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Transocean lobs legal bomb at BP

Drilling contractor files summary judgment motion to force BP to indemnify it against Deepwater damages

When not drilling for oil, Transocean Ltd. also is effective at boring into its legal adversaries. The Swiss drilling rig owner yesterday filed a motion for summary judgment in the U.S. District Court for the Eastern District of Louisiana looking to put the screws to BP Plc, forcing the petroleum company to honor its contractual obligation and indemnify Transocean against damages as a result of the Deepwater Horizon disaster.

The two companies have been battling in courtrooms over the past year, focusing mainly on whether Transocean should be on the hook for part of the billions in costs and penalties owed to the U.S. government as a result of the spill. A federal investigation fingered both parties as culpable.

While BP has agreed to pay for the cleanup, it’s after Transocean to cover its share, saying the rig owner should bear partial responsibility. Transocean disagrees, noting that BP contractually agreed to indemnify the company.

In its motion, Transocean says BP is attempting to nullify its contract in regard to the Deepwater Horizon drilling rig. “Why have you signed so many contracts, reviewed by an army of your lawyers and businessmen, that you have no intention of honoring,” Transocean wrote in the motion. “The answer is simple: money.”

The contract for the Deepwater Horizon drilling rig contains industry-standard reciprocal indemnity provisions that apportion risk and quantify liabilities between the two companies, Transocean noted in a statement.

“In the contract, which was signed in 1998 and extended several times including in 2009, BP agreed to ‘defend, release, protect, indemnify and hold harmless’ Transocean for any and all fines, penalties and damages associated with environmental pollution originating from the well ‘without limit and without regard to the cause or causes’ including negligence, ‘whether such negligence be sole, joint, active passive or gross,’” Transocean said.

BP spokesman Daren Beaudo countered by saying Transocean breached the contract, according to the Wall Street Journal. “To enforce the indemnification would be to allow Transocean to escape the consequences of its actions and avoid meeting its obligations in the Gulf,” Beaudo said.

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