40 proceedings, less admitted sums and abandoned claims, plus interest.