English Court of Appeal Rules in Favor of Transocean; Positive Implications for Drilling Contractors

English Court of Appeal Rules in Favor of Transocean; Positive Implications for Drilling Contractors

In a significant court decision that is a victory for drilling contractors, the English Court of Appeal last week ruled in favor of Transocean with regard to how drilling contract consequential loss clauses should be interpreted.

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English Court of Appeal Rules in Favor of Transocean; Positive Implications for Drilling Contractors

Houston, Texas (22 April 2016) – In a significant court decision that is a victory for drilling contractors, the English Court of Appeal last week ruled in favor of Transocean with regard to how drilling contract consequential loss clauses should be interpreted.

In 2014, the English Commercial Court ruled against Transocean in a case involving an Irish operating company. The operator in the case alleged that Transocean was responsible for paying the operator’s spread costs associated with unplanned downtime. The ruling had far-reaching implications, as it held that drilling contractors could be responsible for operator spread costs during major contractor downtime events.

In response, Transocean began the process of appealing this specific portion of the ruling. IADC lent its support to a petition to the court on behalf of industry asking the court to grant Transocean an appeal.

“IADC supports its members when it comes to the integrity of drilling contracts. In this case, we worked closely with Transocean to submit documents that supported Transocean’s stance,” said Jason McFarland, IADC President. “The decision of the appeals court last week is a significant win for Transocean and for drilling contractors globally”.

About IADC

Since 1940, the International Association of Drilling Contractors (IADC) has exclusively represented the worldwide oil and gas drilling industry. IADC’s mission is to catalyze improved performance for the drilling industry by enhancing operational integrity and championing better regulation to facilitate safer, cleaner and more efficient drilling operations worldwide. For more information, visit the IADC website at www.iadc.org.