BP is required to indemnify Transocean for compensatory damages related to the Macondo oil spill, but Transocean will still be liable for punitive and civil damages related to the incident, a federal judge ruled Thursday.
U.S. District Court Judge Carl Barbier ruled that BP must indemnify Transocean for compensatory damages related to pollution that did not originate on or above the surface of the water, even if the claim is the result of Transocean's strict liability or negligence.
Transocean had asserted that BP was required to do so under their drilling contract for the Deepwater Horizon rig. BP did not contest it was required to indemnify Transocean for some claims, but disputed the scope of indemnity.
BP's duty to defend does not include the expenses Transocean has incurred or will incur in proving its right to indemnity, and is not obligated to fund Transocean's defense against third party claims at this time, Barbier ruled.
BP responded to the court ruling by issuing its own statement Friday to the London Stock Exchange.
"Under the decision Transocean is, at a minimum, financially responsible for any punitive damages, fines and penalties flowing from its own conduct. As we have said from the beginning, Transocean cannot avoid its responsibility for this accident," BP stated.
"By contrast, since the spill we have stepped up, acknowledged our role and paid more than $7.8 billion in claims, advances and other payments to individuals, businesses and governments."
The ruling comes ahead of the trial scheduled to begin next month into the Macondo oil spill in which claims for the death of 11 workers, numerous claims for personal injury, and various claims for environmental and economic damages, will be heard.
Rigzone Editor Jon Mainwaring contributed to this article from London.
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