Fisher Maritime's Fairleads

'Lessons Learned' Strategies & Ideas for the Marine Industry

$340 Million Award-With Our Help

In two separate but concurrent contracts, a national oil company contracted with a shipyard in the same country to convert a supertanker into an FPSO and to convert a drilling rig into an offshore production platform.  The shipyard experienced significant liquidity problems and consequential delays, primarily due to underbidding, but also due to currency risks and local inflation.

To keep the conversions moving forward, the oil company pumped cash and management resources into the shipyard to ensure the work was completed.  When it became obvious that the budgets would be far exceeded, the shipyard’s surety was advised that the purchaser would look to the surety for repayment of the extra-contractual funds; but the surety refused to take action.  After the completion of the two conversion projects, with over $300 million of extra costs in dispute, the matter went to US federal court because the surety was an American entity.

When Fisher Maritime was engaged, three experts, previously engaged by the attorneys, had already produced their reports.  One was an experienced shipyard manager; the second was a naval architect experienced in the design of offshore production equipment and vessels; while the third was a forensic accountant who identified the extra-contractual costs for the completion of the conversions. While each of the reports answered the important questions that were addressed to the experts; they were not collectively suitable for a court presentation in such a high value case; they need to be integrated for a comprehensive and more pointed presentation in court.

Fisher Maritime was asked to evaluate whether the proposed expert testimony clearly supported all aspects of the oil company’s case to obtain the proceeds of the performance bond issued by the surety.  Fisher Maritime reviewed the work of the three experts, determined how to strengthen the presentations, how to tie together the work of the three other experts to convey the overall picture without giving up salient details, and how to cross examine the surety’s experts to exploit the weaknesses of the other party’s case.

Fisher Maritime met with each of the experts, reviewed their findings and the data and correspondence that led them to their conclusions.  The result was that Fisher Maritime worked to integrate the work of the three experts to provide a readily understood presentation to show that the owner, by working with the shipyard, had proceeded diligently and economically to complete the conversions.  It was established that there was no other, more economic alternative available to the owner than to provide the substantial financial assistance to the shipyard that had been done by the owner.

Fisher Maritime prepared a presentation utilizing and integrating the findings of the previously engaged experts for the attorneys’ opening statement. We also provided extensive lists of questions to be used in the cross examination of the sureties’ expert witnesses. The result was a court award of $340 million in favor of our client.

This was the second time that Fisher Maritime had been central to the successful outcome of a litigated matter valued at over $300 million, in addition to the many lesser matters in which Fisher Maritime has brought success to its clients’ challenges.

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