Executive Summary
This case concerns a contractual dispute between Visalia Marketing Corp and Mr John Kennedy (Claimants) and Seadrill Limited and Seadrill Management AME Ltd (Defendants) over unpaid fees related to a Joint Venture (JV) with Sonangol, Angola’s state oil company. The JV, formed in 2019, involved offshore drilling contracts with rigs contributed by Seadrill and Sonangol. The Claimants assert entitlement to a 4% fee on drilling contract revenues plus an upfront payment under an unsigned Representation Agreement, which they argue was contractually binding. Seadrill denies liability, citing failure to meet transparency requirements linked to anti-corruption compliance (notably the US Foreign Corrupt Practices Act - FCPA) and corporate restructuring under US Chapter 11 bankruptcy, which created a new entity (New Seadrill Ltd) allegedly not liable for Old Seadrill Ltd’s obligations. The court considered witness testimony, contemporaneous correspondence, and expert opinions on FCPA compliance.
Sanctions Highlights
— No direct sanctions implications identified in the case text.
— US FCPA compliance concerns influenced contract negotiations and payment withholding.
— Anti-corruption transparency requirements were a key factor in Seadrill’s refusal to pay the Claimants.
Emerging Risks
- Potential reputational risk for Seadrill due to admitted internal issues with transparency and a “fake message” incident during negotiations.
- Legal risk from unresolved claims related to the Representation Agreement and restitution claims based on unjust enrichment.
- Risk of liability evasion through corporate restructuring under Chapter 11, complicating enforcement of judgments.
- Ongoing scrutiny of JV arrangements involving state-owned enterprises in jurisdictions with corruption histories (Angola/Sonangol).
Geopolitical Impact
- The case highlights the intersection of UK commercial law and US anti-corruption legislation (FCPA), reflecting transatlantic regulatory influence.
- Angola’s state oil company Sonangol’s involvement underscores geopolitical sensitivities in resource-rich African states with histories of corruption.
- The UK court’s handling of a dispute involving US bankruptcy law and international joint ventures illustrates the complexity of cross-jurisdictional commercial litigation.
- The EU, UK, and US regulatory frameworks collectively shape compliance expectations for multinational energy sector operations.
Economic Intelligence
- The JV’s drilling contracts generate substantial daily operating fees (US$185,000 per rig), indicating significant economic stakes.
- The Claimants seek fees amounting to 4% of contract revenues plus a US$1.5 million upfront payment, reflecting sizeable financial claims.
- Seadrill’s Chapter 11 restructuring and creation of New Seadrill Ltd may affect creditor recoveries and contractual obligations.
- The case underscores the financial impact of compliance failures and contractual disputes in the offshore oil and gas sector.
Strategic Recommendations
- Parties engaged in international joint ventures with state entities should ensure rigorous compliance with anti-corruption laws, including transparent documentation and disclosures.
- Legal agreements should be formally executed to avoid disputes over enforceability, especially where significant fees are involved.
- Companies undergoing restructuring should clarify liability assumptions to mitigate risks of claims against successor entities.
- Litigation strategies should leverage contemporaneous correspondence and expert testimony on regulatory compliance to strengthen claims or defenses.
- Stakeholders should monitor geopolitical and regulatory developments in Angola and similar jurisdictions to anticipate emerging compliance risks.
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**Source Notes:** Sanctions Intelligence Digest, [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1747.html](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1747.html)