Executive Summary
This case concerns a 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) drilling contract offshore Angola. The JV was formed in 2019 between Old Seadrill Ltd and Sonangol, Angola’s state oil company. The Claimants allege they are owed a fee of 4% of contract revenue plus an upfront payment under an unsigned Representation Agreement for services leading to the JV. Seadrill denies liability, citing failure to meet transparency requirements under the US Foreign Corrupt Practices Act (FCPA) and corporate restructuring under Chapter 11 bankruptcy, which created New Seadrill Ltd, a separate legal entity. The High Court judgment addresses contractual, restitutionary, and trustee liability claims.
Sanctions Highlights
— No direct sanctions implications identified in the case text.
— The FCPA is a key compliance consideration, impacting contract execution and payments, but no sanctions regime is invoked.
Emerging Risks
- Risk of contractual disputes arising from unsigned agreements where anti-corruption compliance (FCPA) concerns delay or prevent formalization.
- Corporate restructuring (Chapter 11) can complicate liability attribution and enforcement of claims.
- Transparency and compliance failures may expose parties to reputational and legal risks in international joint ventures, especially involving state-owned enterprises with histories of corruption (Sonangol/Angola).
- Use of intermediaries and “white lies” in negotiations may increase scrutiny under anti-corruption laws.
Geopolitical Impact
- The JV involves Angola’s state oil company Sonangol, highlighting Angola’s strategic role in offshore oil drilling.
- The case references US FCPA compliance, reflecting US extraterritorial legal influence on international business dealings.
- The UK Commercial Court’s involvement underscores London’s role as a key forum for resolving complex international commercial disputes.
- The restructuring under US Chapter 11 law illustrates the interplay between US insolvency law and UK litigation.
- The EU, UK, and US legal frameworks collectively shape the compliance environment for energy sector contracts involving state entities.
Economic Intelligence
- The JV operates offshore drilling rigs “Libongos” and “Quenguela” originally commissioned in 2013 but delayed due to market collapse and debt (~US$1.43 billion).
- The daily operating fee agreed was US$185,000 per rig, indicating significant contract value and revenue flow.
- The Claimants seek 4% of contract revenue plus US$1.5 million upfront, reflecting substantial financial stakes.
- The restructuring of Seadrill under Chapter 11 and creation of New Seadrill Ltd impacts creditor and claimant recoveries.
- The case highlights risks in high-value energy contracts linked to state enterprises with complex ownership and governance.
Strategic Recommendations
- Parties engaging in international joint ventures involving state entities should ensure robust compliance with anti-corruption laws (FCPA) before contract execution to avoid payment disputes.
- Legal counsel should carefully assess the impact of corporate restructurings on contractual liabilities and claims enforcement.
- Transparency and documentation must be prioritized to mitigate risks of unsigned agreements and subsequent litigation.
- Monitor geopolitical and regulatory developments in Angola and US/UK jurisdictions affecting energy sector contracts.
- Consider alternative dispute resolution mechanisms early to manage complex multi-jurisdictional commercial disputes efficiently.
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**Source Notes:** Visalia Marketing Corp & Anor v Seadrill Ltd & Anor [2025] EWHC 1747 (Comm)
https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1747.txt