VOLUME 1

VOLUME 1

The platform operators (pursuers) exercised comprehensive control over the Piper Alpha platform and its operations, including the work of contractors, and were subject to statutory safety obligations. The contractors' indemnity obligations are to be construed in light of the contracts and the operational context. The sums paid in settlement were based on a reasonable assessment of risk, including the possibility of litigation in Texas and the quantum of damages likely to be awarded there. The indemnities extend to both damages and legal expenses reasonably incurred. The proper procedure is indemnity rather than contribution, given the contractual arrangements and the operators' direct...

Parties
Pursuer: Elf Enterprise Caledonia Ltd; Defender: London Bridge Engineering Ltd; Defender: Northern Industrial & Marine Services Co Ltd; Defender: British Telecommunications PLC; Defender: Wood Group Engineering Contractors Ltd; Defender: Eastman Christensen Ltd; Defender: Kelvin International Services Ltd; Defender: Stena Offshore Ltd
Jurisdiction
Scotland
Procedural Posture
Civil Commercial/contractual Indemnity / Opinion After Proof (trial) in Conjoined Test Cases
Outcome
For the pursuers (Elf Enterprise Caledonia Ltd) in principle, subject to detailed assessment of sums recoverable in each case.
Legal Topics
Indemnity Clauses, Employer Liability, Contract Interpretation, Jurisdiction, Reasonableness of Settlement, Statutory Safety Obligations
Contract Law Oil and Gas Law Tort/delict Health and Safety Law Indemnity Clauses Employer Liability Contract Interpretation Jurisdiction +2 more

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Parties

Elf Enterprise Caledonia Ltd

Pursuer

London Bridge Engineering Ltd

Defender

Northern Industrial & Marine Services Co Ltd

Defender

British Telecommunications PLC

Defender

Wood Group Engineering Contractors Ltd

Defender

Eastman Christensen Ltd

Defender

Kelvin International Services Ltd

Defender

Stena Offshore Ltd

Defender

Procedural Posture

Civil Commercial/contractual Indemnity / Opinion After Proof (trial) in Conjoined Test Cases

Legal Issues

  1. 1 Whether contractors are contractually obliged to indemnify the platform operators for sums paid to victims of the Piper Alpha disaster
  2. 2 Whether the sums paid in settlement were reasonable and within the scope of indemnity
  3. 3 Whether the proper procedure was indemnity or contribution

Ratio Decidendi

The platform operators (pursuers) exercised comprehensive control over the Piper Alpha platform and its operations, including the work of contractors, and were subject to statutory safety obligations. The contractors' indemnity obligations are to be construed in light of the contracts and the operational context. The sums paid in settlement were based on a reasonable assessment of risk, including the possibility of litigation in Texas and the quantum of damages likely to be awarded there. The indemnities extend to both damages and legal expenses reasonably incurred. The proper procedure is indemnity rather than contribution, given the contractual arrangements and the operators' direct...

Court Disposition

For the pursuers (Elf Enterprise Caledonia Ltd) in principle, subject to detailed assessment of sums recoverable in each case.

Orders

  • Defenders are liable to indemnify pursuers for sums paid in settlement and legal expenses, subject to reasonableness and contractual terms.
  • Detailed assessment of quantum to be determined in each individual action.