Petromec Inc v Petroleo Brasileiro SA Petrobras & Ors

The court’s decision in this appeal is embodied in paragraph 42 of the judgment, where it is decided that the appeal should be dismissed with reference to paragraphs (a) and (b) of Cooke J’s order, with a gloss omitting references to Clause 12 (3) and setting aside paragraph (c) of the order for reasons which really do not constitute success by one party or the other in relation to that sub paragraph.

Mr Vineall submits that, in substance, the strongest version of his submission is that, in substance, the result in this court is a resounding success for Petromec. He makes that submission by reference to the formulation of the preliminary issue and to the pleadings and to the terms of the eventual outcome. He submitted before the court before Christmas that there was only one issue and that was one of construction. He submits now that, with reference to paragraph 36 of the court’s judgment, his point of construction has succeeded. In consequence he invites the court to make an order in two paragraphs, embodying what he says the court has decided for the benefit of the future conduct of this case; and he submits in relation to costs that he should have a very favourable costs order because, as he says, his clients have won.

In my judgment that does not properly characterise the outcome of this case. The outcome of this case in substance is that Petromec have failed to resist giving what the court has decided should be proper particulars of their claim with reference to Cooke J’s construction of the agreement.

For practical purposes, although not entirely academically, the court has accepted and confirmed the decisions that Cooke J made and in my judgment the proper approach to the costs in these circumstances is to acknowledge that, in substance, Petrobras are the successful party and Petromec are not.

In those circumstances I would not accede to the invitation to spell out in one or two paragraphs what are said to be certain critical points arising from the court’s judgment. The judgment says what is says. On the contrary, would accept with one modification only the draft of the proposed order which Mr Hancock puts forward. For identification purposes, that is a draft which, in the copy I have, is dated 23 January 2008 and consists of four paragraphs. The first paragraph dismisses the appeal with qualifications as they appear in sub paragraphs (a) and (b). In my judgment the appellants, Petromec, should pay the costs for the appeal. Costs to be subject to detailed assessment if not agreed. And I would order the payment of a sum on account not at £26,800-odd but at £20,000, pending the determination. Accordingly I would make an order in Mr Hancock’s suggested draft form including the fourth paragraph substituting only £20,000 for the £26,000-odd in paragraph 3.

I agree.