MOEX Offshore seeks insurance coverage in BP oil spill

Alejandro de los Rios Mar. 17, 2011, 1:22pm



Seeking declaratory judgment in an insurance claim against Certain Underwriters at Lloyd's of London, MOEX Offshore filed a petition in intervention to assert its rights to coverage in the BP oil spill multidistrict litigation (MDL).

The motion was filed today in the Eastern District Federal Court of Louisiana in New Orleans.

MOEX co-owned the lease with BP on the failed Macondo well that led to the Deepwater Horizon explosion and massive oil spill in the Gulf of Mexico in April 2010. As a result, MOEX is a named defendant thousands of claims in the BP MDL.

"Because MOEX has incurred significant costs associated with the defense of the allegations in these claims, demands and lawsuits, and because billions of dollars are being sought, MOEX demands coverage as provided under Lloyd's Policies," the motion states."

Despite not yet having received a response to its insurance claim on the Macondo well, MOEX expects that Lloyds will deny it coverage, "just as Lloyd's has denied coverage to BP," the motion states.

Transocean, which was obligated to provide liability coverage to BP and all related companies and entities under the drilling contract, bought the Lloyds' coverage, the suit says.

Lloyds had disputed its obligation to insure BP or MOEX in the Southern District Court of Texas before it was transferred to the BP MDL in New Orleans.

"Because the liabilities BP faces for pollution emanating from BP's well are from below the surface and from BP's well, those liabilities are not within the scope of the additional insured protection," Lloyds claimed.

Lloyds argued that BP took full responsibility for the Macondo well in the drilling contract.

MOEX claims, "the plain language of the [drilling contract's] additional insured provision of the Lloyd's Policies contains no such limitation."

Texas attorneys Vincent Morgan and Amy Mohan, and Washington D.C. attorneys Peter Gillon, Geoffrey Greeves and Jampe Bobotek are representing MOEX.

U.S. District Judge Carl Barbier is presiding over the BP MDL.

MOEX asks that Barbier order declaratory judgement as to the "actual and justiciable controversy" that exists between MOEX and Lloyds.

The motion comes at a time as several insurance issues arise in the BP MDL.

In February, BP lawyer Don Haycraft wrote to Barbier concerning BP's insurers.

Haycraft reported to him that, "The plaintiffs, Transocean Excess Insurers and Ranger Insurance Company, are liability insurance carriers that issued policies to Transocean as the named insured with total limits of $750 million."

"The insurers seek a declaration that to the extent that they provide the 'additional insured' coverage to BP, that coverage is limited to the scope of the 'indemnity' that Transocean agreed to provide to BP in the drilling contract," Haycraft wrote.

He wrote that BP filed a counter claim in the Ranger suit, seeking a declaration that the insurers must cover claims without such limitation.

He wrote that BP filed a cross claim in the Ranger suit against Marine Package Insurers.

"In turn, Transocean Marine Package Insurers filed a counter claim for the loss of the Deepwater Horizon hull in the amount of $560 million," Haycraft wrote.

He wrote that BP and leasehold co-owner MOEX Offshore intend to seek an order instructing the insurers not to dissipate their policy limits pending court consideration of these cases.

"BP and MOEX are evaluating other insurance policies, including other excess Transocean policies, in which they may be 'additional insureds' and may seek leave to amend to add that coverage to the insurance litigation," Haycraft wrote.

In the same report, Haycraft wrote that the panel transferred 397 cases to Barbier.

He wrote that as a result of voluntary dismissals, 357 remained active.

He wrote that at least 15 Deepwater Horizon suits were pending in state courts.

He wrote that two rig workers and five response workers alleged personal injuries in state courts.

Richard Godfrey and Andrew Langan, both of Kirkland and Ellis in Chicago, worked on the report, as did Mike Brock of Covington and Burling in Washington.

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