Noreco loses US$470m Siri oil platform claim after 10-year dispute
Noreco has lost its court case against a group of 20 insurance companies regarding a US$470m claim for damage to the Siri oil platform that dates back to 2009.
The Norwegian energy company claimed that its all-risk insurance policy should pay out US$470m for damage to the Danish North Sea-located Siri oil platform in 2009, but the court’s main finding was that the fatigue damage had occurred long before 1 January 2006, so the cost of correcting it could not be covered under any of the policies engaged by the proceedings, whether one applied the 'effect of damage' or the 'cause of damage' principle.
Nigel Chapman, partner at law firm Clyde & Co, which successfully defended the insurance companies, commented: "The case has been ongoing for almost a decade and we hope this latest ruling will bring the dispute to an end.”
Previous ruling overturned
The three Siri area fields were shut down in August 2009 after an inspection revealed cracks in a water buffer tank at the Siri platform.
In proceedings, the Danish Eastern High Court overturned a previous ruling by the Danish Maritime and Commercial High Court, which saw Noreco awarded damages of US$470m, and found in favour of the 20 insurers.
The court also ruled that some limited elements of the early costs were recoverable as sue and labour up to January 2010 and awarded Noreco approximately US$12.5m.
The finding was that costs incurred up to installation of the seabed support were incurred for the purposes of minimising potential further serious loss. But the court also made a cost award of US$4m in favour of the appellants.
Noreco said it believes “that the ruling is on the wrong premises and will make an appeal to the Supreme Court. The work on the preparation of the appeal has already begun.”
By Rebecca Jeffrey
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