Welcome to the March 2015 edition of our Offshore Bulletin.

The tragic incident on board the CIDADE DE SAO MATEUSoff Brazil and the fire on the PETROJARL KNARR are reminders to the industry that there are continuing uncertainties in relation to the legal and regulatory issues concerning offshore units. Fortunately, the incidents are not on the same scale asDEEPWATER HORIZON, in which the Texas Supreme Court has recently delivered its long-awaited ruling on whether BP was entitled to coverage of US$750 million under Transocean’s insurance policies as an additional insured (see our June 2013 andJune 2014 Bulletins). With the assistance of David Sharpe of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, we look at the Court’s reasoning in reaching the conclusion that BP was not so entitled.

We also discuss the English Court of Appeal’s recent decision in the OCEAN VICTORY, which confirms that where parties have taken out joint insurance, it is likely that their insurers will be precluded from exercising rights of subrogation in the event of a breach resulting in an insured loss.

In the run-up to the recently postponed Nigerian elections, analysts have observed that pirate activity typically spikes before national elections, and conjecture that this may be due to some local politicians funding their election campaigns with the proceeds of piracy. In light of this speculation, we examine recent pirate activity in the Gulf of Guinea and discuss the potential implications.

With the assistance of leading barrister Simon Rainey QC, we look at a recent English Commercial Court decision which confirms therestricted scope of risk allocation provisions in rig hire contracts, highlighting that a party will not (in the absence of an express term to the contrary) be able to benefit from its own breach of contract. We also consider another recent decision of the Commercial Court which discusses unreasonable withholding of consent and the meaning of “operating expenditure”.

If you require any further information or assistance on any of the issues raised in this edition, please do not hesitate to contact any of the contributors or your usual contact at HFW.

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Contact

Paul Dean
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Emilie Bokor-Ingram
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