Petrobras announced today (Jul. 3) it will take “all legal measures available” to challenge the multi-million dollar decision favoring US company Vantage Drilling International in an arbitration involving a drilling contract signed between Vantage Deepwater Company and Vantage Deepwater Drilling Inc., and companies in the Petrobras group.
The ruling was issued Monday (2) in a case administered by the International Center for Dispute Resolution, of the American Arbitration Association. The majority of its arbitration tribunal, formed by three arbitrators, decided that Vantage was to receive $615.62 million in damages for contract breach. It was also found that Vantage is entitled to $6.4 million in connection with the drilling of a well in the Mexican Gulf.
In its note, the Brazilian state-controlled oil giant points out that the dissenting arbitrator refused to sign the final ruling and released his vote in writing objecting the decision. “The pre-hearing, hearing, and post-hearing processes that led to the issuance of the final award have denied Respondents [Petrobras Group companies] in this proceeding the fundamental fairness and due process protections meant to be provided to arbitrating parties,” in observance of the United States Federal Arbitration Act (FAA), Petrobras quoted the arbitrator as saying.
The dissenting arbitrator is also reported as arguing that the decision of the majority may be nullified (vacatur) under the FAA, based on legal fundamentals, like the argument according to which “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made,” the note issued by Petrobras reads.
The company argues that its subsidiary Petrobras America’s decision to terminate the contract was based on “material operational failures” on the part of Vantage, adding that, as revealed as part of Operation Car Wash, the drilling services contract was forged in a corruption scheme and Petrobras was found to have fallen victim of the facts brought to life by the Brazilian authorities, including the Federal Supreme Court.”