Petromec Inc v Petroleo Brasileiro SA Petrobras and Ors - Court of Appeal (Brooke, Sedley and Jacob LJJ) - 17 February 2004

Oil production platform sold and chartered for term of 12 years - Purchase price to be paid over 12 years - In event of total loss of platform or on occurrence of other specified events all future payments to become payable from due date subject to discount - Explosion causing platform to become total loss triggering liability to pay all future payments

Societa Armamento Navi Appoggio SpA ("SANA") were the owners of a large semi-submersible production platform. SANA sold the platform to Petro-Deep Inc on terms whereby Petro-Deep were to pay the purchase price over a 12-year period. Petro-Deep in turn concluded a "Bareboat Charter Purchase Agreement" with Braspetro Oil Services Co ("Brasoil"). That contract, whereby title in the platform would pass to Brasoil on payment of all the sums due under the head Bareboat Charter, also had a 12-year term. Brasoil in turn concluded a "Bareboat Sub-Charter" Agreement with Petro Brasileiro SA Petrobras ("Petrobras"), the state oil company of Brazil. The Bareboat Sub-Charter had a similar 12-year term.