Providence facing payout to Transocean after court ruling

13th Apr 2016 12:21

(ShareCast News) - Providence was on shaky ground on Wednesday, having lost an appeal brought against it in a long-running legal battle with Transocean.The AIM-traded company said the case relates to certain costs claimed by Transocean against Providence, over the use of the 'Arctic III' semi-submersible drilling unit in 2011 and 2012 on Providence's Barryroe oilfield, offshore Ireland.Transocean lodged the total claim in 2012, amounting to $19m. Providence subsequently counterclaimed against Transocean.The Honourable Mr Justice Popplewell found in his judgement of 19 December 2014 at the Commercial Court in London, that Transocean was in breach of contract for failing to maintain various parts of the equipment, and that it was therefore not entitled to certain amounts of remuneration.After the judgement, Transocean was granted the right to appeal whether Providence was entitled to set off certain spread costs against Transocean's claim.In the judgement handed down on Wednesday, the Court of Appeal granted Transocean's appeal on the set off point. All other aspects of the original judgement remained in force."Providence estimates the financial implications of the Court of Appeal's judgment will result in the payment of approximately US$7 million (excluding interest and costs) to Transocean," its board said in a statement after the appeal was granted.Pending clarification of the final amount payable, Providence requested the continued suspension of its shares from trading.