Petrobras v. Vicinay Cadenas

DLA Piper, CMA – Campos Mello and Norton Rose Fulbright advised on the case

In a per curiam decision issued on June 18, the United States Court of Appeals for the Fifth Circuit reversed a US District Court for the Southern District of Texas order dismissing Petrobras’s claims against Vicinay, and remanded the case to the district court.

The lawsuit, which was filed in 2012 and has been subject to multiple appeals, stems from the failure of a chain manufactured by Vicinay that supported an underwater oil and gas facility in the Gulf of Mexico owned by Petrobras.

Petrobras alleged that Vicinay, contrary to applicable industry standards, had made a series of post-heat-treatment repair welds on the chain, failed to mark the repairs or keep required records, then covered the repairs with coatings that rendered them invisible to the naked eye and to non-destructive testing. According to Petrobras, the presence of the weld repair rendered the chains dangerously susceptible to hydrogen-induced stress cracking, the phenomenon that caused the link to fail.

The district court dismissed Petrobras’s claims, finding that they were barred due to a release provision in its contract with the third-party contractor from which Petrobras purchased the chain. In reversing the district court order and remanding for trial, the Fifth Circuit ruled that Petrobras must be allowed an opportunity to present evidence of Vicinay’s recklessness or “gross fault” which, if proven, would invalidate the contractual clause.

DLA Piper advised Petrobras Americas, Inc. with Robert J. Gruendel (Picture), Stanley McDermott, Brett Ingerman, Ileana M. Blanco, Brett Solberg, Cara Vasquez and Christopher B. Donovan.

In Brazil, CMA – Campos Mello (in cooperation with DLA Piper) advised Petrobras Americas, Inc. with Vinicius Pereira and Beni Flint.

Norton Rose Fulbright advised Vicinay Cadenas, S.A. with C. Mark Baker, Jonathan S. Frankli, Kevin O’Gorman, Denton Nichols and Peter B. Siegal.

Involved fees earner: Beni Flint – Campos Mello Advogados; Vinicius Pereira – Campos Mello Advogados; Ileana Blanco – DLA Piper; Christopher Donovan – DLA Piper; Robert Gruendel – DLA Piper; Brett Ingerman – DLA Piper; Stanley McDermott – DLA Piper; Brett Solberg – DLA Piper; Cara Vasquez – DLA Piper; C. Mark Baker – Norton Rose Fulbright; Jonathan Franklin – Norton Rose Fulbright; Denton Nichols – Norton Rose Fulbright; Kevin O’Gorman – Norton Rose Fulbright; Peter Siegal – Norton Rose Fulbright;

Law Firms: Campos Mello Advogados; DLA Piper; Norton Rose Fulbright;

Clients: Petrobras; Vicinay Cadenas S.A.;

Author: Ambrogio Visconti