Gorgon is one of the world’s largest LNG projects, and the largest single resource project in Australia’s history. Manus McMullan QC was instructed by Owner who faced a claim originally put at approximately AU$ 2bn (including interest) from the contractor responsible for the design and build of the Jetty at the project.
The overall claim was made up of hundreds of smaller claims concerning issues such as marine vessel inspections, quarantine procedures, environmental requirements, caisson design and the effect of winds, waves and cyclones on progress. A modified total cost claim was also made.
After two evidential hearings, both lasting three weeks, Owner obtained a declaration that related proceedings in the US should not have been instigated and an injunction. Owner was successful in defeating more than 95% of the overall claim value. After offsetting amounts awarded to Owner, Contractor recovered AU$ 31.2m, US$ 8.8m and €99k. This was less than 5% of the amount that Contractor had already allowed for the claims in its audited accounts.
It was also found that one third of Contractor’s claims should never have been advanced and were subject to an indemnity from Contractor to Owner.
Related proceedings in the United States have now stopped.
Manus was instructed by Jones Day, and in particular by Stephen O’Neal, Kent Lindsay, David Wallach and Rowan Mason in San Francisco and Katie Mead and Dale Atkinson in Perth. Steve O’Neal and Kent Lindsay now both now practise from King and Spalding.
Arjun Agarwal was in house counsel and was an integral part of the team working on all aspects of the case.