Vantage Deepwater Company and Vantage Deepwater Drilling Inc. v. Petrobras America Inc., Petrobras Venezuela Investments & Services B.V. and Petróleo Brasileiro S.A.

At a glance

Parties

Vantage Deepwater Company (Cayman Islands) and Vantage Deepwater Drilling Inc. (Delaware, USA) v. Petrobras America Inc., Petrobras Venezuela Investments & Services B.V. and Petróleo Brasileiro S.A.

Case no.

Gerechtshof Den Haag No. 200.249.688/01 (ECLI:NL:GHDHA:2019:1845)

Court

Court of Appeal of The Hague (Gerechtshof Den Haag), Civil Law Division

Underlying award(s)

ICDR award of 29 June 2018, Houston, Texas (ICDR Case No. 01-15-0004-8503)

Forum and rules

Request for recognition and enforcement under the New York Convention 1958

Treaty

New York Convention 1958 (Arts. III, IV, V(1)(e), VI)

Judges

F.R. Salomons, C.A. Joustra, R.F. Groos

Sector

Offshore drilling; oil and gas

Outcome

With both sides' agreement, the Court suspended under Article VI its decision on recognition and enforcement while Petrobras's US annulment proceedings were pending.

Amount

Award: USD 615.62 million in damages for early termination, with 15.2% interest compounded monthly from 1 April 2018; USD 6.4 million for unpaid invoices, with interest; USD 32,800.02 in arbitration costs.

The dispute

On 4 February 2009 Petrobras Venezuela Investments & Services B.V. (PVIS) and Vantage Deepwater Company concluded a Drilling Services Agreement (DSA). Under it PVIS was to hire the drillship Titanium Explorer for eight years. Petróleo Brasileiro S.A. guaranteed PVIS's obligations. Petrobras America Inc. and Vantage Deepwater Drilling Inc. became parties through a third novation of 27 October 2014. Petrobras terminated the DSA by letter of 31 August 2015. Vantage then brought an ICDR arbitration in Houston for termination damages and unpaid invoices, and on 29 June 2018 the tribunal ordered Petrobras to pay more than USD 620 million. Vantage asked the Hague Court of Appeal to recognise and enforce the award in the Netherlands, where it had made prejudgment attachments. Petrobras asked the Court to suspend the decision under Article VI of the New York Convention, without security, until its application in the United States to set the award aside was finally decided. In the alternative, Petrobras asked the Court to refuse enforcement or to order Vantage to provide security.

Key holdings

1. The New York Convention applies because both the Netherlands and the United States are parties to it. Under Article III, the Netherlands must recognise and enforce awards made in other contracting States if the Convention's conditions are met. ¶ 2.2
2. Vantage complied with the formal requirements of Article IV(1) and (2). It filed the award and the arbitration agreement, with certified Dutch translations. ¶ 2.3
3. Article VI applies because Petrobras had applied to set the award aside before the competent authority, the US Federal District Court in Houston. That court rejected the application on 17 May 2019. Petrobras appealed, and the appeal was expected to take more than a few months. Since the parties did not want a decision for an indefinite period, the Court suspended its decision on enforcement and on the ancillary requests, including those on attachment, translation and procedural costs. ¶ 2.4
4. The case is treated administratively as closed. Either party may bring it back before the Court for further assessment and decision. ¶¶ 2.4, 3

Procedural history

1. 4 February 2009PVIS and Vantage Deepwater Company conclude the DSA for the Titanium Explorer. Petróleo Brasileiro S.A. signs a guaranty of PVIS's obligations.
2. 31 August 2015Petrobras terminates the DSA.
3. 29 June 2018ICDR tribunal in Houston issues its award in Vantage's favour.
4. 15 November 2018Vantage files its request for recognition and enforcement with the Court of Appeal of The Hague.
5. 14 May 2019Oral hearing before the Court of Appeal.
6. 17 May 2019US Federal District Court in Houston rejects Petrobras's application to set the award aside. Petrobras appeals.
7. 16 July 2019The Court of Appeal suspends its decision on enforcement under Article VI of the New York Convention.

Tribunal, counsel and experts

Decided by

• F.R. Salomons Judge, Gerechtshof Den Haag
• C.A. Joustra Judge, Gerechtshof Den Haag
• R.F. Groos Judge, Gerechtshof Den Haag

For the claimant

T.R.B. de Greve

For the respondent

D. Knottenbelt

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Keywords

• New York Convention
• Article VI
• suspension of enforcement
• recognition and enforcement
• exequatur
• Article V(1)(e)
• set-aside
• Petrobras
• Vantage Drilling
• Titanium Explorer
• drillship
• drilling services agreement
• ICDR
• Houston
• prejudgment attachment
• security
• oil and gas

Summary generated with AI from the published documents — refer to the award for the authoritative text.