London court rules on Providence pay-out to Transocean
The Hon. Justice Popplewell of London’s Commercial Court handed down judgement on the ongoing dispute between Transocean Drilling UK Ltd. and Providence Resources plc after a hearing earlier this month.
DUBLIN, Ireland and LONDON–The Hon. Justice Popplewell of London’s Commercial Court handed down judgement on the ongoing dispute between Transocean Drilling UK Ltd. and Providence Resources plc after a hearing earlier this month.
It was ruled that, as a result of theApril 2016 Court of Appeal decision, Transocean is entitled to about 70% of its costs of the first instance proceedings from Aug. 30, 2014. However, Providence said today, other costs - indemnity basis, interest on costs, and the principal sum and the surcharge of £75,000 ($91,780) - do not apply.
“In coming to this conclusion, the judge found that it would be unjust to apply the full Part 36 [of the English Civil Procedure Rules] costs consequences in the circumstances of this case, including his previous criticisms of Transocean’s conduct which he said ‘was not merely unreasonable but dishonest,’” Providence said via statement.
Transocean claimed in August 2014 unpaid invoices for hire and reimbursables against Providence. Providence counter-claimed for its “spread costs” - mainly equipment and third-party contractor expenses incurred during a period of downtime, alleging that these were caused by the downtime event for which Transocean was responsible.
The Commercial Court originally ruled against the drilling contractor in 2014. Transocean would later go on to successfully contest this dispute and overturn the ruling, as decided in a judgement handed down this April.
Based on this most recent decision, Providence will pay Transocean a gross figure of about £1.10 million ($1.35 million) in respect of all outstanding costs, interest, and principal sums, which compares to the estimated gross figure of $3.90 million described in the company’s interim results.
Lansdowne, the company’s joint venture partner in Barryroe, is liable for its share of all costs associated with the litigation.
Providence holds the operatorship on Barryroe with an 80% working interest. Lansdowne holds the remaining 20%.
Providence CEO Tony O’Reilly said: “This is a very positive result for Providence, with significantly less cost exposure than had been provided for, justifying our defense of our position. With this matter now behind us, our focus remains on unlocking the value within our extensive asset portfolio offshore Ireland, with a particular emphasis on the farm-out processes for Barryroe and Spanish Point as well as completing our preparations for the drilling of Druid next June.”