Petromec Inc v Petroleo Brasileiro SA Petrobras & Anor

Petromec Inc v Petroleo Brasileiro SA Petrobras & Anor

The MOA did not create binding obligations; Petromec was not liable for delay or defective work under the South Marlim or Supervision Agreements; Petromec is entitled to recover reasonable additional costs (excluding profit) under the Supervision Agreement; payments under the first two sets of variation orders are...

Source-derived case information.

Parties
Claimant: Petromec Inc; Defendant: Petroleo Brasileiro S.A. Petrobras; Defendant: Braspetro Oil Services Company (Brasoil); Part 20 Claimant: Petro-Deep Inc; Part 20 Claimant: Maritima Petroleo e Engenharia Ltda
Jurisdiction
England and Wales
Judgment Date
02 February 2004
Procedural Posture
Commercial Dispute / Judgment on Preliminary Issues
Outcome
Judgment for Defendants on preliminary issues; Petromec's claims for additional profit, estoppel, and contractual interest dismissed; Brasoil's claim for recovery of advances allowed.
Legal Topics
Variation Orders, Estoppel, Good Faith Negotiation, Performance Bonds, Indemnity, Interest on Loans
Contract Law Commercial Law Variation Orders Estoppel Good Faith Negotiation Performance Bonds Indemnity Interest on Loans

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Parties

Petromec Inc

Claimant

Petroleo Brasileiro S.A. Petrobras

Defendant

Braspetro Oil Services Company (Brasoil)

Defendant

Petro-Deep Inc

Part 20 Claimant

Maritima Petroleo e Engenharia Ltda

Part 20 Claimant

Procedural Posture

Commercial Dispute / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the Memorandum of Agreement (MOA) created binding obligations
  2. 2 Petromec's liability for delay and defective work under the South Marlim and Supervision Agreements
  3. 3 Entitlement to additional costs and profit under the Supervision Agreement

Ratio Decidendi

The MOA did not create binding obligations; Petromec was not liable for delay or defective work under the South Marlim or Supervision Agreements; Petromec is entitled to recover reasonable additional costs (excluding profit) under the Supervision Agreement; payments under the first two sets of variation orders are final; no estoppel or enforceable duty to negotiate in good faith arose; Petromec has no contractual right to interest at 14.25%; Brasoil is entitled to recover sums advanced under the DPI with interest; Maritima is liable under the Keepwell Agreement; neither Petromec nor Maritima is liable for delay or for failing to provide a performance bond.

Court Disposition

Judgment for Defendants on preliminary issues; Petromec's claims for additional profit, estoppel, and contractual interest dismissed; Brasoil's claim for recovery of advances allowed.

Orders

  • Petromec entitled to recover reasonable additional costs (excluding profit) under clause 12 of the Supervision Agreement
  • Payments under first two sets of variation orders are final