Bumi Armada to appeal ruling in case against Woodside

Malaysia’s Bumi Armada has decided to file an appeal against the Supreme Court’s decision relating to the litigation with Australian energy giant Woodside over early termination of Bumi’s Armada Claire FPSO charter.

Armada Claire FPSO; Image: Bumi Armada

Bumi Armada said in a Bursa Malaysia filing on Thursday that it would be appealing the court’s decision in a dispute between its subsidiary Armada Balnaves and Woodside Energy Julimar.

The Supreme Court of Western Australia ruled in favor of Woodside in late January 2020. The trial was held during February and March 2019.

The court decision came after an almost four-year-long dispute over the contract termination. Apache initially signed the contract for the Armada Claire FPSO for work on the Balnaves field in September 2011.

The contract was supposed to last until August 2018 with possible extension options with a value of around $357.5 million.

Woodside bought Apache’s 65 percent interest in the field in April 2015, and the contract was novated to the company in May of the same year. The Australian firm terminated the charter for the FPSO in March 2016.

Bumi deemed the termination unlawful and decided to take legal action against the oil company. On March 11, 2016, Bumi Armada’s subsidiary Armada Balnaves sent a counter-notice of termination to Woodside. Under the counter-notice, Armada Balnaves reserved the right to claim damages for the breach of the contract.

Bumi went further with the dispute by starting a court action against Woodside only days later. The FPSO owner stated in the court case that the damages for breach of contract would be quantified at a later stage and that it also wanted reimbursement for an additional sum of $66.2 million for work done and materials supplied pursuant to the contract, interest, costs, and other relief as the court deemed fit.

In April 2016, the height of the damages was disclosed in a $283.5 million claim which was submitted to the Supreme Court of Western Australia.

According to Bumi, the sum of $275.8 million is the amount of the termination payment to which Armada Balnaves is entitled had the contract been terminated without breach, plus any additional damages for loss of bargain caused to Armada Balnaves as a consequence of Woodside’s repudiation of the contract.

An additional sum of $7.7 million was sought for work done and materials supplied pursuant to the contract. All of the claims by Bumi were dismissed by the court in the January ruling.

Offshore Energy Today Staff

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