Downhole Technology Ltd v. SPS AFOS International (Branch) Ltd [2004] ScotCS 146 (22 June 2004)

Temporary blockage of the well constituted 'impairment' under clause 8.2.1, not 'well loss'; therefore, the defenders are liable to indemnify the pursuers for the recovery costs.

Citation: [2004] ScotCS 146
Parties: Pursuer/appellant: Downhole Technology Limited; Defender/respondent: SPS - AFOS International (Branch) Limited
Jurisdiction: Scotland
Judgment Date: 22 June 2004
Procedural Posture: Appeal / Court of Session, Second Division, Inner House
Outcome: Appeal allowed; interlocutors of the sheriff recalled except as specified; decree granted for pursuers.
Legal Topics: Indemnity Clauses, Interpretation of Contract Terms, Liability Insurance

Contract Law Commercial Law Indemnity Clauses Interpretation of Contract Terms Liability Insurance

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Parties

Downhole Technology Limited

Pursuer/appellant

SPS - AFOS International (Branch) Limited

Defender/respondent

Procedural Posture

Appeal / Court of Session, Second Division, Inner House

Legal Issues

1 Whether the trapping of the wireline patroller in the well constituted 'well loss' or 'impairment' under clause 8.2.1 of the contract
2 Whether the defenders are liable to indemnify the pursuers for costs incurred in recovering the patroller

Ratio Decidendi

Temporary blockage of the well constituted 'impairment' under clause 8.2.1, not 'well loss'; therefore, the defenders are liable to indemnify the pursuers for the recovery costs.

Court Disposition

Appeal allowed; interlocutors of the sheriff recalled except as specified; decree granted for pursuers.

Orders

Decree for £23,709.95 in favour of pursuers
Interest allowed from 10 October 2000