Transocean v Burgundy: Dispute over Escrow Agreement & Arbitration Clause in Drilling Contract
Transocean Offshore International Ventures Ltd sued Burgundy Global Exploration Corp in the High Court of Singapore, claiming damages for breach of an Escrow Agreement. The defendant, Burgundy, sought a stay of proceedings in favor of arbitration, arguing that the dispute fell under the arbitration clause of the related Drilling Contract. Andrew Ang J allowed the plaintiff's appeal, holding that the dispute arose directly from the Escrow Agreement, which contained a non-exclusive jurisdiction clause favoring Singapore courts, and that the arbitration clause in the Drilling Contract did not apply.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Transocean sued Burgundy for breach of an Escrow Agreement. The court held that the dispute fell under the Escrow Agreement's jurisdiction clause, not the Drilling Contract's arbitration clause.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Burgundy Global Exploration Corp | Defendant, Respondent | Corporation | Stay of Action Dismissed | Lost | |
| Transocean Offshore International Ventures Ltd | Plaintiff, Appellant | Corporation | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
4. Facts
- Plaintiff and Defendant entered into a Drilling Contract and a related Escrow Agreement.
- The Escrow Agreement required the Defendant to deposit US$16.5m into an Escrow Account by a specific date.
- Defendant failed to deposit the Escrow Amount as required by the Escrow Agreement.
- Plaintiff terminated the Drilling Contract and accepted the Defendant's repudiation of the Escrow Agreement.
- Plaintiff commenced an action claiming damages for breach of the Escrow Agreement.
- Defendant sought a stay of the action in favor of arbitration based on the Drilling Contract's arbitration clause.
- The Escrow Agreement contained a non-exclusive jurisdiction clause in favor of Singapore courts.
5. Formal Citations
- Transocean Offshore International Ventures Ltd v Burgundy Global Exploration Corp, Suit No 87 of 2009 (Registrar's Appeal No 311 of 2009), [2010] SGHC 31
6. Timeline
| Date | Event |
|---|---|
| Offshore Drilling Contract dated | |
| Amendment No 1 dated | |
| Escrow Agreement backdated to | |
| Deadline for depositing Escrow Amount | |
| Plaintiff terminated Drilling Contract | |
| Writ filed | |
| Amended Writ and Statement of Claim filed | |
| Vessel to be mobilised from Singapore to the drilling site off the Philippines | |
| Decision Date |
7. Legal Issues
- Enforceability of Arbitration Agreement
- Outcome: The court held that the arbitration agreement in the Drilling Contract did not apply to the dispute arising from the Escrow Agreement.
- Category: Substantive
- Sub-Issues:
- Scope of arbitration clause
- Waiver of arbitration agreement
- Inoperability of arbitration agreement
- Interpretation of Contractual Clauses
- Outcome: The court interpreted the jurisdiction clause in the Escrow Agreement as prevailing over the arbitration clause in the Drilling Contract.
- Category: Substantive
- Sub-Issues:
- Construction of jurisdiction clause
- Construction of arbitration clause
- Incorporation of terms
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| S&W Berisford Plc and another v New Hampshire Insurance Co | N/A | Yes | [1990] 2 QB 631 | N/A | Cited for the principle that a party wishing to depart from a non-exclusive jurisdiction clause must show exceptional circumstances amounting to strong cause. |
| Bayerische Landesbank Girozentrale v Kong Kok Keong and another action | N/A | Yes | [2002] 1 SLR(R) 485 | Singapore | Cited for the principle that a party wishing to depart from a non-exclusive jurisdiction clause must show exceptional circumstances amounting to strong cause. |
| Bambang Sutrisno v Bali International Finance Ltd and others | Court of Appeal | Yes | [1999] 2 SLR(R) 632 | Singapore | Cited for the principle that a non-exclusive jurisdiction clause coupled with a waiver of jurisdictional objection is akin to an exclusive jurisdiction clause. |
| The Hung Vuong-2 | N/A | No | [2000] 2 SLR(R) 11 | Singapore | Cited as authority that the court may examine whether there were any real and genuine defenses to the claim in determining whether there was any strong cause for the defendant not to be held to the jurisdictional agreement. |
| Ng Giap Hon v Westcomb Securities Pte Ltd and others | N/A | No | [2009] 3 SLR(R) 518 | Singapore | Cited to support the argument that an implied term is often the last resort of counsel in distress. |
| L & M Concrete Specialists Pte Ltd v United Eng Contractors Pte Ltd | N/A | Yes | [2000] 2 SLR(R) 852 | Singapore | Cited for the principle that arbitration clauses, like exemption clauses, must be expressly brought to the attention of the other contracting party. |
| Coop International Pte Ltd v Ebel SA | N/A | No | [1998] 1 SLR(R) 615 | Singapore | Cited for the principle that an arbitration clause in an original agreement does not extend to a dispute which arose out of the subsequent agreement. |
| Kianta Osakeyhtio v Britain & Overseas Trading Co Ltd | N/A | No | [1954] 1 Lloyd’s Rep 247 | N/A | Cited to support the observation that a compensation agreement was a new agreement and self-contained agreement. |
| Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd | N/A | No | [1999] 1 Lloyd’s Rep 767 | N/A | Cited for the principle that where different agreements are entered into for different aspects of an overall relationship, and those different agreements contain different terms as to jurisdiction, it would seem to be applying too broad and indiscriminate a brush simply to ignore the parties’ careful selection of palette. |
| UBS AG v HSH NordbankAG | N/A | No | [2009] 2 Lloyd’s Rep 272 | N/A | Cited for the principle that where there are numerous jurisdiction agreements which may overlap, the parties must be presumed to be acting commercially, and not to intend that similar claims should be the subject of inconsistent jurisdiction clauses. |
| Tjong Very Sumito and others v Antig Investments Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 732 | Singapore | Cited for the principle that s 6 of the IAA could only be invoked if the party applying to stay the action could show that the instituted proceedings fell within the scope of an arbitration agreement. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Escrow Agreement
- Drilling Contract
- Arbitration Clause
- Jurisdiction Clause
- Escrow Amount
- Commencement Date
- Repudiatory Breach
- Condition Precedent
15.2 Keywords
- Escrow Agreement
- Drilling Contract
- Arbitration
- Jurisdiction
- Breach of Contract
- Singapore High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Arbitration | 90 |
| Breach of Contract | 90 |
| Contract Law | 90 |
| Jurisdiction | 80 |
| Escrow Agreements | 70 |
| Summary Judgement | 50 |
| Commercial Law | 50 |
| Novation | 40 |
16. Subjects
- Contract Law
- Arbitration
- Civil Procedure